Is Your Legal House in Order?

Supreme Court eDiscovery Ruling Impacts Data Management Strategies for Businesses — from Fortune 500s to Mom-and-Pops

Michael P. Binko, APR CEO and President, kloudtrack®

In December of 2006, a few very critical changes to the Federal Rules of Civil Procedure (FRCP) were turned into law when the Supreme Court ruled that the collection-of and availability-to electronically stored information (ESI) must be made available to litigants in civil court proceedings.

At that moment, the landscape for future litigation/arbitration and the manner in which businesses of all sizes handle data archives changed significantly.

The amendments to the FRCP, which are often collectively referred to as the eDiscovery Ruling, establish best-practices and processes related to ESI and point to the significance of ESI in the discovery process of civil proceedings. The eDiscovery Ruling goes on to identify various ways that information and archived data must be made available to counsels during discovery periods and emphasizes how technologies can play a critical role in determining adherence to the rulings or legal liability.

Broad Impact Across Industry Sectors
The eDiscovery Ruling has impact across all business sectors, however, is particularly important for industries that are prone to litigation, consumer watch-dog groups and/or regulatory scrutiny.

Recent market research, such as the annual Socha-Gelbmann Electronic Discovery Survey, show that more than half of CIOs and information technology (IT) managers at most companies, do not even realize they and their company-employers could now be found guilty of “virtual shredding” simply as a by-product of the way they back-up or store information.

No longer can an IT team simply re-use or record-over archived data on a regular basis. Instead, a formally identified regimen of business rules, processes, workflow and document management is now suggested for all companies. Information (documents, e-mails, communications, etc.) now must be archived for a reasonable period of time and accessible to counsels on both sides of the table during discovery stages of litigation.

New Sheriff in Town
While it is clear that the eDiscovery Ruling opens the door for adverse impact on companies that might be sued or involved in legal situations. The good news is that the Supreme Court has also given fairly straight-forward guidelines as to how businesses can protect themselves and become less at-risk by “policing” their own database technologies, workflow/business process management techniques and various IT archiving strategies.

While the eDiscovery Ruling and the resulting tasks for CEOs/CIOs and IT teams may seem like a grim cloud of Big Brother scrutiny, the good news is that technology solutions such as Software- as-a-Services (SaaS) offer eDiscovery support at affordable costs and with significantly more flexibility than traditional enterprise software – particularly for small-to-medium enterprises (SMEs).

Obviously, Fortune 500 behemoths are able to prepare and defend against these concerns with their large IT budgets and armies of IT staffers. In addition, the eDiscovery rulings have little impact on companies that have already given ample consideration to risk mitigation from a legal perspective as these businesses likely already have technology road-maps and best-practice strategies in place.

Companies finding themselves on the outside-looking-in can quickly catch up; however, great care should be taken in planning and implementation. The devil truly is in the details and challenges will continue to be squarely placed on SMEs to plan and police properly.

Cost is Not the Issue — Team Approach is Critical
Given new technology platforms such as SaaS, ASP and outsourced solution services, IT costs are no longer the critical factor in enterprise process management and should not be a limiting factor for eDiscovery compliance. Instead, the fundamental aspect of preparation, planning and implementation for eDiscovery, just as with most other business challenges, is teamwork.
Executive, Legal, Operations, IT and possibly even Board members all need to be active in mapping out the strategies and ensuring proper rollout of best-practices. In fact, many companies who begin to look at their operations for eDiscovery find that their IT and other teams also quickly realize that many areas of their business would experience significant productivity gains through better data management, workflow and business process management.
So, while the effort to address eDiscovery is not minimal, the task affords an opportunity to take a step back and look at your business from a broader perspective.

On July 16, 2010, posted in: Recent Articles by
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