Ediscovery Trends

Last time, we discussed some trends in the ediscovery market.  One trend we’re seeing within organizations is an increased focus on information management.

This information management focus comes from a perfect storm of problems that companies are facing right now.  Regulatory compliance is at the forefront of most technology-related decisions, but other factors play a role in deciding how to get a grip on how information flows within an organization.

One important aspect that any information management system must account for is the ability to create a legal hold.  When an employee or company may the subject of litigation, it is important that documents are properly preserved to avoid evidence spoliation.  Having a single appliance that can defensibly handle this task would be of great benefit to any company.  Most solutions we are seeing deployed now are much more patchwork, as companies also worry about things like DLP (data loss prevention) and the security of proprietary information.

A few weeks ago, the annual Socha-Gelbmann Electronic Discovery Survey was released, highlighting several trends in the ediscovery market.

First, let’s start with market size: it appears that the overall ediscovery market grew in 2009, up 10% from 2008.  This is modest growth in good years, but in these lean times it shows that law firms have found value and are actually saving money by using ediscovery services.  Expect to see beat-the-market growth from the vendors who do the best job of culling document sets down, leading to less attorney document review work.

However, another recent trend may be pushing documents out of the hands of ediscovery vendors.  Targeted collection and preservation has made some of these document culling tools less useful, as attorneys gain experience in requesting specific documents during litigation.  The usefulness of the blanket “all documents relating to XYZ” request is outweighed by the cost of culling those documents down and then reviewing them.  This will be especially true as the data deluge continues, with ediscovery document sources becoming more numerous with no end in sight.

This is good news for many law firms engaged in litigation.  Instead of paying contract attorneys to review large swaths of varied documents, you can have those lawyers (and your experts) focus on a smaller set of documents, reducing cost.

Next post (later this week!) we’ll include some information on how the 2010 Socha-Gelbmann Electronic Discovery Survey relates to information management, and we’ll discuss a few other trends that we expect to continue in 2010 in the ediscovery market.

Clearwell has taken the lead in the mobile ediscovery market with their new product, iClearwell.  It’s a mobile app for the iPhone and iPad which allows end users to quickly get information about cases and Clearwell appliances.

Clearwell is taking advantage of the law firms who have slowly been migrating to the iPhone as their preferred mobile platform.  While the once-ubiquitous Blackberry continues to be a major player for many reasons (IT support and familiarity being important, not to mention a keyboard with tactile response), development and visibility for iPhone apps remains a distinct advantage for Apple.

Time will tell if this means that Clearwell is likely to develop for that other important mobile OS, Android.  I think Android has a bright future, but the full computing power of the OS has yet to be harnessed in the corporate world.

This new app is also a great marketing tool for Clearwell – it shows that they are responsive to the market, and makes Clearwell data easy to manipulate, display, and ultimately show off to clients.  CW’s web interface looks nice and everything, but this gives a legitimate reason to show off your new iPad!

Quick news on the ediscovery front – AccessData and CT Summation are going to merge.  Summation iBlaze is one of the more popular document review platforms around, loved and despised by many litigation support professionals – it all depends on who you talk to and what coast you’re on.  CT Summation has other tools as well, such as CaseVault and Discovery Cracker.

AccessData has typically been more focused on the data collection side of the EDRM model.  Their core business is focused on computer forensics and cyber security, but this acquisition allows them to expand a bit more into the ediscovery realm.  It will be interesting to see how they integrate their Forensic Toolkit (FTK) and incident response software into CT Summation’s review and processing platforms.

Interesting article in the New York Times about the modern use of cell phones.  Well, it’s not so much that they’re phones, but more that they’re devices for sending and receiving data.  Increasingly, people are using their cell phones in a manner we have typically associated with computers – checking Twitter, Facebook, email, etc. Those who work on the collection side of the ediscovery realm need to come up with a way to collect this data and present it so that it can be either manually reviewed or loaded into a document review platform.

This is a bit of a new challenge – while most companies think about the challenge of culling large data sets (email archives, for example), a new emphasis will also need to be placed on the collection of small amounts of data from disperate and uncontrollable environments.  Company XYZ may be able to cull and produce responsive documents within their possession, but who is responsible for the collection of relevant information that may be posted to Facebook?  What if that information is set to “private” – is it discoverable, and how do you go about collecting it?

Just some ediscovery food for thought…

I had no idea about this company until I saw this blog post on Logik and their cool Ediscovery marketing swag.  I mean really – they teamed up with a winery to make a red wine called “Redaction” – too cute.  They’ve even taken things a step further and added an ASAP Ale to their collection of alcohol-related merchandise.

It’s not exactly a surprise that CompTIA is expecting more companies to use ediscovery software in the coming years.  CompTIA is on top of this “story” largely because they’re one of the top IT certification companies in the USA.

Many companies are what I call “semi-prepared” for ediscovery work – the tools may be in place but they’ve never all been under the same ediscovery umbrella.  For example, informal internal investigations may be launched if an employee is suspected of embezzlement or theft of IP, but that may result only in the termination of the employee and not in any criminal charges (depending on the severity of the crime, of course).  IT workers may know how to capture packets across the network, but may not follow a certain set of steps that make the process transparent and able to hold up in court.

