e-discovery 2.0

In a time before e-discovery, I toiled away alongside a partner at Chapin, Fleming and Winet – Larry Shea. While not reducing his legal sagacity to one pithy catch phrase, his “no ask-y, no get-y” line is nevertheless a truism I often ponder.⁽ⁱ⁾

As a green associate, fresh out of law school, I had a number of idealistic (read: naïve) assumptions about how litigators wrangled over discovery disputes. One day, while dealing with a particularly thorny electronic discovery problem, I came to Larry and told him what I thought we wanted and why we needed it in a specific format. I knew that the opposition wasn’t likely to grant our e-discovery request, partially because they’d surely intuit how badly we needed it. Larry simply responded with his truism and explained that if we didn’t express our wishes we’d (a) likely not get what we wanted and (b) would not have established our position if push came to shove with the judge.

Well, I just read a recent case (Autotech Techs. Ltd. P’ship v. Automationdirect.com, Inc., 2008 WL 902957 (N.D. Ill. Apr. 2, 2008)) and it showed me that no matter how evolved the legal discovery process has become, the basic “no ask-y, no get-y” notion still applies.

In Autotech, the issue surrounded the production of electronically stored information (ESI) per Fed.R.Civ.P. 34(b)(2)(E) which basically says that court documents must be produced as they are kept in the “usual course of business” or in a “reasonably usable form.” Significantly, section (iii) also states that a party need not produce the same ESI in more than one form.

Unfortunately, the requesting party (ADC) didn’t specify a form for the production of the document at issue, so “Autotech had the option of producing it in the form in which it was ordinarily maintained, or in a reasonably usable form.” Similarly, ADC did not specify that it wanted metadata as a part of the responsive document production. The court was not sympathetic to ADC’s requests: “It seems a little late to ask for metadata after documents responsive to a request have been produced in both paper and electronic format.” The court ultimately found that “ADC was the master of its production requests; it must be satisfied with what it asked for.”

In other words, “no ask-y, no get-y.”

Yes, this all seems so simple, but parties still are routinely stepping in this same pothole. Useful e-discovery best practices to avoid this predicament follow along these lines:

1. Determine what format of ESI production you’re going to require. This sometimes isn’t as easy as it sounds since there are a number of permutations of review environments, even for common platforms such as Concordance [s1]and Summation Work backwards with the attorney review team and their litigation support personnel to figure out what you’ll need and the type of “load files” that are required.
2. Determine if you’ll likely want metadata. In lieu of any specific guidance, it’s fair to assume you’ll want metadata for spreadsheets (to calculate formulas), in cases involving computer forensics and for matters involving granular document authenticity/chain of custody, to name a popular few. The challenge is that you may not know about some of these issues at the time of the early Meet and Confer conferences. This is particularly important since there is a “modest legal presumption in most cases that the producing party need not take special efforts to preserve or produce metadata.” Williams, 230 F.R.D. at 651 (quoting The Sedona Principles, Comment 12a). So, the opposition may be on pretty solid footing if they claim that they had no duty to keep the metadata if you don’t make your needs known early on.
3. Ask for what you want. Here, you’ll want to get specific, especially if you’re wisely carving out certain data types for different handling. Documenting your requests is a good practice too.
4. Prepare to substantiate your needs for #1 & #2. Courts aren’t very willing to entertain overly broad requests for metadata if there isn’t a showing of need. So, be prepared to be challenged and have a solid rationale for the e-discovery request.

⁽ⁱ⁾ His saying, “if ‘its’ and ‘buts’ were candy and nuts it would be Christmas all year long” is another great pearl, but I couldn’t find a good case law tie-in.

Jeff Spicoli, after crashing a car in Fast Times at Ridgemont High, quipped:

“It’s okay. My dad is a TV repairman. He has the ultimate set of tools. I can fix it.”

Clearly, Spicoli’s tools (no matter how “ultimate”) weren’t going to get the car repaired. Never mind the fact that he was probably under the influence and shouldn’t have been operating anything more than a Barcalounger. His quote did get me thinking about a post I read recently that probably would have advised Spicoli against talking about how good his tools were. The post in question trumpeted the value proposition of early case assessments in E-Discovery (a viewpoint I wholly endorse). And yet, during the blog the author posited an interesting viewpoint that I think needs a bit of deconstruction:

“In legal, the less information your opponent has, the better off you are. … Using commodity based early case assessment tools may introduce legal risk your company may not want to manage. For example, if the opposing counsel has foreknowledge of the products you use, such as Autonomy/Aungate, Attenex or Clearwell Systems, they know your capability to identify concepts, custodians, etc. Using software to create legal leverage without sharing to the world how you do it, can improve your competitive advantage in the early phases of litigation.”

As a former practicing litigator, I’ll be the first to admit that I’ve seen my share of scorched earth discovery tactics. And, I’m not so much of a Pollyanna to think that a certain amount of this zero sum mentality doesn’t still exist. And yet, there’s an emerging trend (some might say a nascent best practice) to increase the amount of transparency and collaboration in the E-Discovery world.

