Brian Dirking

1
Preparing for Electronic Discovery

• Brian Dirking
• Principal Product Director
• February 21, 2008

2
Agenda

• Status of Electronic Records Management
• How to Find Requested Content
• How to Better Prepare for Litigation
• Protecting Content In Circulation
• Why Your IT Organization Should Care
• Closing Remarks

3
Status of Electronic Records Management
4
Situation TodayContent Growth

• Companies are generating tremendous amounts of
  content
• And those growth rates are themselves growing
• Email
• Instant Messaging
• Microsoft Office (Word, Excel, PowerPoint, etc.)
• Web Content
• Reports
• Collaborative content
• Most of the content is (at best) redundant, and
  (more likely) outdated or counterproductive

5
Situation TodayElectronic Records Policies

• Retain everything

Retain nothing
6
Situation TodayContent Volume Issues

• Issues for Users
• Workers spend large amounts of time searching for
  content
• Outdated or uncontrolled content can lead to poor
  decisions
• Issues for IT
• Large amounts of money are spent finding and
  implementing technologies to cope
• Search
• Storage
• Enterprise Content Management
• Archiving / Backup
• Labor is spent managing and implementing these
  technologies, and handling requests for content
• IT is often designing content retention policies,
  and shouldnt be

7
Situation TodayContent Volume Issues (cont.)

• Issues for Legal
• Discovery is extremely costly
• The cost of discovery is (roughly) proportional
  to the volume of content
• From a discovery perspective, it is risky to keep
  information that should be eliminated

8
Situation TodayDiscovery

• Almost everything electronic is discoverable
• Today it is black letter law that computerized
  data is discoverable if relevant."
  Anti-Monopoly, Inc. v. Hasbro, Inc., No.
  94CIV2120, 1995 U.S. Dist. LEXIS 16355 (S.D.N.Y.
  1995)

9
Situation TodayDiscovery

• Almost everything electronic is discoverable
• Discovery difficulty is not a valid excuse
• Deficiencies in the retrieval system cannot be
  sufficient to defeat a good faith request to
  examine relevant information. If a party
  chooses an electronic storage method, the
  necessity for a retrieval program or method is an
  ordinary and foreseeable risk.Kaufman v.
  Kinkos Inc., 2002 WL 32123851 (Del. Ch. 2002)

10
Situation TodayDiscovery

• Almost everything electronic is discoverable
• Discovery difficulty is not a valid excuse
• Discovery cost is generally not a valid excuse
• Plaintiff sought 800 backup tapes from Toshiba
  claimed cost of processing tape (analyzing data,
  identifying and restoring files, searching,
  producing specified data) would have been 1.5 to
  1.9 million. Toshiba asked plaintiff to split or
  cover the cost. Trial court ordered Toshiba to
  produce at their own expense.Toshiba v. Superior
  Court of Santa Clara County, 124 Cal. App. 4th 72
  (Cal App. 2004).

11
Situation TodayDiscovery

• Almost everything electronic is discoverable
• Discovery difficulty is not a valid excuse
• Discovery cost is generally not a valid excuse
• Spoliation can be extremelyeven fatallycostly
• Adverse inference instruction contributed to
  1.45 billion judgment against Morgan Stanley.
  Finding Morgan Stanley grossly negligent in
  failing to produce Emails, overwriting Emails
  after twelve months in violation of an SEC order,
  failing to conduct proper searches for back-up
  tapes that may have contained Emails, and failing
  to notify plaintiff or the Court when it
  discovered new Emails. Coleman Holdings v.
  Morgan Stanley Co., No. CA 003-5045AI, 2005 WL
  674885, at 9-10 (Fla. Cir. Ct. March 23, 2005).

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Content Retention Principles

• Dont retain more content than is necessary
• There is nothing wrong with a policy of
  destroying documents after the point is reached
  at which there is no good business reason to
  retain them.Arthur Andersen, LLP v. United
  States, 125 S. Ct. 2129, 213135 (2005) Fidelity
  Nat. Title Ins. Co. of New York v. Intercompany
  Nat. Title Ins. Co., 412 F.3d 747, 750 (7th Cir.
  2005)

13
Content Retention Principles

• Dont retain more content than is necessary
• Apply policies consistently and universally
• Destruction of data pursuant to valid document
  retention policy did not warrant spoliation
  sanctionsHynix Semiconductor, Inc. v. Rambus,
  Inc., No. C-00-20905 RMW (N.D. Cal. Jan. 4,
  2006).

14
Content Retention Principles

• Dont retain more content than is necessary
• Apply policies consistently and universally
• Apply legal holds promptly and universally
• Courts have demonstrated little toleration for
  spoliation. (Enron, etc.)

15
Content Retention Principles

• Dont retain more content than is necessary
• Apply policies consistently and universally
• Apply legal holds promptly and universally
• Enable the right people to design the policies
• Policies should make sense from a risk
  management, legal, and operational standpoint
• Get IT out of the business of making retention
  policies

16
Yet Recent Research Indicates
65 of records management professionals did not
include electronic records in legal holds.
46 of records management professionals did not
have a formal policy for implementing legal
holds.
17
Survey 1

• Does your organization have a policy for
  implementing legal holds on electronic
  information?
• Yes
• No
• Dont know

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How to Find Requested Content
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How do we find content today?

