As we approach the end of a difficult year in 2009, there is no better time to reflect on the current state of litigation support and eDiscovery and examine the trends emerging for 2010.
Emerging Technologies Causing eDiscovery Nightmares
The rapid growth of electronically stored information showed no letup in 2009, and it promises to accelerate in 2010, as companies grapple with information risk from new sources, such as Web 2.0 tools, cloud computing, unified communication and virtualization. These technologies present unique eDiscovery challenges that will keep in-house legal professionals (and their outside law firms) working at full capacity.
Of particular concern is corporate interest in moving active data to offsite "cloud" storage. This increasingly common practice raises important questions for litigation support professionals. How quickly can data be returned in the event of discovery, subpoena or regulatory request? In what format will data be returned? Is data fully searchable while stored in the "cloud," so that only responsive data is returned? What about disposition of data instead of sending it offsite? At the very least, litigation support professionals will need to have input into service level agreements associated with these types of arrangements, and may even need to test vendors' capabilities with mock regulatory inquiries.
Regulated companies, such as those in financial services, biotech and pharmaceutical, oil and gas, and telecommunications will continue to take a cautious approach to these technologies on account of concerns related to eDiscovery and compliance. In 2009, we began to see corporate legal departments brought in during IT evaluations to assess the impact of new technologies on eDiscovery, compliance and retention. We expect this trend to continue into 2010. In fact, many of our regulated clients have created the role of IT/Legal Liaison to facilitate internal discussion, consensus and cooperation between their companies' IT and legal departments. This IT/Legal Liaison acts as a project manager with specialized knowledge of both legal technology and processes. Corporate budgets for this type of role are also expected to increase in 2010.
Law Firms' Investment In eDiscovery Platforms
2010 will be the year that many law firms move from investigating to standardizing on an eDiscovery platform. The shift will be caused by the drive to provide a cost-effective, competitive, repeatable, and defensible process for eDiscovery to clients.Such a shift has been enabled by the maturation of a few eDiscovery applications that have expanded their functionality to include all phases of the eDiscovery process, from data processing to sophisticated search to full production. The need to integrate components from different vendors will become unnecessary. Law firms that invest in an eDiscovery platform with differentiating technology such as integrated conceptual search, support for non-linear review and email analytics will be able to offer their clients more effective, higher value and lower cost eDiscovery services alongside their traditional legal services. Changes in technology combined with the corporate demand for more cost effective discovery management are changing the dynamics of the market for litigation services.
Law firms will also require eDiscovery platforms to provide quality assurance, process documentation, reporting, security and auditing to support their investment and ensure that their eDiscovery program is repeatable and defensible. Litigation support professionals will be called upon not only to help evaluate and run these systems, but also to take an expanded role in developing ROI models for their clients, fine-tune the best practices around the technology and construct reports to document the process and the results.
Targeted Data Collection and Advanced Search Tools
In 2009, experts began questioning the practice of forensically imaging every hard drive with data that might be responsive to a lawsuit or regulatory inquiry. Companies and their counsel asked why these mountains of full hard drive images were piling up, and what should be done with them. They found that in the majority of cases, only a small percentage of the data was ever responsive. However, the decision to destroy the data was extremely difficult, as they had to cross-reference it with other legal holds to determine whether it required further preservation. It was not an easy exercise, especially for companies without a centralized legal hold system. But when it was complete, most companies found that they were both over-collecting and over-preserving data, which meant that they were over-spending as well.
Next year will see even fewer companies imaging entire hard drives by default. Instead, they will increasingly adopt tools that enable them to identify relevant data down to the individual file before preservation. Traditional keyword search is insufficient for this task, so legal professionals will turn to products with advanced conceptual search technology, which enables far greater precision and recall in search results. In addition, with conceptual search, litigation support specialists can perform searches based on a host of parameters such as date range, email domain, file type and email sender/recipient. The end result of this process is to preserve only the data truly responsive to a particular matter, which also reduces the amount of data that might need to be reviewed downstream.
Litigation Support Professionals Learn Information Management
In an effort to decrease the amount of downstream data within the enterprise, litigation support professionals will also pay close attention to preliminary information-management technologies such as automated categorization. The distinction between records and knowledge management, information access, legal and compliance systems has blurred, as have the roles of the professionals supporting these tools. Based on our clients' desires to better manage their information, we believe that the education of litigation support professionals about information management tools and techniques will gain further momentum in 2010. The closing gap between information management professionals and litigation support professionals was illustrated by the recent Legal Information Technology Conference (LIT-CON), which was jointly sponsored by ARMA International (consisting of the records management community) and ILTA (consisting of the litigation support and legal technology communities). It was quite clear by the end of the conference that both "sides of the house" were anxious to learn what their counterparts were doing and how.
