E-Discovery Solution Offering

From MIKE2.0 Methodology

This Solution Offering currently receives Major Coverage in the MIKE2.0 Methodology. Most required activities are provided through the Overall Implementation Guide and SAFE Architecture, but some Activities are still missing and there are only a few Supporting Assets. In summary, aspects of the Solution Offering can be used but it cannot be used as a whole.

Introduction

"eDiscovery" refers to the process of finding and producing documents stored in electronic format in response to litigation or regulatory requirements. Civil litigants, regulators and criminal prosecutors now commonly ask for copies of selected e-mail communications or make broad requests for all electronic records. That trend intensified on Dec. 1, 2006, when changes took effect in the U.S. Federal Rules of Civil Procedure, which make electronic records discovery a standard part of federal proceedings.

Executive Summary

eDiscovery has become an increasingly important process as organizations must process very large amounts of electronic information in a variety of forms. While technologies continue to improve, the challenges continue to grow. Most organizations are now drowning in an overload of information and in several case, mis-management of this information has lead to costly penalties.

Federal Rules of Civil Procedure (FRCP)

The FRCP governs the process followed in United States District Courts in all civil suits. Amendments to the FRCP expanded the rules with regard to eDiscovery and the use of electronically stored information in civil matters.

Concepts such as “electronically stored information stored in any medium” have been formally introduced into the Rules and will be subject to inspection, testing, sampling and incorporation into legal proceedings. These amendments require organizations to respond to electronic discovery requests and expectations of the Court.

The new rules recognize electronically stored information as a distinct form of discovery, and require the parties in a federal lawsuit to provide, at the outset, a detailed description of how they manage, retrieve and purge electronic data—including unstructured repositories such as e-mail systems, document libraries, and instant-messaging logs. Though the new rule changes apply to federal courts only, state courts and other jurisdictions can be expected to follow the federal rules over time. Among states that have already adopted them are California, Delaware, Illinois, Maryland, Mississippi, New Jersey and Texas. CIO’s and IT groups will now be burdened with significant new responsibility to support their legal teams, as most large organizations are involved in lawsuits on a regular basis.

The burden of litigation support

"Managing electronic discovery is probably a number-one initiative at all legal departments," says Patrick Oot, who leads an e-Discovery team of three attorneys and an information-technology liaison at Verizon. "Depending on the volume of litigation an organization has, this can be one of largest line items in your [legal] budget.". Recent studies have shown that:

The average cost of electronic discovery in litigation has climbed to more than $1.5 million per matter.

• 90% of US corporations are engaged in litigation
• 99% of all documents are now stored in electronic format
• The average company with revenue exceeding $1 billion dollars averages 147 simultaneous lawsuits

As reported by Rob Garretson of CIO Insight, Morgan Stanley is expected to post more than $7 billion in profits for 2006. However, these profits were put at risk last year when it lost a Florida jury trial and was directed to pay a $1.45 billion judgment, now approaching $1.6 billion with interest and other adjustments, due to its inability to properly produce electronic evidence.

The jury found in favor of billionaire Ronald Perelman, who accused the global investment bank of helping Sunbeam Corp. inflate its earnings in 1998. Perelman had sold Sunbeam his controlling interest in camping equipment maker Coleman Co. for $680 million in stock that became worthless after Sunbeam restated earnings and filed for bankruptcy. The case famously turned on Morgan Stanley's mishandling of e-mail evidence, which led presiding Judge Elizabeth T. Maass to instruct jurors they could assume Morgan Stanley was complicit in the deception because of its failure to turn over all relevant e-mail.

The following is a small representative sample of how significant judgments can turn on the basis of proper or improper handling of electronic information.

• Zubulake v. UBS Warburg (April 2005) – UBS’s mishandling of emails contributed to the $29.2 million verdict held against the company.

• Coleman Holdings vs. Morgan Stanley (MS) (March 2005)- MS’s mismanagement of e-discovery related responsibilities such as overwriting of emails, mishandling of backup tapes, flawed searches, inability to comply to e-discovery requests led to $1.57 billion verdict against MS.

