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EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
EDI 2009 Controlling E-Discovery Costs through Records Management
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EDI 2009 Controlling E-Discovery Costs through Records Management

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  • 1. Controlling E-Discovery Costs through Records Management John Rosenthal Winston LLP Deirdre Brekke Pactiv Corporation Conor R. Crowley Law Offices of Conor R. Crowley Richard R. Roberts Federal Express November 2009 2009 Georgetown University Law Center’s E-Discovery Institute
  • 2. Our Assignment
    • Controlling E-Discovery Costs through Records Management. An operational Records and Information Management (RIM) system is the foundation for ediscovery readiness, yet many companies have failed to take steps to link these processes in an effective manner. You will discuss how sound RIM practices and selective preservation of structured and unstructured documents and other data can prevent the accumulation of unnecessary data and ease the effort expended in the collection, processing, review and analysis of ESI. You will also learn how advanced RIM practices can help in early case assessment and the management of privileged ESI; how to successfully integrate an inter-company e-discovery team in RIM practices; how to obtain compliance with records retention schedules, privacy and other data protection requirements; and how to use RIM programs and processes to defend the reasonableness of search, retrieval and production efforts, including establishing the authenticity of ESI.
  • 3. Amended Federal Civil Rules
    • December 2006, U.S. Federal Rules were amended, mandating e-discovery in all federal cases
    • Changes cover five areas:
      • Early attention to discovery issues
      • Discovery of electronically stored information that is not reasonably accessible
      • Clarify how electronically stored information is to be produced in litigation
      • Procedures for asserting privilege after production
      • Sanctions
  • 4. Implications
    • Rules now in place for almost three years and the world has not ended, but :
      • 44 federal courts have adopted local rules, guidelines or forms to supplement or go beyond the Amended Federal Rules
      • 29 states have followed suit
      • Major regulatory agencies ( e.g ., DOJ, FTC, SEC) all reviewing the way they approach e-discovery
      • Amount of e-discovery required in the U.S. has doubled
      • E-discovery costs for corporations have risen dramatically
      • E-discovery risks have also increased
  • 5. E-Discovery Risks & Costs Potential criminal exposure if not done correctly Increased legal and operating expenses Heightened legal risk to the company
  • 6. E-Discovery = Increased Costs
    • Collection - $1,000 to $3,000 per custodian
    • Culling - $150 to $300 per GB
    • Processing - $250 to $500 per GB
    • Hosting - $20 to $50 per GB
    • Review:
      • Associates $150 to $350
      • Staff Attorneys $80 to $290
      • Contract attorneys $25 to $60
      • Off shore $15 to $20
    • Average custodian has 5-8 GB (1 GB = 60,000 pages)
    • Overall cost per GB can run as high as $40,000
    Cost of e-discovery in a medium-sized case with 10 custodians can run $1.4M
  • 7. E-Discovery = Increased Legal Risks
    • Courts are imposing a wide range of sanctions against corporations, including:
      • Spoliation instructions
      • Monetary fines
      • Default judgments
      • Referrals for criminal investigation
    • Case analysis:
      • Granted sanctions 65% of the time
      • Defendants being sanctioned four times (81%) as often as plaintiffs (19%)
      • Sanctioned behavior most often involved the non-production of documents (84%)
  • 8. How Do We Mitigate the Risks and Expenses Relating to E-Discovery?
    • Many corporations and firms have simply attacked the issue from the e-discovery side:
      • Guidelines on e-discovery
      • Preferred vendor programs
      • E-discovery tools for search, collection, processing, hosting and review
      • Utilization of lower costs providers (e.g., LPOs)
  • 9. Records & Information Management
    • Implementing e-discovery best practices, however, is treating the symptoms and not the actual problem
    • Reality is that the risk from and cost of e-discovery is directly related to:
      • How much electronically stored information we maintain
      • If and how we manage that information through its life cycle
  • 10. Electronically Stored Information?