• Searching email servers
• Searching content repositories
• File shares
• Archives
• Backup tapes
• Hard drives
• CDs and thumb drives

20
Investigators identified at least seven occasions
on which Kerviel faked messages between April
2007 and Jan. 18, four of them referencing trades
that never existed. The deception was eventually
uncovered when they could find no trace of
Kerviel receiving the purported messages in the
bank's e-mail archival system...
21
Survey 2

• What kind of email archiving system does your
  organization use?
• Symantec Enterprise Vault
• Zantaz
• Mimosa
• AXS-One
• Dont know

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How to Better Prepare
23
Records Management

• Regulatory Forms
• Communications
• Permits/Licenses
• Insurance Policies
• Policies and procedures to govern the process of
  retaining and destroying content

24
Records Mgmt. and Retention Mgmt.What is the
difference?
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Retention ManagementWhat is a Policy?

• Records and Retention policies combine events and
  actions
• Events
• Content expired (e.g. a contract)
• Usage statistics (e.g. document has not been
  accessed in 6 months)
• Business event (e.g. environmental impact filing)
• Content life cycle event (e.g. new revision
  checked in)
• Actions
• Delete
• Notify author
• Archive
• Move
• Delete revisions
• Revise

26
Records and Retention Management Evolution

• Preserve paper records
• Schedule destruction
• Line of business application
• Archivist

• Preserve electronic records
• Schedule destruction
• Integrated with CMS or separate application

• Schedule destruction of non-records
• Within single repository

• Apply across multiple repositories
• Schedule destruction of non-records

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The Ideal SolutionDont just cope, fix it

• Universal Address the root cause by cataloging,
  applying retention policies, and applying holds
  to all content
• Regardless of location
• Regardless of whether it is a record or not
• Regardless of whether it is electronic or
  physical
• In-place Apply holds and retention management
  actions in-place
• Minimize impact on users
• Reduce issues associated with moving electronic
  content
• Leverage existing applications
• Flexible Provide features needed to address all
  content, not just records
• Retention triggers based on calendar, event,
  usage, revision
• Retention actions Delete, move, alert, create

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The Ideal SolutionBenefits

• Reduce the risk of keeping too much or too little
  information
• Reduce cost of discovery
• Support regulatory requirements
• Reduce clutter so that users can do their jobs
  more effectively
• Reduce storage and backup costs
• All while applying legal holds

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Protecting Content In Circulation
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Content Outside Your Firewall

• Partners sharing price lists
• Board communications
• Mergers Acquisition information
• Content shared due to litigation

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Information Rights Management

• Set policies for content access such as view,
  print and copy
• Update policies on content remotely disable
  content from being viewed
• Audit content usage when content was viewed,
  printed
• Force refresh when content has gone out-of-date

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Why Your IT Organization Should Care
33
Typical Content Growth Example company -
storage, archiving, services costs

• Email
• 10,000 user mailboxes, 100 MB per mailbox 1 TB
• 10 sent msgs/day, 25 recd _at_ 15 K per 5.25 GB
• Growth rate of 137
• Documents
• 10,000 users storing 2.5 GB documents 25 TB
• Create 1 MB/day 100 GB
• Growth rate of 100
• Calculated at 50/GB annual storage/archiving/ser
  vice cost

34
Storage Savings Storage, archiving, services

• Deleting content kept beyond its retention
  period can save up to 33 of your storage costs
• Based upon deleting 50 of your content that is
  beyond its retention period.

35
Restoration CostsThe Cost to IT

• What would it cost to find everywhere content
  exists in your organization file system,
  email, applications, repositories, desktop,
  archives, backup tapes.
• What would it cost you to restore this content
  for review?

36
Discovery Costs

• Discovery costs are typically 1,800 to 2,500
  per GB
• One time discovery on 20 of your data at 1,800
  per GB

37
Litigation Preparedness

• In case of litigation, it is important to have
  strong control over your content
• Know what evidence you have
• Quickly search it for relevant information
• Know the strength of your case called knowing
  hand
• Present organized data at discovery meetings
• Catalog of content, per new Civil Rules of
  Federal Procedure

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Litigation Savings

• A typical 1B revenue company has 146 lawsuits
  per year.
• 25 of lawsuits are settled earlier based on
  knowing hand and immediate access to evidence
  (140 lawsuits x 25 35).
• Estimated savings approximated at 20 per early
  settled lawsuit (1.5 million average lawsuit
  cost x 20 300,000).
• Year 1 Savings 35 lawsuits settled early at a
  savings of 10.5 million.
• Year 2 Savings 35 lawsuits settled early at a
  savings of 10.5 million.
• Year 3 Savings 35 lawsuits settled early at a
  savings of 10.5 million.
• Total Savings 3 Years 105 lawsuits settled early
  at a savings of 31.5 million.

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Total Savings

• Quantifiable Cost/Savings Comparison
• Storage savings over 3 years 2.3 million
• Restoration savings, 2009 20 million
• Discovery savings, 2009 12 million
• Litigation savings, per year 10.5 million
• Non-Quantifiable Cost/Saving Comparison
• Decreased corporate risk (exposure) though
  implementation of document retention process.
• Increased flexibility for new Federal Rules of
  Civil Procedures i.e. Meet and Confer early
  access/understanding of scope of evidence.
• Less vulnerability to nuisance lawsuits
• Decreased cost due to employee ability to locate
  knowledge resources amidst less clutter

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Closing Remarks