• Renolyds Metal vs. Alcan (2006) – Due to their inability to manage their electronic documents, Defendant inadvertently disclosed privilege documents to the court which helped support a $59 million verdict against the Defendant.

Why eDiscovery has been difficult for litigants

Why has discovery of electronic information been so difficult, time consuming and costly? A key factor is the number and complexity of sources of useful information, which continues to grow. More data is stored in more places and is harder to find – in email archives, enterprise transactional databases and knowledge repositories, as well as in unstructured document collections both within and outside the enterprise.

As a result, finding relevant information for litigation discovery can be inconvenient, ineffective, time consuming, and costly. Legal staff may have to manually log into different systems and use different techniques to look for what they need. Uncoordinated processes, disparate technologies, and different user interfaces present data differently, creating inconsistencies and confusion. For the legal team, this means lost productivity, uncertainty, and elevated risk.

A lack of effective information management process and associated legal search tools can represent a huge burden when supporting legal discovery. Without an eDiscovery solution in place, significant staff resources can be spent searching for information, information quality may be low, and litigation risk will remain high.

Good policy supports good practice

Efficient litigation support and eDiscovery starts with effective enterprise-wide policies that address the important aspects of information lifecycle management. To develop such policies, a good approach can incorporate the Electronic Discovery Reference Model from Socha & Gelbmann, to provide a framework and starting point to evaluate and improve the IT information management policies which are important for eDiscovery.

Socha and Gelbmann Electronic Discovery Reference Model

Records Management

Document retention policies address the creation, retention and disposition of information records. The United States Supreme Court recently noted: "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 v. U.S., 125 S.Ct. 2129, 2135 (U.S. May 31, 2005). Properly maintained and monitored corporate records retention policy can reduce risk for both the corporation and its employees, particularly in light of the Sarbanes-Oxley Act and expanded oversight of corporate conduct. More than 90% of business communications activities take place in an electronic environment. Current trends in pre-trial discovery also have focused on electronic communications, substantially increasing costs, and risks associated with poor records management. Many corporate records management policies do not adequately address the creation, management and disposition of electronic records.

Identification

Identification refers to the process of learning the location and contents of data which an organization, which may need to be preserved and potentially disclosed in legal proceedings.

Preservation

Preservation of information for eDiscovery has become more costly in recent years due to increased volume of electronic information. It is difficult to know in advance when to preserve and hold the increasing volumes of material which may be needed in multiple locations, platforms and formats. The FRCP requires that parties agree early in the process on scope and responsibilities related to discovery, which can be extensive.

Document retention and destruction policies must be defined for the enterprise, clearly communicated, and monitored for compliance. To assure compliance with legal hold orders and through good preservation practices, senior management and key information owners must be in close alignment.

Collection

Collection is the acquisition of electronic information marked for discovery and retention in the identification phase. The collection of electronic information by the owner of that information is usually intended to be reviewed before production to opposing parties. Electronic information should be collected in a manner that is comprehensive, maintains its content integrity and preserves its form. Increasingly, “metadata” must be collected and maintained during this process and information regarding the chain of custody and authorization is required. Also, information should be collected in its native file format whenever possible.

Processing

eDiscovery processing must be flexible to accommodate a wide variety of data types, handle each form in a manner appropriate to the source, and generate output in accordance with review requirements that often vary according to different situations.

Review

Document review is the step used to determine which documents are to be produced, and which privileged documents are to be withheld. The legal team can begin at this step to filter the factual issues in a case, based on the electronic documents. This guides the process (a) to understand the scope of the review, (b) to put in place supervision and procedures for managing the reviewers and (c) to select any appropriate tools or technology to automate the review.

Analysis

The Analysis process guides the evaluation of collected electronic materials to determine relevant summary information, such as key topics of the case, important facts, specific vocabulary and jargon, and important documents. This information is useful to help with important early decisions and to improve the productivity of subsequent discovery activities. Analysis is performed throughout the process as new information is uncovered.

