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e-Discovery Planning

by Faulkner Staff

Copyright 2020, Faulkner Information Services. All
Rights Reserved.

Preview

Electronic discovery (e-discovery) is the process of finding information
stored in electronic files, databases, or archives. While the roots
of e-discovery can be traced back to the early 1990s when enterprises
began mining large-scale databases to gain market intelligence,
e-discovery today generally involves the on-demand production of
information that is relevant to specific legal orders and regulatory
requirements. To prevent running afoul of the legal system, enterprise
planners – led by the enterprise general counsel – should establish a
robust and reliable plan for producing electronic enterprise information
on demand.

Report Contents:

• Executive Summary
• Description
• Current View
• Outlook
• Recommendations
• Web Links
• Related Reports

Executive Summary

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In the United States, the concept of electronic discovery (e-discovery)
was codified in 2006 when the Supreme Court approved and forwarded to
Congress a number of revisions to the Federal Rules of Civil Procedure
that addressed the preservation and discovery of data in electronic media.

The new rules established a new form of discoverable data called
“electronically stored information” (ESI). According to Rule 34, ESI
includes writings, drawings, graphs, charts, photographs, sound
recordings, images, and other data or data compilations stored in any
medium from which information can be obtained. Importantly,
electronically stored information stands on equal footing with the
discovery of paper documents, meaning it must be produced on demand in
response to a subpoena or other court order. While the Federal Rules of
Civil Procedure apply to federal courts, most state court systems have
adopted the same or similar rules. As a consequence, enterprises must be
prepared to produce relevant electronic information as required and
requested by legally authorized entities.

Many legal disputes involve e-discovery requests, as might be expected
because so much enterprise information resides in some form of electronic
repository. Any enterprise that is ill-prepared to produce relevant ESI in
response to a court order may face significant monetary and other
penalties. Furthermore, it is important for organizations to keep up to
date about legal requirements for meeting such requests, which can change
as technology changes. For example, in a 2016 ruling, a judge determined
that a party in a case couldn’t be compelled to use the increasingly
popular “predictive coding” technology to perform discovery.¹
The judge’s ruling saw the value in predictive coding as a technique but
argued that the court didn’t have the power to require its use.²

Description

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The Importance of e-Discovery Planning

If an organization enters a legal proceeding, the failure to meet
electronic discovery (e-discovery) guidelines could severely damage its
case. An example of this occurred in November 2015 when a court barred the
prosecution from using text messages in a criminal case because it had
mishandled some messages.³

In many respects, e-discovery planning is indistinguishable from
information management planning. Each discipline revolves around three
fundamental responsibilities:

1. Finding (or discovering) information – Identifying
   and locating those data elements that enable enterprise operations.
2. Classifying information – Associating with each
   element the function to which it primarily pertains, such as customer
   data, sales data, etc.
3. Securing information – Ensuring the integrity and, as
   appropriate, the confidentiality of each element.

What separates e-discovery from information management is the following:

1. Information management planning is optional; e-discovery planning is
   not.
2. E-discovery planning involves the responsibility of presenting
   information, providing for the rapid production of specific information
   elements pursuant to – and in accordance with – a duly authorized
   subpoena or other legal order.

Litigation Hold

Integral to the planning process, an e-discovery request is usually
preceded by a “litigation hold.” As analyst Ken McBride explains, “Once
[an enterprise] reasonably anticipates litigation, it must suspend any
routine document destruction policy and put in place a litigation hold to
ensure the preservation of relevant documents. This obligation is always
triggered when [an enterprise] receives a demand letter or notice from an
opposing party or attorney, and may be triggered before receipt of a
demand letter if the [enterprise] should know litigation is possible.”⁴

Complying with the provisions of a litigation hold is crucial since the
party subject to the hold is receiving fair warning that information of a
certain type will have to be produced. Any inability to subsequently
produce such information will be considered suspicious, and any innocent
explanations of such failures may be rejected. Consequently, McBride
insists that “Counsel must oversee ongoing compliance with the litigation
hold, monitoring the party’s efforts to retain and produce the relevant
documents.”⁵

E-Discovery Technology

Technology is essential to developing an effective e-discovery program:

1. The ability to store information electronically has led to an
   explosion in enterprise information; there is so much information that
   manual discovery processes are easily overwhelmed.
2. E-discovery is more reliable for certain kinds of simple searches
   because discovery conducted by humans is prone to human error.
3. Perhaps most importantly, e-discovery is cheaper than manual methods.