    • 93% of new information is stored in digital form
    • 7% Paper or other formats
    http://www2.sims.berkeley.edu/research/projects
  • 11. The Problem Will Only Get Worse ESI’s Growth Rate – 30% a Year
  • 12. DuPont Case Study
    • Study:
      • 9 key cases:
      • Total # pages reviewed: 75,450,000
      • Total # pages responsive: 11,040,000
    • Findings:
      • % pages past retention period: 50%
      • Unnecessary review fees: $11,961,000
  • 13. Return on Investment
  • 14. Records Management
    • Systematic process of keeping what we need to keep and getting rid of what we don’t need to keep
  • 15. E-Discovery
    • Electronic discovery is the process of identifying, collecting, reviewing and producing electronic records
    Source: Socha Consulting and Gelbmann & Associates. Copyright 2005-2006. All rights reserved. Used with permission. Volume Electronic Discovery Reference Model www.edrm.net Identification Records Management Relevance Production Presentation Analysis Analysis Review Processing Analysis Preservation Collection
  • 16. Implications of An Ad Hoc or Absence of a Cohesive RIM program
    • Inability to easily access corporate information
    • Reduced employee productivity
    • Potential failure to adhere to regulatory retention requirements
    • Higher monetary costs:
      • Maintaining inventory of unnecessary records
      • Searching for and producing records in response to litigation
  • 17. Implications of An Ad Hoc or Absence of a Cohesive RIM program
    • “ Office workers can waste up to two hours a day looking for misplaced paperwork--at total of 500 hours (62.5 days) per year ” (TN)
    • “ Computer users spend 7.5 percent of their time on a PC looking for misplaced files ” ( Information Week ).
    • “ Companies typically misfile 2% to 7% of their records ” (ARMA International)
    • “ 90% of records are never referred to again” (Secured Record Management)
    • “ Companies misfile between 3% to 5% of their records, with a cost of $180 per document to recreate it and annual losses of a million records per year at a cost of $5 million per year” ( Information Week )
  • 18. Risks and Goals of E-Discovery and RIM Are Directly Related
    • Decrease volume of ESI:
      • Decrease storage costs
      • Decreased culling, processing and production costs
    • Decrease risk:
      • Retention policies and tools streamline compliance
      • Fewer unmanaged data sources and less information subject to discovery
    • Simplify retrieval:
      • Improves productivity
      • Ensures that business critical data is accessible and protected
      • Facilitates legal hold & collection
  • 19. RIM Basics
    • Even in the U.S., corporations are not legally required to maintain extensive amounts of information unless provided for by:
      • Statutes;
      • Regulations; or
      • Critical business needs
    • May maintain their “official records” in any format deemed appropriate
    • Corporations will generally not be held liable for records discarded pursuant to a reasonable records retention program
  • 20. U.S. Supreme Court on RIM
    • “ Document retention policies, which are created in part to keep certain information from getting into the hands of others, including the Government, are common in business * * * It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” Arthur Andersen LLP v. U.S., 125 S. Ct. 2129 (May 31, 2005)
  • 21. Yet, Implementation Has Been So Difficult
    • Between 30% - 75% of CRM implementations fail to produce the expected ROI (LGH Consulting, L.P. )
    • 70% of CRM implementations fail (Butler Group reports)
    • 55% of all CRM projects failed to meet customers' expectations (Gartner)
  • 22. Yet, Implementation Has Been So Difficult
    • Management has not made this a priority
    • Key stakeholders unwilling to take on the responsibility
    • Requires that different constituencies with different responsibilities and goals work together
    • Launched without defined metrics
    • Difficult to fund:
      • Not a sexy issue
      • Legal – not my problem
      • CIO – Happy to do if someone else says so
      • Compliance – not viewed as key compliance issue
      • Current economic environment has compounded funding issue
  • 23. Why Companies Have Failed to Take the Necessary Steps
    • Costs of implementing effective RIM are immediate but the savings are not immediately realized
    • Company has not been subject to sanctions for spoliation
    • Costs of searching and reviewing unnecessarily retained ESI have not been tracked
    • Outside counsel have not encouraged the implementation of RIM best practices or do not understand how RIM and E-Discovery intersect
  • 24. Retention In Practice Retaining little or no data Retaining most or all data Retain Only Important Data
  • 25. Components of Modern Records Program
    • Senior Management Buy-In
    • Records Retention Team
    • Development of IT Map
    • Records Retention Policy & Schedule
      • General records policy
      • E-mail management policy
      • Legal Hold Policy
    • Records Management Tools
    • Education & Compliance Program
    • Legacy Retirement program
  • 26. Senior Management Buy-In
    • How to get Management Buy-in?
