Evolving Preservation Standards And Technology Solutions That Work

Wednesday, December 19, 2012 - 13:55

The Editor interviews Mark E. Harrington, General Counsel and Corporate Secretary, and Daniel Lim, Vice President and Deputy General Counsel, Guidance Software.

Editor: Please start our discussion by providing an overview of the issues that you see with respect to over-preservation.

Lim: Organizations like Lawyers for Civil Justice (LCJ) have done a good job of highlighting the burdens of e-discovery within the current legal standards. It’s always a good idea to discuss standards and determine whether they make practical sense. Integral to this discussion are the technical capabilities for preserving electronically stored information (ESI) because these will affect an organization’s overall collection burden.

Starting with the collection issue, it stands to reason that most organizations will either over-collect or under-collect. Over-collection typically affects larger-scale enterprises that have lots of litigation and want to avoid the publicity and other negative aspects of spoliation sanctions. Thus, the longstanding tendency for many legal departments has been a scorched-earth approach to preservation, which means saving everything. And when their colleagues in IT departments step back and question whether counsel understands what that approach really means, the lawyers confirm that, yes, they mean everything.

On the other hand, as many cases this year have reflected, if you’re not over-collecting then chances are you’re under-collecting, particularly if you’re still relying on end users to collect files. People don’t know all the places where relevant information is stored, and even if they do, they don’t know how to collect it or how to turn off the auto-delete systems. Therefore, the self-collection option carries a high risk of under-collection.

As for the over-preservation issue, it is very difficult to establish a systematic, cost-effective and defensible method to search all active data shares for what is potentially relevant. While LCJ’s efforts to adjust the preservation standards may make sense, no matter where the debate ends as to materiality versus relevancy standards, you’re still going to have to figure out how to lock that information down without over-collecting.

Harrington: From my perspective as in-house counsel, it’s critically important to reach a point where you have not only preserved but also collected and produced highly relevant and on-point data. Such efforts by a party can build up huge credibility with a third-party neutral and hopefully can create a cooperative dialogue with your adversary. Over-collection is very inefficient. I want tools that will help me generate a targeted collection based on what I know about the case, and one that enables me to update that collection, if needed, over the course of a case.

Editor: What is the underlying motivation for addressing these issues, and what technical capabilities can help? 

Harrington: Courts are looking for cooperation and greater transparency. They don’t want either party to simply throw out a huge volume of data to the other party without being able to trace why that volume of data is potentially relevant to the matter. Because technology exists today to cull down data into higher relevancy productions, those who purposely decide not to use those technologies may lose credibility with the court. Further, the clear judicial preference is for parties to engage in a dialogue and work cooperatively to create a protocol for a targeted collection. Regardless of where you draw the line on when the obligation to preserve kicks in, the focus really needs to be on that efficiency at all phases of discovery, including preservation, collection, processing and production.

Lim: We are dealing with the fact that plaintiffs’ attorneys are primarily going after large organizations. Their modus operandi is to make discovery requests as broad as they can and then wait for the responding party to make a mistake during the document preservation process. 

A practical suggestion for in-house attorneys involves a process I call pre-collection analytics, which occurs before the actual collection of data. One fundamental issue is that people just don’t know what they have, which forces them to over-collect. Pre-collection technologies can help counsel gain insight into the types of documents that exist on a network or for a particular person. For example, metadata scans are much faster than the collection process, and they provide good metrics for pre-assessing data and then making intelligent proposals on preservation cuts that can be made prior to data collection.

On the review side, many organizations don’t have good insight into what they have already collected and reviewed ten times over that might be relevant to other cases. Good evidence management involves being able to use the work already completed for existing or ongoing litigations. This may amount to 85 percent of the documents needed to resolve a new matter, so the potential benefit is substantial.

Harrington: These early case analytics provide the tools for in-house counsel to comprehend the discovery volumes they’re facing and then extrapolate a potential cost if the matter goes to trial. Being armed with that knowledge allows counsel to manage the case efficiently and really understand the downside risks. It enables better assessment of whether or not to settle the case early on, and it empowers in-house counsel from a negotiation standpoint at the meet and confers.

Certainly, counsel who take a proactive approach to their company’s data will be much better prepared should a conflict or adverse claim arise. One revolutionary development in the last ten years is that now counsel must work in partnership with internal IT departments in order to understand and often manage how company data is created, preserved and purged. Before a claim comes in the door, counsel should be prepared to explain a company’s data management policies to a third-party neutral or an adverse party, if needed, and how such policies impacted the preservation and collection of data in the present matter

Editor: Should the scope of e-discovery be limited to information available in the ordinary course of business?

Lim: Discovery was never meant to cover everything. In general, we need proportionality, where the scope of the discovery is linked to the value of the case. Perfection is not the standard. Instead, organizations must make a good-faith effort to lock down reasonably accessible data, and do it on a targeted basis. They need to show that they’ve done their due diligence and used a systematic and repeatable process, so if something important was missed, it can credibly be attributed to innocent oversight.