With respect to its economic impact, a New York Times article
describes, at least anecdotally, the cost differential between
traditional, i.e., human-performed, discovery and e-discovery. As reported
by John Markoff, “When five television studios became entangled in a
Justice Department antitrust lawsuit against CBS, the cost was immense.
The studios examined six million documents at a cost of more than $2.2
million, much of it to pay for a platoon of lawyers and paralegals who
worked for months at high hourly rates…. But that was in 1978. Now,
thanks to advances in artificial intelligence, e-discovery software can
analyze documents in a fraction of the time for a fraction of the cost. In
January [2011], for example, Blackstone Discovery of Palo Alto,
California, helped analyze 1.5 million documents for less than $100,000.”⁶

There are a great many tools available to help with electronic discovery.
For example, one directory lists more than 200 providers of technology.⁷
Some popular e-discovery applications are:

• IBM eDiscovery Manager
• Veritas eDiscovery Platform
• Xerox OmniX

Typical e-discovery products have features such as the following:

• Comprehensive Search – Enables the scanning of all
  repositories, content stores, languages, and formats (including audio
  and video).
• Compliance Assistance – Supports all legal hold
  identification, notification, preservation, and collection processes.
• Evidence Preservation – Helps to preserve evidence
  and to track custody.
• Content Management – Manages a diverse range of
  electronic content.

Increasingly, the tools in the field are being updated to work in the
cloud. A cloud-based tool offers significant potential advantages in the
legal field. “[M]ost law firms do not have a Chief Information Security
Officer (CISO) and team to assist in protecting the data being stored and
accessed by these e-discovery solutions. By contrast, in the cloud,
security and management are in the hands of trained, dedicated experts,”
says e-discovery specialist Daniel Garrie.⁸ The
development of cloud-based e-discovery is still underway, however, and the
use of it has not yet been fully embraced across the industry.⁹

The market for eDiscovery services was valued at $6.0 million USD in 2016,
and is expected to climb to $13.0 million USD by 2023. This growth is
attributed to a rise in the number of litigation cases, increased use of
mobile devices, the pressure to lower the costs of legal departments, and
requirements to adhere to rules and regulations. The demand for cloud rather
than on-premises deployments is increasing, as well, as it offers the
benefits of security, cost savings, scalability, and cross-border
functionality.¹⁰

Electronic Discovery Reference Model

For many enterprises, the Electronic Discovery Reference Model (EDRM)
helps to guide the e-discovery process. The EDRM was created in 2005 to
address the lack of standards and guidelines in the e-discovery
market. The completed reference model – which in 2016 was acquired by Duke
University Law School, which now maintains the standard¹¹ –
provides a common, flexible, and extensible framework for the development,
selection, evaluation, and use of e-discovery products and services. A
depiction is provided in Figure 1.

Figure 1. Electronic Discovery Reference Model

As illustrated in Figure 1, the EDRM features nine stages, each of which
is designed to facilitate the e-discovery process:

1. “Information Governance – Getting your electronic
   house in order to mitigate risk and expenses should e-discovery become
   an issue, from initial creation of electronically stored information
   (ESI) through its final disposition.
2. “Identification – Locating potential sources of ESI
   and determining its scope, breadth and depth.
3. “Preservation – Ensuring that ESI is protected
   against inappropriate alteration or destruction.
4. “Collection – Gathering ESI for further use in the
   e-discovery process (processing, review, etc.).
5. “Processing – Reducing the volume of ESI and
   converting it, if necessary, to forms more suitable for review and
   analysis.
6. “Review – Evaluating ESI for relevance and
   privilege.
7. “Analysis – Evaluating ESI for content and context,
   including key patterns, topics, people and discussion.
8. “Production – Delivering ESI to others in
   appropriate forms and using appropriate delivery mechanisms.
9. “Presentation – Displaying ESI before audiences (at
   depositions, hearings, trials, etc.), especially in native and
   near-native forms, to elicit further information, validate existing
   facts or positions, or persuade an audience.”¹²

Current View

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The practice of e-discovery has changed dramatically as new ways to store
information have become popular. Describing this change, legal scholar
Philip Favro says that today’s discovery is different from “the previous
decade when documents were almost exclusively maintained on file servers,
laptops or other local hardware sources.”¹³ He describes today’s
technology as being “truly e-discovery, with discoverable information found
in clouds, mobile devices and other digital locations.” And a relatively new
technology, predictive coding (also called “Technology Assisted Document
Review”), can automatically identify documents based on criteria that is
more advanced than simple keywords.