I was at the Sedona Conference’s recent “Program on Getting Ahead of the eDiscovery Curve” where one of the hot topics was how the fledgling amendments to the FRCP were playing out in practice. One key discussion area centered around how the new Rules required a much more collaborative meet and confer process:

“Rule 26(f) is about cooperation and working together. By coming together early, defining what is important and what is not, and working with your adversary, not against them, means less risk, less cost and more certainty.” [Emphasis Added]. A Practitioner’s Guide to Rule 26(f) Meet & Confer: A Year After the Amendments. John Rosenthal, Howrey LLP and Moze Cowper, Amgen Inc.

Similarly, recent case law has also championed this collaborative approach:

“Identifying relevant records and working out technical methods for their production is a cooperative undertaking, not part of the adversarial give and take. … It is not appropriate to seek an advantage in the litigation by failing to cooperate in the identification of basic evidence.” In re Seroquel Prods. Liab. Litig., 2007 WL 2412946 (M.D. Fla. Aug. 21, 2007)

As part of this proposed transparency and collaboration, the authors (above) point out that a number of topics should proactively be discussed during the meet and confer session(s) including preservation, date ranges, custodians, systems, categories or types of ESI, and the use of search terms. In my experience this level of discussion and transparency really does pay dividends. Anything that resembles a “hide the ball” approach will ultimately take up needless attorney cycles, and will in turn drive up the cost of resolving the matter.

Now, I will concede that a party shouldn’t take the transparency notion too far. For example, it’s probably not necessary to immediately discuss the brand(s) of tools that are working behind the scenes to deliver the promised results. And yet, disclosing the type of functionality that will be brought to bear on the E-Discovery process can help:

• Facilitate discussions about ESI “inaccessibility” - see FRCP 26(b)(2)(B)
• Dispel the frequent myth that one party has the type of uber tool that can instantly, cheaply and automatically grab every piece of relevant data from the most remote corners of an enterprise
• Set the stage for limitations in the E-Discovery process so that all parties (including the Court) can have their expectations firmly grounded in reality
• Eliminate “black box” technology concerns by showing the opposition how your tools work to process files, handle metadata, etc.

So, back to the Spicoli reference,… having a killer set of tools may help your enterprise (or client) achieve fast, accurate and predictable results. But, does the opponent’s knowledge of the type of tools and features you’re going to use increase your risk profile?

While there aren’t any absolutes, I’d certainly say “no.” And, even if this type of gamesmanship did yield a temporary advantage, it’s probably outweighed by a collaborative E-Discovery approach that is quickly becoming a best practice.

If we could only get the E-Discovery tools to fix Spicoli’s car…

Many readers write in with questions, which we mostly answer offline. But when there’s one of general interest (and the sender consents), we will post both question and response to the blog and invite others to chime in.

I received one such question from Saurabh on Friday:

Subject: Ediscovery: searching/querying incentives

Hi Aaref,

I am regular reader of your blog. My question is what incentives do the defense litigation consultants/counsels have to employ sophisticated search techniques on e-discoverable documents?

Normally plaintiff and defense counsels agree on the search-terms based on which the defendant will produce documents after checking for privilege documents. In this the defendant is supposed to act in good faith with the searches. But in this the defendant has every incentive to use the most rudimentary search capability and still act in good faith.

But on the contrary we see that in the ediscovery domain the demand for sophisticated search techniques is rising everyday.

Regards,
Saurabh

This is a good question as it addresses two common misperceptions: first, that the process by which opposing counsel agree upon keywords is straight-forward; and second, that defense counsel is often well served by doing rudimentary keyword searches, reviewing for privilege, and handing over the results to the plaintiff. Let’s take each of these in turn.

Keywords are typically negotiated at the “meet-and-confer” conference which, under Rule 16(b) of the FRCP, must occur within the first 99 days of the case. In many cases, This is not a collaborative process as some parties will try to skew the list of keywords in its favor. As a result, defense attorneys spend a considerable amount of time preparing for the keyword negotiation by analyzing their clients’ email and documents to formulate their case strategies. The best way of performing this kind of early case analysis is by employing sophisticated e-discovery software.

Whatever keywords are agreed upon, defense counsel is responsible for much more than just performing privilege review prior to handing over the information to plaintiffs. As one GC at a Fortune 100 company told me, “I want to be responsive, but not overly inclusive”. In other words, he wants to hand over whatever he has to, but not one document more. This process of culling data down to precisely the responsive data set is a complex, iterative process. Given today’s massive data volumes, the only way to do it is to employ e-discovery technology to search, filter, cull, tag, review, and export the relevant information.

So to answer Saurabh’s question, defense counsel has a strong incentive to use e-discovery software to perform early case analyses, and cull data down to the specific set of responsive documents. The more adept they are at doing this, the better they can represent their clients or companies. That’s why, as Saurabh observes, demand for e-discovery software is rising everyday.