      • Senior management must be supportive of enhancing your RIM practices in order for them to be successful
    • But it largely depends on your company’s culture
      • Do you have a cost reduction/efficiency focus (manufacturing model)?
      • Is your company one with more of a compliance culture (highly regulated, active in significant amounts of litigation, concerned about audits)?
      • Or, a little of both?
  • 27. RIM Team
    • Who should be on the Team?
    Legal Department Information Technology Business Conduct Compliance Traditional Records Management RIM
  • 28. RIM Teams Role In E-Discovery
    • Building of data maps
    • Issuance and compliance with legal hold orders
    • Education, training and coordination re legal holds
    • 30(b)(6) witness
  • 29. Developing a Data Map
    • What kind of data does the company have?
      • Developing a data map or discovery roadmap is part of a RIM program
      • May be able to develop data storage/deletion practices that will be helpful in e-discovery context
      • Enables more accurate hold practices
    • Where does the data reside and for how long?
      • Comprehensive retention schedules--key to successful RIM and defensible response to e-discovery demands
    • How do we access data?
      • IT will be able to identify applications and data storage across all corporate functions
      • IT is key participant in RIM and E-Discovery teams
  • 30. Focus On Areas Likely to Be the Target of E-Discovery Hard Drive C Loose Media Individual and Group Directories Outlook/Exchange Servers Other File Stores (e.g., SharePoint
  • 31.
    • Establishes the basic policies and practices regarding the management and retention of a company’s records:
      • Policy applies to all personnel
      • Requires all “records” must be managed in accordance with the Records Retention Schedule
      • Documents shall be retained according to the “Retention Period” specified therein
      • All records not subject to a Legal Hold Order must be retired at the end of their retention period
      • All documents subject to a Legal Hold shall be retained regardless of the Records Management Schedule
      • All personnel must perform a minimum of an annual review of their records for retirement purposes
    Records Retention Policy
  • 32. Record Management Schedule
    • A practical and tested Records Retention Schedule is the key to any Program
    • Schedule identifies corporate records by broad categories and indicates the number of years that records within those categories should be retained because of:
        • Statutory or Regulatory requirements requiring that records be held for a certain period
        • Business critical need (this factor is already built into the schedule)
  • 33. E-Mail Management
    • Over 75% of all documents created in the enterprise circulate in e-mail (Gartner)
    • Majority of the documents produced by a company in litigation are e-mail or their attachments
      • Most e-mails have no useful business purpose after 90 days
      • Most e-mails are not “official records” of a company required to be maintained under a retention schedule
  • 34. Why Records Management Tools
    • Key to successful records management is the classification of records (i.e., ability to identify records with applicable "records code" to a record)
    • Classification is the first step in records management
    • Tools can mandate and facilitate classification at the time of creation or identification
    • In absence of tools, it is difficult to mandate classification at time of the record's creation or identification, which makes records management compliance – not impossible – but difficult for your workforce
  • 35. Classification Facts
    • Employees do a poor job in accurately classifying records
    • Employees find manual classification to be highly burdensome and 50% or more will not participate
    • Manual classification can impose substantial costs on the organizations
  • 36. Classification Process Low High High Low Cost Savings Productivity Accuracy Manual Classification Authoring Templates Rules Based Classification Context Based Classification Multiple Methods Simple Rules Complex Policies Consistent Participation & Enforcement
  • 37. Potential Types of EMC Tools
    • E-mail Archivers
    • Traditional Records Management Tools
    • Hybrid Type Tools (e.g., expanded archive)
    • Enterprise Content Approaches
    • Search and Retrieval/Indexing