The development of social media, mobile devices, cloud computing, and
other new forms of data sharing has widened the scope of discovery,
creating challenges for organizations that need to find information. These
new information sharing technologies can be especially problematic because
employees often use them without the IT department’s oversight or even
knowledge. For instance, employees might use personally owned smartphones
to send text messages to business partners or they might store company
data on a commercial cloud service such as Dropbox.

The legal issues surrounding these new information sharing methods are
still being worked out. (For example, on December 1, 2015, key technical
changes to e-discovery laws implemented by the federal government went
into effect.¹⁴) But these new methods are definitively within
the scope of discovery. “Courts across the United States have now
made clear that discovery of social media is fair game,” says an analysis
in SociallyAware, a publication focused on legal issues involving social
media.¹⁵ But apart from the fact that social media is clearly a
target for discovery, other issues remain under debate. The analysis in
SociallyAware also says that “courts have consistently found that
litigants will not be permitted to engage in social media fishing
expeditions; rather, litigants will be required to show that the sites
likely contain relevant material.” The distinctions made between what can
be discovered and what cannot are often nuanced and highly technical. For
instance, delving more deeply, SociallyAware says that “at least one court
has criticized the approach of looking to the public social media for
indications of relevancy of the private portions of the site. In Giachetto
v. Patchogue Medford Union Free School District, the U.S. District Court
for the Eastern District of New York observed that ‘[t]his approach can
lead to results that are both too broad and too narrow’ and went on to
analyze category-by-category what the defendant had demanded to determine
the scope of the relevant social media information in what the court
called a ‘traditional relevance analysis.'”

Outlook

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It is predicted that e-discovery planners will be looking to keep more of
their practices in-house. Also, it is expected that there will be more
crossover between the legal and technical roles of the e-discovery
professional. These professionals will increasingly be developing a common
vocabulary for effective communication.¹⁶ During 2020, it is
predicted that e-discovery will increasingly be a built-in capability
among providers such as Microsoft, Google, and Dropbox. In addition,
growth in the market via acquisition will remain strong, especially
between competitors. It is also expected that there will be an increasing
emphasis on validation and authentication.¹⁷

The two greatest challenges for e-discovery planners will continue to be
volume and location:

• Controlling the rapid proliferation of enterprise data.
• Keeping track of where enterprise data is stored, whether in a
  conventional data center, on a laptop, or on a USB drive, for example.

In concert with these challenges, e-discovery planners must consider the
following issues when crafting their e-discovery program.

Data Minimalization

Company executives often worry about e-discovery because the process:

• Is normally performed in response to a legal or regulatory order.
• Produces uncertain results (it is hard to ensure that all information
  within the scope of a specific discovery order has, in fact, been
  discovered).
• Does not add to the bottom line.

One way to limit an enterprise’s e-discovery exposure is to limit the
amount of discoverable data by establishing – and strictly enforcing –
data retention policies.

Full-Service Solutions

Owing to advances in mobile and other technologies, today’s enterprises
are suffering from a phenomenon known as “data spillage.” In many
instances, enterprise data – potentially discoverable data – is spilling
or leaking from the enterprise data center to

• An increasingly large variety of mobile devices (laptops, smartphones,
  tablets, flash drives, etc.).
• Social networking sites like Facebook and Twitter.
• The cloud.

In selecting an e-discovery solution, planners should choose a technology
capable of discovering data wherever it resides. Cloud-based discovery
services are emerging, and organizations would be prudent to consider
whether this approach would be better for their needs than a traditional
enterprise application. In addition, since many enterprises conduct
business on a global basis, they may be subject to discovery orders from
multiple jurisdictions. It is therefore helpful to seek a technology
capable of discovering data in accordance with all local rules and
discovery practices, both nationally and internationally.