CompTIA is in a very good position to create and manage an eDiscovery certification shortly.  They released a paper called “Ediscovery Trends and Practices” at the end of 2009, which at the least demonstrates that they recognize the eDiscovery market as a growing market worth paying attention to.  I’d be curious as to see what the requirements are if CompTIA is going to offer a certification – there are quite a few separate and important tasks that could all be classified as ediscovery (data collection, document review, computer forensics, etc.), but I would hope it wouldn’t just be a generic “Ediscovery project manager” type of cert.  I’d personally want the cert to be a bit more technical and to demonstrate a thorough understanding of all necessary steps.

Of course, this is all under the assumption that CompTIA is going to offer Ediscovery certification, and they may never even do that – just speculation on my part!

In the process of litigation, it is sometimes necessary to conduct a full-scale document review.  Your litigation support vendor probably has a few ideas on how to approach such a large project, but the sticker shock can be a bit overwhelming.  Let’s look at what you’re really getting into when you need to budget for a document review project.

The first thing to look at is how many total documents you have, and what your resources are expected to be.  If you have ten million responsive documents and an unlimited budget, then you can afford to pay attorneys to review them all by hand.  But if you only want the documents that are most relevant to your litigation, I’d recommend culling the data set through an advanced search platform.

While the upfront cost for some vendors like Clearwell or Kazeon may be high, the long-term savings are there, especially for large projects.  You don’t need to hire 20 attorneys to sit in a room for months reviewing documents – not only can you reduce the overall volume of responsive documents, but you can also classify them much more efficiently than was previously possible.

After your data set is culled down, you’ll want to look at a review tool that can handle what you want to do with these electronic documents.  If it is a small case, you may wish to review them locally, but if it’s a large case involving multiple law firms, you will need to make sure that the documents can be securely accessed online.

I’ll offer more tips on effective document review sometime next week.

Found an interesting post on the topic of knowledge management and records management.  The post makes the point that if you want to know where ediscovery is going, you have to look at how knowledge management functions.  All those cutting edge, collaborative tools like wikis, instant messaging, intranets, etc. is tomorrow’s ediscovery.  How are you going to organize a document review around a wiki?  Are you going to track when each change was made, and when each page was accessed?  Are you going to be able to pull old versions of an internal blog to look for hints of inside information in the comments?

Most ediscovery review tools are focused on static documents – email, spreadsheets, PDFs.  But in businesses where knowledge and collaboration are critical to success, answering the “which party knew what information, and when” questions will be important to maintaining an aggressive stance when faced with the possibility of litigation.

Apparently Kroll Ontrack suggests that applicants for Litigation Support Project Manager positions have PMP certification.  Curiously, they also would prefer those with a business-related degree to a computer science related one.  PMP stands for Project Management Professional, and proves that you are willing to spend several hundred dollars to add three capitalized letters to your resume.  And the company that hands them out – yeah, it’s called the Project Management Institute!  I believe you also must take classes from the PMI to qualify.  Don’t get me wrong – I’m not mocking those who have this certification, as it shows that they are willing to do things that other project management candidates are not, but this use of certifications certainly isn’t helping hire the best and brightest in the ediscovery field.

The post also points out that Kroll would like their PM’s to have a bachelor’s in finance, not in computer science or any related technical field.

We’re going back to basics here with some definitions, since it’s not always clear what is meant by a legal hold (aka litigation hold).  Basically, if your company’s legal counsel thinks that you will be subject to litigation soon, they will issue a legal hold, which means that you are required to preserve certain documents and records (as opposed to destroying them after they are no longer needed).  For electronic discovery, this often means that tape backups should be preserved rather than re-used, and that any electronic documents should be saved in their current state, almost as if encased in amber like a mosquito in Jurassic Park.

After all potentially responsive documents are preserved, then any documents that are not relevant to the litigation may be discarded.  This is called culling, and can be done with a number of litigation support software packages.  Most of these document review platforms come with some kind of search functionality, so you can reduce the number of documents quickly by only find docs authored by a certain person, or within a certain date range.

Finally, until the litigation has been resolved, the litigation hold is ongoing, so any documents that are produced that relate to or reference the litigation may be discoverable.  In addition, if any data is found to have been deleted or otherwise altered, sanctions may be imposed on legal counsel for a failure to properly issue a legal hold.

Microsoft’s Sharepoint Server 2007 has some limited eDiscovery functionality baked in to the software.  It’s mostly used for legal holds, and can only be used with the Records Center site template.  But with Sharepoint Server 2010, expect more features and functionality.

First of all, any site collection is now able to be targeted by Sharepoint’s Legal Hold functions, not just the Record Center site.

Sharepoint will also now be able to search your site collections for data that could be subject to a legal hold.  Finally, Sharepoint Server 2010 will also be able to export these search results into a separate repository for review and analysis.  No word yet on whether you will be able to export into a document review platform or EDRM XML.

For more info on ediscovery and Sharepoint 2007, check out this link.