Production

Production of electronic information is addressed in the amendments to the Federal Rules of Civil Procedure. Rule 26(f) sets an expectation that the method and format by which electronic data are to be produced should be considered and negotiated by the parties early in the discovery process. Rule 26(b)(5)(B) addresses the inadvertent production of privileged information and outlines the procedure by which this issue is to be dealt with in a case involving electronic data. Rule 16(b)(5) provides that any agreements reached regarding the assertion of privilege after production will be included in the Scheduling Order. The production of electronic data has presented challenges in the discovery process which have been addressed by these specific rules.

Taking eDiscovery to the next level

An effective eDiscovery solution must be structured to align with this overall process. It must include not just good methodologies and procedures, but also the technology foundation to support automation to efficiently execute these policies. A good eDiscovery solution will structure workflow and responsibilities to allow easier litigation discovery, and will likely include technology aligned with these policies that is able to search available data repositories, tag documents, preserve and retain critical files, and manage the collection and presentation of information in a controlled and flexible manner.

Unfortunately, most general-purpose IT search products and processes are not designed to satisfy eDiscovery requirements, where potentially billions of documents and data record are subject to search and discovery. Although most traditional enterprise search tools can return results using focused search requests, they are designed satisfy simpler types of requests from enterprise users, not the complex requirements of litigation support teams.

To be effective, an eDiscovery solution should exhibit several characteristics. It should be:

• Comprehensive – Litigation support and eDiscovery affect many groups, systems, and functions. It is critical that eDiscovery solutions cover all areas of the organization.

• Relevant – Legal review of information is the single most costly element of litigation support. Accordingly, the best approach to eDiscovery must include tools that efficiently minimize document redundancy, duplication, and irrelevancy.

• Universal – The eDiscovery solution should serve as a general interface to the organization’s information. It should therefore broad net over as much information stored in as many repositories as possible.

• Intuitive – For the technical tools, a common, simple and familiar interface is key to user adoption, allowing the delivery of the timely, relevant content required by employees to do their jobs. The eDiscovery solution must feature easy search string entry, good reports and highly relevant results that are consistently the most likely based on the query and role of the searcher.

• Responsive – The eDiscovery solution must be responsible to flexible requests, and efficient in its processing. This means that the solution should pre-index and pre-store results where possible and provide rapid return of results.

• Secure – The eDiscovery solution should search all accessible content and only display results appropriate to the role of the viewer with the same level of controls in place.

• Cost-Effective – The eDiscovery solution should be cost-efficient, and not require complex administration, be hard to use or be expensive to deploy. While the amount of enterprise storage now grows exponentially, the cost of the solution should not increase dramatically. Increasing volume should not result in higher cost.

Realizing the benefits of an eDiscovery solution

An effective eDiscovery solution can deliver many benefits. For the legal team, it can increase productivity by making relevant information easily accessible and retrievable. Organizations can focus on using information, not on searching for it, finding, tagging, storing and organizing it – reducing risk and containing costs.

Solution Offering Purpose

This is a Core Solution Offering. Core Solution Offerings bring together all assets in MIKE2.0 relevant to solving a specific business and technology problem. Many of these assets may already exist and as the suite is built out over time, assets can be progressively added to an Offering.

A Core Solution Offering contains all the elements required to define and deliver a go-to-market offering. It can use a combination of open, shared and private assets.

Solution Offering Relationship Overview

The Composite Solution Offerings go across multiple Solution Groups

The MIKE2.0 Solution Offering for EDiscovery describes how the Activities and Supporting Assets of the MIKE2.0 Methodology can be used to deliver EDiscovery Solutions. This comprehensive solution brings together many aspects of the overall MIKE2.0 Methodology and also makes recommendations on the use of external assets.

MIKE2.0 Solutions provide a detailed and holistic way of addressing specific problems. MIKE2.0 Solutions can be mapped directly to the Phase and Activities of the MIKE2.0 Overall Implementation Guide, providing additional content to help understand the overall approach.

The MIKE2.0 Overall Implementation Guide explains the relationships between the Phases, Activities and Tasks of the overall methodology as well as how the Supporting Assets tie to the overall Methodology and MIKE2.0 Solutions.

Users of the MIKE2.0 Methodology should always start with the Overall Implementation Guide and the MIKE2.0 Usage Model as a starting point for projects.