LCJ is advocating for a change to an “information available in ordinary course of business” standard, which may narrow the scope of discovery, versus the current “reasonably accessible data” standard. But regardless of any positive effect this may have on the burden to collect data, updating the standard will not alleviate the need to have good capabilities to do this work.

Harrington: In-house counsel must make certain decisions early in the case. Until you can get to a meet and confer stage or agree to a stipulation between the parties on the exact protocol, determining the scope of discovery is a judgment call. This doesn’t mean that you have to preserve the whole universe, but, let’s say we use an employment lawsuit as an example; perhaps counsel preserve information based on individuals named in the complaint, those who store records for those people and departments, their superiors or their subordinates, and date ranges of their employment. The judgment call is to draw reasonable parameters for those early decisions when given very limited information about a case by the party bringing the claim. Again, this is not an exercise in perfection, but you do want to be able to show a good-faith effort to preserve data that reasonably appears to be within range of some of these objectively demonstrated parameters.

Editor: Should the preservation obligation be triggered by the commencement of litigation?

Lim: The perceived advantage with this standard is that commencement of litigation is a date certain. It provides a clear standard and eliminates the debate as to when you reasonably anticipated litigation. Notwithstanding this advantage, it’s still going to be hard to know exactly how and where to start preservation. Regardless of which trigger you use, the key is to coordinate preservation with legal-hold notice procedures. This involves notifying end users and custodians of the litigation hold and then incorporating what you learn about their potential data sources into your preservation process.

Editor: What are some reasonable limits to the preservation obligation?

Lim: LCJ is advocating for a standard of materiality, rather than a broader standard that would include items that simply might lead to material information. At the end of the day, we’re all trying to cut to the chase quicker and focus on the actual claims and defenses. But even if we’re allowed to draw the line at materiality, the debate then turns to questions about what is material versus what is potentially relevant and reasonably accessible. In all events, the need to be able to preserve quickly remains unchanged.

Regarding the practical implications for evidence gathering, the “reasonably accessible” standard focuses on the physical aspects of the data, such as whether it exists on a hard drive or is stored on a back-up tape. Materiality decisions focus on the substance of information and require enhanced visibility into your documents. Thus, the Guidance tools we were discussing earlier, such as pre-collection analytics and metadata scans, can be employed for substantive analysis as to materiality and can ease the overall burdens of preservation. Currently, such materiality determinations of files are made much later in the case, which clearly is not optimal.

Organizations should also keep in mind that other cuts of data can be made at the preservation stage without having to evaluate the substance of the data, such as file types and date ranges. File-type culling at the preservation stage will cut the amount of data preserved from a hard drive by over 90 percent. Date range restrictions also reduce the amount of data preserved substantially.

Harrington: In the old days before a lot of these technologies existed, counsel issued legal holds that preserved boxes of documents or big swaths of electronic data and then set it aside until the discovery phase – such evidence was largely unusable at those early stages without substantial manual efforts. Today’s technology changes that directive by enabling a deeper understanding of the volume and substance of data and focused preservation and collection, which in turn allows for early assessment of potential issues. So whatever standard ultimately is adopted by the courts as to appropriate timing of preservation and collection, it will remain critically important for organizations to be able to meet that standard quickly and accurately.

Editor: Please close our discussion with a broad perspective on evolving issues of concern in the area of information management.

Harrington: We support all efforts, including LCJ’s initiatives, to ask and address the important questions as they relate to e-discovery and data management, and we know that Guidance Software will be able to add value regardless of how the rules come out. As an in-house user, I’ve seen first-hand how our products empower in-house counsel to manage a claim from start to finish, including early case analytics and all the way through cloud-hosted review on the CaseCentral platform. This eliminates the need (and, often, cost) of handing off tasks to IT departments and outside consultants or vendors, and it enables more cost-effective matter management.

Lim: Evolving issues with substantial legal ramifications also include privacy and cybersecurity. Guidance is a digital investigations solutions provider, so there’s a lot that we can offer on the cybersecurity side, including the benefits of data visibility that we’ve been discussing. It’s always been a strong point for us, and many of our major e-discovery clients are using that same investigative infrastructure to do their cybersecurity analysis.

It all ties back to the ability to assess data at an organization’s end-points – i.e., the places where ESI resides, such as on laptops, desktops or servers – in a thorough yet cost-effective manner. If LCJ succeeds in its efforts toward rule changes that will limit the scope of discovery, organizations will still need enhanced technical capabilities to assess data quickly. These early assessment capabilities are the most efficient tools for enterprise content management, particularly because these tools can analyze data where it already exists, i.e., without having to migrate data to a central repository or index everything.

Harrington: Everyone can agree, at least from the in-house perspective, that discovery is a burden that creates heavy costs, and it’s fertile ground for disagreement and conflict in litigation. Tools like ours allow counsel to be more proactive and to manage matters more efficiently, and ultimately, these tools empower in-house counsel to take the lead when they’re facing adverse situations.

Please email the interviewees at mark.harrington@guidancesoftware.com or daniel.lim@guidancesoftware.com with questions about this interview.