The Fortiva Blog

Preparing for FRCP - Litigation hold (Part 4 of 5)

Posted by Alan Armstrong, VP Business Development

“Stop recycling the tapes!” Our prospects often described this as their approach to litigation holds before implementing Fortiva.

FRCP now requires that companies place a litigation hold on data immediately upon hearing of a potential lawsuit. This means that companies cannot wait even until the lawsuit is officially filed; they must place the hold upon suspicion of an impending lawsuit.

A Litigation Hold suspends disposition of information pending the outcome of a related lawsuit. The typical approach has several problems, but the primary problem is the lack of precision; when you place a hold on a set of tapes, you are retaining all of the information on those tapes, which will certainly be more information than you are required to retain.

And with more information comes a greater cost of processing and filtering, but worst of all it increases the risk of retaining information beyond its desired retention policy.

The other problem with the typical approach to litigation holds is that they often rely on end users to refrain from deleting information. After legal makes the “backup tape retention order”, the next step is often to instruct users to stop deleting any relevant information.

Does this sound dangerous? Consider:

• When legal asks an end-user to stop deleting information related to a legal case, they are frequently asking someone under investigation to preserve incriminating evidence.
• “They have been warned” doesn’t cut it. In case you are thinking that it may be OK if an end-user deletes information, even if they do so illegally, think again. The court holds the company and its lawyers responsible for the enforcement of retention policies. For examples of this, see the Qualcomm and the Intel vs. AMD cases.

Our recent survey found that companies are largely catching on. When asked whether companies had formalized and enforced a litigation hold process for email, the results were encouraging:

These numbers are a stark contrast from our survey of March 2007, when 91% said that they had no litigation hold in place.

You may rightly ask, then, what is the alternative to the blanket approach of litigation holds. The answer lies in centralizing control of the information. In the Fortiva archive, creating and enforcing a litigation hold is as easy as a few clicks, and no action is required by end users. With this approach, you can easily implement the best practices that we recommend:

1. Empower legal counsel to oversee litigation hold process and ask IT to demonstrate that litigation holds are being enforced
2. Never rely on end users to enforce a litigation hold
3. Narrow litigation hold to include only responsive information (by keyword, custodian, date range, etc)

If you follow these directions, you will no longer have to retain “all or nothing”. Take a look for yourself.

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

Preparing for FRCP - Archive as Strategic Weapon (Part 3 of 5)

Posted by Alan Armstrong, VP Business Development

In this series we are looking at the basics of FRCP compliance. In my previous article, I pointed out that many companies fail to meet the most basic federal rules because they get embroiled in debates about retention policy. Indecision means non-compliance!

I think the reason that companies fail to decide is because they are focusing on the wrong question. Most times the debate is about whether information is a legal asset or a liability, and that question cannot be definitively answered; in some legal situations, the information will be in your company’s favor while in others, it will be against you. The trouble is, the potentially incriminating information can’t really be controlled or even destroyed (too many copies exist, and once the email is sent outside your company, you don’t have the power to destroy it). In their indecision about retention policies, companies continue to go through expensive discovery procedures, and must eventually deal with the incriminating or exculpatory information.

I suggest that you consider this issue from a different angle: Information discovered early is a strategic weapon. Forget about assets and liabilities; in every legal case you’ll have to deal with both. What can make the difference, though, is the ability to pinpoint information instantaneously. With the right information in hand, your company can use the information strategically to have cases withdrawn or dismissed before they even get to the “meet and confer”, or worse yet the costly discovery phase.

To illustrate, allow me to share the story of one of our customers, anonymously of course.

John (not his real name) described a legal action that came against his company. The company was in the middle of a very large business transaction, and a supplier sensed that the company was vulnerable to a legal attack. The suit was launched, and of course legal came to IT looking for evidence. Because John had implemented an email archive (Fortiva), and imported all historical email into the archive, he was able to instantly query the archive for relevant email.

