Preparing for FRCP – Basic Steps for IT and Legal (Part 1 of 5)

Posted by Alan Armstrong, VP Business Development

I described earlier how the lawyers for Qualcomm found themselves in very hot water earlier this year. When lawyers get sanctioned, the water is very very hot. As that case continues through the court I would like to look at the wider trends: how are companies responding to the changes to the Federal Rules of Civil Procedure (FRCP), and what practical measures can your company take to protect yourselves against the courts, who have become increasingly demanding about email and other e-Discovery requests.

While I’m not a lawyer, and I certainly don’t claim to be offering legal advice, I have spent a lot of time working with customers to understand the changes to the FRCP amendments and what they mean. At Fortiva, we’ve also researched how these changes are impacting businesses through independent surveys. We recently shared this information in a webcast, and based on the positive feedback, I decided it might be helpful to put it into a series of posts that will start by covering overall market trends (this article), followed by an in-depth look at the three critical areas of FRCP compliance (in future posts):

1. Enforcing retention policy
2. Litigation hold
3. Collection, search, and retrieval

For each of these areas, I will describe what the law requires, what our industry surveys tell us about what your peers are doing, and some best practices. Finally, I will wrap up the series with some thoughts on how to overcome the barriers to getting your company ready for e-Discovery.

But first let’s return to the Qualcomm case. This case is significant on its own, with its high profile and high impact to the individual lawyers, but more than that it seems to be part of a wider trend where the courts have lost patience with companies claiming ignorance or citing prohibitive costs for e-Discovery requests. Over the past year, Fortiva commissioned two surveys (March 2007 Survey & November 2007 Survey ) that measured the ongoing impact of the changes to FRCP in December 2006, and the results are quite dramatic:

	In March 2007	By January 2008
No email retention policy	46%	13%
Unprepared for FRCP	94%	33%
No litigation hold process	91%	28%

Companies don’t take steps like this because they enjoy it; compliance rarely drives revenue, but as the courts have started to enforce the new rules, the financial and other costs of non-compliance have forced companies to get ready. Our January survey found that average litigation costs (excluding settlement costs and judgments) exceeded $200,000 for 51% of organizations, with 8% putting that cost at over $1M. A full 20% of companies have settled a case to avoid the cost of search and recovery of email.

A few other stats that should be cause for concern:

• 35% are not confident that emails are fully reviewed to ensure attorney-client privilege is not waived before being sent to opposing counsel during Discovery
• 47% of respondents do not agree that their legal team can effectively review relevant email in the 99-day window before the meet and confer session
• The majority of businesses have recognized the potentially negative impact e-discovery requests can have, and are doing something about it. Based on the survey, the majority of businesses are now actively taking steps to reduce their risk, meet the FRCP requirements and improve their e-discovery processes.

Is your legal team waiting for fines or sanctions to get prepared? Our surveys indicate that the majority of businesses now recognize the negative potential impacts that e-discovery requests can have and are now actively taking steps to reduce their risk. If yours is not, you’ll soon be in the minority; FRCP compliance is quickly becoming standard operating procedure.

But if you haven’t yet covered your bases, I hope you find this series of articles helps to provide some pragmatic steps to do so.

Read more on the Preparing for FRCP series - Part 1 - Part 2 - Part 3 - Part 4 - Part 5