Best Practices In Electronic Discovery

October 2005

Library Sections:

Fulbright & Jaworski's recent annual study of in-house trends named electronic discovery as the number 1 litigation-related burden for companies with revenues greater than $100 million. With email and other electronic evidence becoming more prevalent, along with the war stories of electronic records production gone astray, it is understandable that effective record keeping and record management are of critical importance.

The problem is not electronic evidence. Instead, the problem is the low cost and ease of storage, which have caused businesses to keep a lot more information (and junk) than ever before. One way to keep the cost of electronic discovery reasonable is to do a good job of establishing a process of electronic record retention and to ensure that the policy is actually followed. See Reducing Electronic Discovery Costs … Before the Litigation Starts for more specific advice.

Even if electronic discovery issues have not been addressed before the litigation, most electronic discovery issues can be anticipated. Planning and preparation is key. Proper coordination between legal counsel, client information technology (IT) personnel, and outside electronic experts can ensure that electronic discovery is handled successfully and cost-effectively. The often-cited horror stories and high costs of electronic discovery can be avoided.

Planning for Your Own Electronic Discovery

Ultimately, the similarities between electronic and paper production are just as important as the differences. The following questions should be addressed as part of the electronic discovery production response:

Where are likely relevant documents kept? - As with paper, decentralized storage at both the server and workstation level means that one will need to consider multiple personnel/locations to identify what is needed. Records can be stored on servers, individual user computers, back-up storage, floppy disks, employee home computers, PDAs, and anything else that can store computerized data.
What electronic storage protocols are in effect? - With paper, practical storage limitations cause employees and work groups to get rid of extraneous paper. The efficiency of electronic storage does not automatically enforce such discipline. This means that one needs to know (i) what the formal policy says about back-up and archival schedules, and (ii) what personnel are actually doing. Reliance on formal policies alone will likely be the source of embarrassment when unexpected records show up.
What systems are being used, both now and at the time of the events in question? - More modern systems will likely have greater flexibility in terms of data downloads and customized reports. On the other end of the spectrum, data from since-replaced legacy systems will cause challenges, and will provide more credible arguments that the data is burdensome to retrieve.
What preservation obligations exist? - Court cases continue to emphasize the requirement to retain records once the records become relevant to litigation. Consequently, good faith efforts to preserve known relevant data through a "litigation hold" will go a long way in explaining one's conduct if other data becomes either discarded accidentally or discarded before the data's relevance was identified. The litigation hold can be accomplished by making a special copy of the relevant files before (i) storage media is recycled, and (ii) errant employees discard documents that should be kept.

Databases create unique challenges for litigation holds as these records are intended to change as new transactions occur. Here, you should preserve the evidence trail by making a copy of the database at the beginning of the litigation hold, and at future points where data changes could materially affect the litigation. The majority of cases in which producing parties were treated harshly occurred in circumstances where it appeared to the trier-of-fact that the producing party did not make a diligent effort.
What procedures can be adopted for inadvertent disclosure of privileged items? - Here, the issue is simply one of volume. The manual review of privileged documents is the source of much of the wasted cost in electronic discovery. The majority of privileged documents are usually easily identified by (i) asking those involved, and (ii) through key word searches. Key word searches include specific issues in the dispute, attorney names (including misspellings), and the words "privileged", "attorney", and "lawyer". Nevertheless, some are so concerned about inadvertent production of other records that massive investments of attorney time are incurred to identify those few remaining privileged records in the mass of the entire relevant volume. By far, the less expensive approach is to adopt claw-back agreements that allow protected return of records that obviously are privileged, yet were not initially identified as such.

Getting Electronic Production from Your Opponent

Each of the above items needs to be addressed early. Once planning for your own records is complete (i.e., what goes around, comes around), ask your opponent the same questions that you have just answered for yourself. This means that you should start your case (yes, at the very beginning) with discovery about how your opponent keeps its records. This includes:

Immediately issue a notice to your opponent that you wish electronic data to be retained, and routine circulation of storage media to cease.
Take the deposition of the person most knowledgeable of computerized systems and records - This should include what hardware and software is used, the number of each type of computer (including servers), the general size of data stored for each application, specifics of back-up data maintained, what written policies and procedures exist, and how long data is maintained.
Document production requests for (i) policies and procedures involving all computerized systems and records, and (ii) sample documents showing data fields that are used in the computerized records.

Be persistent. Your opponent will usually resist your production efforts. Lawyers consistently experience this with paper productions, but the resistance with electronic information is often more effective. The reason is that most lawyers are not as comfortable with electronic information, so end up compromising unnecessarily. To avoid this, get educated on the basics of electronic information. Use a small case to explore and learn basic skills so you will be prepared when you must use electronic information on a large case. Using a consultant will also help.

When negotiating about what production is reasonable, The Sedona Principles are often quoted as reflecting "best practices" in electronic discovery. These principles were written by a think tank largely representing the corporate defense bar in complex civil litigation. They provide the rationale for why electronic discovery should be minimized. If your client believes that electronic discovery should be limited, then look to these principles for your rationalization. If you are a party who is being requested to work with less information based on these ideas, recognize their bias and look to more favorable case authority.

Consider the use of an independent expert to overcome your opponent's objections involving privacy and relevance. An independent expert can perform on-site inspections, review the available data, and report on what is relevant based on stipulated or court-ordered criteria. This has the dual advantage of lessening discovery problems/disputes, and getting expert advice in properly obtaining and converting the information in a manner that you will find useful.

Demand that the requested data be kept in its native format or database. This will preserve the power and data contained in the original system. Avoid the unnecessary and wasteful conversion of data to "tiff" or "pdf" formats that can not be as readily searched or sorted.

Sometimes, producing parties will produce large volumes of information. When this happens, computerized information is usually easy to sort and search. The most effective way of reducing a large collection of electronic information is to let the computer do the first pass for you by performing full-text searches using key words, key file users (creators or modifiers), important time-frames, and file types. Filtering in this fashion may not catch every item that you might want, but having subordinates manually review large volumes of paper records will not likely catch everything either.

Summary

In almost any commercial litigation today, the nature of business records practically requires that electronic data collection, production, and review occur. Your clients have moved to computerized information storage and retrieval because it is dramatically more efficient and less expensive. Your litigation efforts can be more efficient and less expensive by using the same tools, rather than attempting to continue to resort to paper print-outs of the same information. In larger cases, this is a non-decision, but smaller cases also benefit from the use of these tools.

Although this stuff may seem scary at first, it is really not that difficult, especially if you have a technical consultant to help with the rough spots. After a short while, we guarantee that you'll find the extra information fun, fascinating, and useful.

Fulcrum Inquiry is a forensic investigations firm that is skilled in computer forensics and electronic discovery. By combining technical capabilities and accounting expertise, we are able to more quickly gather and understand relevant records.

Electronic Discovery Can No Longer Be Ignored
Four Big Myths of Electronic Discovery

New Lawyer Standard for Electronic Discovery

Reducing the Cost of Electronic Storage

California Case Clarifies Cost Shifting in Electronic Discovery Disputes

Computer Forensics Deserve a Place in Your Human Resource Toolkit