The result in 2010 will be a new breed of professional: a hybrid litigation support and information management resource that can be grouped under the umbrella of Information Risk and Governance. This practitioner will act as a technical expert on eDiscovery platforms, and will also understand litigation support issues such as data review and production and information management technology and processes. The question is which technologies and which vendors will support these professionals in developing effective information risk management programs.
Privilege Review and Rule 502
On the legal front, we saw the enactment of Federal Rule of Evidence, Rule 502 ("Rule 502") in late 2008. Rule 502(b) basically provides that an inadvertent disclosure "in a federal proceeding or to a federal office or agency" is not a waiver if the holder "took reasonable steps to prevent disclosure" and "promptly took reasonable steps to rectify the error." The Advisory Committee explains that the "reasonable steps" requirement is "flexible." In addition to tests for reasonableness set forth in certain prior case law, the committee recognized the practical realities of electronic document review by saying that a party that uses "advanced analytical software applications and linguistic tools" in screening for privilege and work product (e.g., searching for key names and terms) may be found to have taken "reasonable steps" to prevent inadvertent disclosure.
In 2009, we saw various court decisions regarding the application of Rule 502, such as Heriot v. Byrne , (N.D. Ill. 2009) and D'Onofrio v. SFX Sports Group, Inc. , 2009 WL 859293 (D.D.C. Apr. 1, 2009). Although Rule 502 was billed as the tool that would help minimize costs associated with privilege review, most legal counsel have yet to see these benefits in practice. In the recent 2009 Fulbright & Jaworski L.L.P. Litigation Trends Survey of corporate counsel, 89 percent of respondents reported that Federal Rule of Evidence 502 had resulted in no savings for their companies.
In 2010, we can expect to see further judicial decisions regarding the application of Rule 502 and, in particular, what qualifies as taking reasonable steps to prevent disclosure under subsection (b)(2) of Rule 502. Undoubtedly, eDiscovery technology vendors will begin building tools to automate the heavy manual process of privilege review and will work with their clients to develop processes and workflows around these tools. We ourselves have done so. eDiscovery products that can assist law firms with automatic recognition and categorization of likely privileged communications will be in high demand.
Proportionality and Cooperation
Another trend we saw in 2009 was the maturation of the Cooperation Proclamation, which grew out of the work of the Sedona Conference® , a nonprofit research and educational institute comprised of judges, attorneys and other experts who meet, discuss and publish on issues related to eDiscovery. In 2009, federal judges began referring with increasing regularity to the eDiscovery guidelines set forth in various publications of The Sedona Conference, including The Cooperation Proclamation. With the Cooperation Proclamation, the Sedona Conference launched a national drive to promote open and forthright information sharing, dialogue (internal and external), training and the development of practical tools to facilitate cooperative, collaborative, transparent discovery. Signatories to the Cooperation Proclamation agreed that the legal profession should engage in a comprehensive effort to promote pre-trial discovery cooperation. Among its many edicts, The Cooperation Proclamation also suggests that discovery disputes be handled by those best situated to understand the underlying issues, such as experts, volunteer mediators or formal alternative dispute resolution programs.
In some ways, 2009 will be seen as the turning point between adoption and implementation of these guidelines. In 2010 we will begin to see how and whether counsel will take heed. Given judicial support for the guidelines and the courts' increasing frustration with parties who plead ignorance about eDiscovery, the proclamation is likely to meet with success - the question is in what form and to what extent. Will we see adversaries participate in more informed and in-depth "meet and confer" conferences related to eDiscovery? Will we see them sharing the costs of eDiscovery processing, review and production? Answers to these questions and more will begin to arrive in 2010.
In 2010 the paradigms that guided eDiscovery and litigation support over the past five years will begin to shift in important and exciting ways. Companies will seek to lower costs while maintaining adequate risk management. Law firms will include eDiscovery in their portfolio of full-service litigation and regulatory legal support which now includes eDiscovery. To meet these goals, we will see end-to-end eDiscovery systems adopted by law firms and corporations and staffed by a new breed of practitioner with expertise in both technology and the law
Bob Tennant is the Chief Executive Officer at Recommind, a position he has held since late 2001. Mr. Tennant led Recommind to its market-leading position in legal knowledge management and subsequently to its leading market position in advanced e-discovery and information risk management technology. Prior to joining Recommind he served as the managing director of Swiftsure Capital and in senior positions in the Java Software division of Sun Microsystems, where he led the marketing of the Java platform into consumer electronics. Mr. Tennant came to Sun through the acquisition of Beduin Communications. Mr. Tennant was a co-founder of Beduin and served as CEO and President until its acquisition. Mr. Tennant is a board member of several successful young companies and a graduate of the University of Victoria, the University of California at Berkeley, and Columbia University, from which he has an MBA.