Here’s an interesting (and lengthy) blog post on the case Lawson v. Sun Microsystems, Inc. 2010 WL 503054 (S.D. Ind. February 8, 2010).

Essentially, during the course of ediscovery in this case, defense counsel decided they were going to produce some privileged ediscovery in a password-protected format.  Plaintiff (not plaintiff’s counsel) then proceeds to crack the password (if you don’t know much about password-cracking, let’s just say that it can be more trivial than one might think), and then informs his attorneys about it, with an email titled, “Password protected files – Unlocked!”

Yeah, that’s going to anger some people, namely opposing counsel, who moved for sanctions.  As it turns out, everyone was at fault.  The plaintiff obviously shouldn’t have been cracking open privileged documents, plaintiff’s counsel had never even read or noticed the email, and defense counsel really shouldn’t have been producing privileged documents anyway.

I suggest you read the whole post – it’s a very good case-based analysis of ediscovery ethics.

Here’s a slightly different approach on an old ediscovery problem: what to do with all this data?  Because data lives in so many different places, and there are so many different ways to get at the data, perhaps this non-preservation of specific ESI is the way to go.

One important thing that happens when parties agree NOT to preserve certain data is that their costs go down.  Instead of worrying about litigation holds on a multitude of complex systems (tape backups, voicemail, email, network traffic, browser history and cache, logs, etc.), the parties agree not to preserve certain things so that the company can continue with day-to-day operations.

I’m not sure this solution is ready to be widely implemented yet, but it’s a good start when it comes to reducing overall legal costs.  Some electronic discovery sources are not going to necessarily find you information pertinent to litigation, or are simply too costly to recreate in a meaningful way (like backup tapes).  This approach is keeping ediscovery sources confined to the realm of documents “kept in the ordinary course of business” and without placing a burden on that business.

Found an interview with Stephen Chan from ZL Technologies, which is a storage management company.  He thinks that the future of ediscovery is in the cloud, mainly because companies are watching dollars more closely:

Well, cloud is all going to continue to provide a lot of the benefits. I think that proponents have always spoken up which is a lower TCO, less resources and less management overhead for the companies that utilize the cloud. I think the challenge will always be to ensure that the solutions are of equal and similar capabilities as the on-premise solutions, which I don’t, again, I don’t feel that there’s any reason for there to be any difference. The trend going forward will be this. I think that you see, especially, in this economic climate you have a lot of companies, which are really focusing on their costs.

And because of that, cloud computing makes a lot of sense for them. But once they make that decision, once that sort of let’s say for example, its cost in this case that gives them that impetus to get over the edge and say, okay, we’re going to go cloud. What we’ve seen is once they decide to cloud in any fashion, maybe initially it’s just a storing a little data out there, the application’s still internal but they’re using cloud storage to store the data. It’s actually a very small hump for them to go over and push everything out there.

Interesting article on a new iPhone app called BarMax, which poses a challenge to the established BarBri.  Both are prep courses for passing the bar exam.  BarMax’s new iPhone app costs $1000, the maximum allowed by the iTunes Music Store.  BarBri had previously charged several thousand dollars for their services (but did not have an iPhone app), so this $1000 BarMax app is actually driving prices down!  BarMax also has several positive reviews already.  Legal test prep is big business!  Found via.

One of the best things about the current state of ediscovery is that it is accessible to all sizes of law firms.  Litigation support vendors are willing to take on smaller jobs once they have a proper EDRM workflow in place.  The infrastructure is in place, so why not use it?  During an economic downturn, law firms should be able to take advantage of reduced costs that many ediscovery vendors are currently offering.

I’m not sure how significant Toyota’s “Books of Knowledge” are, or who exactly knew about them, but withholding electronically stored information (ESI) is not exactly being forthcoming in litigation. Obviously, there are rules as to what must be disclosed and what information can be protected during discovery, but this isn’t very good news for Toyota.

The Posse List is reporting that a congressional committee found that Toyota “deliberately withheld relevant electronic records that it was legally required to produce in response to discovery orders in litigation”. This story will surely develop further, but it seems that the electronic evidence was not produced, and it’s doubtful that steps were taken to preserve this ESI.

Judge Scheindlin, who handed down several important opinions in a case entitled Zubulake vs. UBS Warburg, has sanctioned 13 plantiffs for improperly preserving ESI.  These sanctions were handed down despite the litigants acting in good faith – they had simply failed to preserve records from employees who may have been related to the litigation.  This action is called a litigation hold, and usually involves the preservation of data as soon as the party knows they may be subject to litigation.

The judge also differentiated between negligence and willful misconduct, claiming that only in cases of willful misconduct was the offending party required to prove that their negligence did not harm the opposing party.

This case sets an important precedent for future parties, and possibly lays some groundwork that other judges will be able to follow.  When it comes to ediscovery spoliation and tampering, the courts will not take this issue lightly.

Ralph Losey has a quick video rundown of his three keys to successful ediscovery.  Law firms need to start using technology to their advantage and work with their technology department, rather than fear new digital trends.  Cooperation from all parties involved in any litigation is also essential.  I also like the role of a modern Sherlock Holmes being cast as a computer forensics expert!  It’s a short video, and I recommend watching.