    • Collaboration Work Spaces
  • 38. Significant Product Attributes
    • Supports event and time based retention rules
    • Structured file plan organizes records and manages, enforces complex policies/rules
    • Enables legal holds, facilitates audit and electronic evidence discovery
    • All processes are audited and managed
    • Ensures record authenticity, integrity and contextual relationships
    • Ensures record access, retrieval and usefulness
    • Prevents unauthorized deletion
    • Ensures timely disposition and complete record expungement
    • Ensures privacy and record security policy management
  • 39. 1 st Generation E-mail Archiver Back-up Tapes Mailbox E-mail Archive
  • 40. Capture Archive Organize and Classify Index Archive 2 nd Generation E-mail Archiver Operations Compliance Discovery Messaging Servers
    • Single central archive
    • Tools, reports and other diagnostics
    Search and Discover Administer and Audit
    • User search from plug-in or Web
    • Administrator search for Discovery
    • Messages and attachments
    • Embedded messages
    • Secure
    • Compression
    • Container files
    • Tiered storage
    • In real time
    • User selection
    • De-duplication
    • Unique ID
    • Exclusion-collection rules
    • Retention and disposal
    • Content Mgmt
  • 41. Implementation & Education
    • Implementation of any program is most difficult part
      • Phased implementation with pilot groups
    • Program will depend on educating and communicating the program to all employees
      • In person training sessions
      • Development of new section on company intranet for record retention program:
        • Power point
        • Retention schedule
        • Various communication
      • New employee orientation
      • Brown bag lunches
      • Periodic focused communications
    Education & Compliance
  • 42. Compliance
    • Program is not defensible in the long term unless it is associated with a compliance program
    • Compliance program cannot be implemented until program is developed and implemented
    • Employees, however, must understand that there are consequences for non-compliance
    • Compliance program should include:
      • Annual certifications of compliance
      • Compliance audits
    Education & Compliance
  • 43. Legacy Retirement
    • Most corporations are in possession of a tremendous backlog of ESI:
      • E-mail and MS Office stores
      • Legacy database information
      • Disaster recovery tapes
    • Existence of backlog of ESI raises risk:
      • Cost of conducting e-discovery
      • Potential smoking gun documents in the ESI
    • It is possible to design a legally defensible process to:
      • Identify and preserve ESI that remains “business critical” or subject to pending legal holds
      • Retire remainder of ESI
  • 44.
    • A legacy retirement program must be predicated upon setting up a reasonable and defensible process in order that records are retired taking into account:
      • legal hold requirements
      • tax hold requirements
      • existing records retention program
    • Important that the process be documented in a manner that it can be reasonably defended
    • Targets:
      • Tapes
      • Inactive paper records
      • Legacy databases
    Legacy Retirement Process Legacy Retirement
  • 45.
    • Compile compressive listing of legal holds with categories for records subject to holds
      • Into Excel spreadsheet (key issue is whether the LHOs adequately describe categories of records to be held)
    • Compile listing of available index information of legacy inventory, including dates and related systems
    • Eliminate legacy information based upon:
      • Date ranges
      • Systems
      • Data exists on active systems
    Legacy Retirement Process Legacy Retirement
  • 46.
    • As to remaining legacy information:
      • Statistically evaluate information likely to have majority of the data
      • Target that information containing majority of data
      • For information likely to have little or no relevant information, statistically sample tapes to establish lack of relevance
      • For information likely to have some level of relevance, options include:
        • Retain until conclusion of relevant litigation
        • Conduct further sampling and review to mine out potentially relevant information
    Legacy Retirement Process Legacy Retirement

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