If there’s one idea that has captivated Silicon Valley in the past 3 years, it is Web 2.0. People may debate its meaning and definition, but the gist of it is clear: a handful of powerful forces have coalesced to make the internet of today fundamentally different to what it was 5 years ago. Opinions vary on which of these forces is most important: the growth of broadband to the home; open source, ajax and other technologies which lower the cost and increase the functionality of web applications; the power of community in a world where more people are on the web. Whichever you choose, there is no doubt that collectively these forces have had a huge impact, powering the growth of now-household names such as Google, MySpace, and YouTube.

I believe that an analogous set of changes is transforming the way companies do e-discovery. Ten years ago, e-discovery was an after-thought – a necessary, but incidental, part of corporate legal expenses. Today, it is a huge line-item in the legal budget, a headache for corporate IT, and the foundation upon which many cases are built.

E-discovery 1.0 was an ad hoc activity; e-discovery 2.0 is a core business process. E-discovery 1.0 was barely noticed; e-discovery 2.0 is driving the news cycle, affecting everyone from Intel to the US Attorney General. In the legal world, e-discovery 2.0 has had every bit as big an impact on enterprises as Web 2.0 has had on the dating lives of teenagers.

What happened? A series of fundamental changes have made e-discovery far more important, expensive, and complex than it was in the 1990s. Chief among these changes are:

1. Email, Not Voicemail: In the past 10 years, companies have switched from voicemail to email as the primary way they communicate. This has created a written record where none previously existed. Just as oral histories eventually die out, every voicemail eventually gets deleted; but emails and the written word live forever. Whatsmore, the convenience and time-efficiency of email makes it addictive, with the result that every meaningful conversation is captured, time-stamped, and attached to a person’s name. Given that many legal cases turn on intent, and proving who knew what when, this makes email a virtual treasure trove for anyone building a case.

2. Electronic Files, Not Paper: Electronic files are fundamentally different to paper documents: they reproduce like rabbits and are far cheaper to store. For example, one laptop is the equivalent of 2,000 boxes of paper; one server corresponds to 8,000-40,000 boxes of paper. The number of servers and laptops holding vast quantities of email is only increasing as the cost of hard disk storage falls, down from $2.04 per GB in 2004 to $0.77 per GB in 2006. Net net: going electronic has vastly increased the amount of data that must be analyzed as part of the discovery process.

3. Sooner, Not Later: Recent changes to the FRCP guidelines have moved e-discovery up in the process, forcing companies to have an e-discovery plan within 99 days of a suit being filed. Since disputes rarely settle that quickly, that means enterprises must now incur the expense of e-discovery on every case, not just the small number that actually make it to court. The result is a massive increase in e-discovery expenses and workload.

Anecdotal evidence of e-discovery 2.0 is everywhere. A few years back, no one would have guessed that every major analyst firm would have people dedicated to tracking e-discovery. Nor would you have expected to find a litigation support manager at every major enterprise.

So what exactly is e-discovery 2.0? Well, I will talk about that in a future post.

As any venture capitalist will tell you, there are two forces which open the window to creating huge, new businesses. The first is a technological breakthrough – think internet, the microprocessor, or mapping the human genome. The second is a change in the regulatory environment, such as airline/telecom deregulation, the new subsidies fueling the boom in clean energy – and the new Federal Rules of Civil Procedure (FRCP), which came into effect on December 1, 2006.

In the legal world, the new FRCP guidelines are a HUGE deal: it is the first time they have changed in 38 years, which is perhaps not surprising since they require approval from Congress and the Supreme Court. As you would expect from our greatest legal minds, the Rules themselves are long, complicated, and (for most people) the perfect antidote to insomnia. But from business’ perspective, the net effect of the changes is pretty simple: there will be a lot more e-discovery.

To understand why, consider the average company with revenues over $1B. According to a recent survey, this “average company” is concurrently managing 556 cases. If you assume that 50% of its cases settle before going to court, then before the FRCP rule changes this company would only have been doing e-discovery on 278 cases.

That all changed on December 1, 2006, when Rules 16 and 26 were amended to provide the court early notice of e-discovery issues. Under Rule 16(b), parties must “meet and confer” at least 21 days before the scheduling conference which, in turn, must occur within 120 days of filing a lawsuit. Rule 16(b) further states that the scheduling order must include “provisions for disclosure or discovery of electronically stored information”, while Rule 26(f) requires that parties “discuss any issues relating to preserving discoverable information and to develop a proposed discovery plan.”

The bottom line: companies can no longer leave e-discovery for later in the process. Thanks to the FRCP rule changes, they must now define and share their e-discovery plans at the “meet and confer” which occurs within the first 99 days of a case. Since cases rarely settle that quickly, our “average company” is now obliged to do e-discovery on all 556 of its concurrent cases, not just the 278 that do not settle. For the corporate legal department, that means their e-discovery workload has doubled overnight, with no increase in manpower to cope with the extra work. So companies are forced to reconsider their e-discovery process and look for ways to leverage technology to cope in a post-FRCP-rule-changes world.

In case you were wondering, I did not figure this out for myself. It was first explained to me by the folks over at the Nassau County Attorney’s Office, and has since been echoed by many of our corporate customers.