Litigation Readiness: How To Take Back Control Of The Discovery Process And Control Litigation Costs

Sunday, June 1, 2008 - 01:00

For in-house attorneys, the costs of discovery rise when Electronically Stored Information (ESI) is uncontrolled. The objective of the litigation readiness process is to make sure that the IT professionals and the legal professionals, who certainly speak different languages, understand the importance of their respective missions, are prepared for the inevitable lawsuits, and respond properly when litigation hits.

Producing discovery has long been an expensive but necessary "cost of doing business" in corporate America. Document retention policies and litigation holds are not new, nor are the challenges inherent in enforcing them. However, until recently records management and document retention related primarily to the handling of tangible, hard-copy documents. Costs were reasonable and quantifiable in most cases. The process was straightforward, if tedious and imprecise.

As the transition from paper to ESI took hold, the costs of litigation rose precipitously and control over potentially relevant information fell at a proportional rate. A recent global survey of senior corporate counsel professionals found that companies with annual sales of $1 billion or more spend an average of $31.5 million on legal issues.1Corporate legal departments are faced with a tremendous challenge. The costs to execute litigation have exploded, and with changes to the Federal Rules of Civil Procedure, and new forms of Electronic Data emerging daily, there is no end in sight.

Concurrently, the mobility of and remote access to ESI has rapidly increased globalization.Most corporations are operating in a multitude of international jurisdictions, many of which have complex and incredibly stringent laws controlling the handling of ESI, particularly with respect to employee privacy.There are myriad pitfalls inherent in collecting, copying or transporting a company's data whether physically or virtually.

The savvy general counsel understands that he or she can no longer rely exclusively on outside law firms to deal with local vendors on an ad hoc basis to collect, analyze, review and produce documents in response to a discovery demand. It is also clearly no longer realistic to wait for litigation to address errant and potentially damaging ESI. It is imperative that corporations make a top-down commitment to a coherent, comprehensive set of document retention policies and procedures that are effectively enforced and predictably maintained.The failure to take such steps could result in:

1. Failure to comply with preservation requirements.

2. Spoliation.

3. Exposure from unintentionally retained documents.

4. Skyrocketing litigation costs.

5. Sanctions for failure to respond effectively to document demands.

There are five fundamental steps to rendering your organization "litigation-ready":

1. Establish a baseline and find your ESI.

2. Establish a nd enforce internal document retention policies and procedures.

3. Identify and codify responsibilities.

4. Monitor and audit all retention policies, particularly litigation holds.

5. Identify and implement technology solutions.

In most companies ESI is logically handled by the IT department, which becomes a defacto records management department. This presents a challenge. From the IT department's perspective their perceived primary objective is to make sure that systems operate properly and that everyone can access any data they may ever need at any time as quickly as possible. Handling ESI for litigation purposes has not been their focus, is not within their expertise, and may well conflict with their internal objectives.

The first step in the process is to unite the Legal and IT professionals to complete a Data Landscape Model (DLM). The DLM will provide the company with a clear, comprehensive overview of:

• Location of all currently existing ESI;

• Current software packages in use;

• Archival policies;

• Current document retention policies;

• Current document retention practices (which often diverge from the policies in place); and

• Existing roles and responsibilities.

Next, the results of the DLM and the company's past responses to litigation should be analyzed to determine what areas must be addressed, where cost savings can be realized, and in what order of priority to best achieve the company's objectives.

This simple and cost-effective process will enable the company's legal and IT professionals to build the processes, policies and most important monitoring and auditing procedures and responsibilities to handle litigation holds and eDiscovery in a cost and time efficient manner.

Alison Silverstein is a Managing Director with UHY Advisors FLVS, Inc. and leads the eDiscovery & Digital Forensics Practice Group based in Washington, D.C. She has developed a practice centered around the principles of sensible, efficient, cost effective, defensible, end-to-end discovery solutions.

Please email the author at asilverstein@uhy-us.com with questions about this article.