Recommendations

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E-discovery issues can reach the highest levels of an organization, even
dragging chief executives into court to explain their processes for
handling information. “Chief information officers ill-informed about
collecting and preserving electronic evidence during lawsuits could hamper
defense of their company and leave it open to heavy fines and court
sanctions,” write Kim S. Nash and Steven Norton in The Wall Street
Journal.¹⁸ They also point out that CIOs can even be
personally sued, as was the case when the CIO of Volkswagen Group of
America named in a suit.

Adhering to the following core guidance will help organizations to plan
an e-discovery initiative:

1. Make e-discovery a team effort. Engage records professionals, business
unit leaders, information technologists, and the general counsel’s office
to create the most comprehensive plan.¹⁹

2. Don’t delay. Have a plan in place before receiving an e-discovery
request.²⁰

3. Establish a litigation hold process to ensure that potentially
discoverable records are retained and protected from tampering.²¹
If a hold is in place, have someone from the general counsel’s office
monitor compliance.

4. Foster a responsible, professional culture that appropriately uses all
electronic messaging for its intended business purpose and manages
electronic messages according to organizational policy.²²

5. Conduct e-discovery awareness training sessions for all employees.
Stress the importance of complying with e-discovery requests and the
consequences of non-compliance.

6. Stay abreast of new developments in e-discovery technology and
incorporate new solutions as appropriate.

7. When selecting an e-discovery solution, ensure that the underlying
technology:

References

• ¹ “A Responding Party Cannot Be Forced to Use Technology
  Assisted Review (Predictive Coding).” K&L Gates. August
  1, 2016.
• ² Ibid.
• ³ “In Criminal Case, Failure to Preserve Results in
  Exclusion of All Text Messages, Possible Adverse Inference.” Electronic
  Discovery Law. November 10, 2015.
• ⁴ Kevin McBride. “A Client’s Guide to Electronic Discovery
  Planning.” Electronic Discovery. January 6, 2010.
• ⁵ Ibid.
• ⁶ John Markoff. “Armies of Expensive Lawyers, Replaced
  by Cheaper Software.” The New York Times. March 4, 2011.
• ⁷ “Providers.” Complex Discovery.
• ⁸ Daniel Garrie. “2016 – The Year of Cloud-Based
  E-Discovery?.” Bloomberg BNA. January 4, 2016.
• ⁹ Ibid.
• ¹⁰ “Global eDiscovery Market Analysis and Forecasts
  2016-2023: Market was Valued at $6 Billion in 2016 and Expected to Reach
  $13 Billion by 2023.” Cision PR Newswire. December 13, 2017.
• ¹¹ Robert Ambrogi. “Duke Law Acquires Electronic Discovery
  Reference Model.” Law Sites Blog. August 24, 2016.
• ¹² EDRM (edrm.net).
• ¹³ Phil Favro. “The Critical Role CIOs Play in
  E-discovery.” FCW. September 8, 2014.
• ¹⁴ Charles Skamser. “Changes to the Federal Rules of Civil
  Procedure (FRCP).” eDiscovery Times. November 30, 2015.
• ¹⁵ Reema Abdelhamid and J. Alexander Lawrence. “U.S.
  Courts’ Evolving Approaches to Social Media E-discovery.” SociallyAware.
  March 31, 2014.
• ¹⁶ “The Future Is Now: Predictions for Corporate Ediscovery in 2019.” JD Supra. January 2, 2019.
• ¹⁷ Zach Warren. “Legal Tech’s Predictions for
  E-Discovery in 2020.” Law.com. December 30, 2019.
• ¹⁸ Kim S. Nash and Steven Norton. “Electronic Discovery Can
  Bring CIOs to Court.” The Wall Street Journal. March 25, 2016.
• ¹⁹ “What Is Electronic Discovery?” ARMA
  International. 2012.
• ²⁰ Ibid.
• ²¹ Ibid.
• ²² Ibid.
• ²³ Ibid.

Web Links

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• EDRM: http://www.edrm.net/
• HP: http://www.hp.com/
• IBM: http://www.ibm.com/
• Veritas https://www.veritas.com/
• Xerox: http://www.xerox.com/

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