With a small and targeted set of search results, he quickly exported the data to PST and provided it to one of the company’s contract administrators. After reviewing about 100 emails, the contract administrator pulled 16 emails that clearly demonstrated than the supplier’s claim was false.

Our customer John took those 16 emails, sent them to the plaintiff, and the case was immediately dropped. Needless to say, John was pretty proud of his foresight. Because he had retained email, he had more information than the opposing side.

Bottom line: For Legal, Email, in a searchable archive, can be more than an Asset. It can be a strategic weapon that you can use to defend your company.

So how long should you retain email? If you get beyond the false dilemma of asset vs. liability, you can let the business drive retention policy. I hope that helps you simplify the whole question.

-    Alan

PS: This argument only makes sense if you have an archive that your legal counsel can search quickly and painlessly. Most archiving software is painfully slow to search, so your legal counsel may not even have imagined it would be possible to access the “strategic weapon” on their own in 20 seconds or less. That’s why Fortiva issued the Search Challenge. As far as I know, Fortiva is the only company in the industry to contractually guarantee search performance. And if our logic is right, it won’t be easy to emulate. See our series on search for the gory details.

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

Preparing for FRCP - Email Retention (Part 2 of 5)

Posted by Alan Armstrong, VP Business Development

A mentor once counseled me that the most important thing about a company strategy is to have one. It may sound trite, but it is actually quite profound; he is saying that there may be many valid strategies, but ultimately you just need to pick one, stick to it, and focus on execution.

What’s the relevance to email and document retention? In this series we’re focusing on the basics of FRCP compliance, and the first question that always comes up is: What retention policy should we implement? The FRCP guidelines on retention policies are similar to my mentor’s advice on strategy:

1. Have a policy
2. Enforce the policy
3. Be able to demonstrate that you are enforcing the policy

Were you looking for something more specific? Unless your company is regulated in some way (financial services and some healthcare companies may fall under more specific regulations), the FRCP does not specify a retention policy.

Many companies that I meet with wish that the fed would simply dictate a timeframe for retention, because in the absence of such specifics, many companies fail to decide on a policy, and as a result, fail to comply with the regulations.

Once you decide on a retention policy, you can begin to move towards compliance. I’ve seen several companies who delay and delay and delay, until ultimately they are caught in a legal situation by their own inaction.

So my primary message here is: Decide on a policy!

But how do you decide on that retention policy? Stay tuned for my next post.

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

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

A Legal Discovery Primer for IT - Key Definitions

Posted by Fortiva Blog Editor

As you may already know, an effective email archive can help your organization save a lot of time and effort if you ever face a legal discovery request. You need to ensure that your archiving solution is well equipped and allows you to perform several functions with ease such as enforcing an email policy, searching and retrieving data, and placing litigation holds. Being able to place litigation holds is especially important so you can save yourself from receiving a guilty verdict due to spoliation.

At Fortiva, we often hear from IT professionals who are confused about the meanings or implications of legal discovery terms.  If that sounds like you, then this series of definitions with related case examples should help you to better understand your legal counsel or HR department the next time you face an eDiscovery request.

Legal Discovery
Basically, legal discovery is a part of the pre-trial phase in a lawsuit when the parties involved in litigation can request documents and other evidence from the opposing side.  The parties can compel the production of evidence by using a subpoena or other discovery devices such as request for production and disposition.  Essentially these discovery orders can target any source of data within an organization, be it electronically stored or on paper, but frequently the email system and file servers are at the top of the list. According to Socha Consulting LLC, for the average litigation case, email represents 80% of the requested documents.

FRCP
The Federal Rules of Civil Procedure (FRCP) governs the conduct of all civil actions brought in the U.S. Federal district courts. Recent amendments made to the FRCP require all companies to retain all their corporate correspondence (including electronic online records) and make them available to the court in case of a lawsuit, without the court having to ask for them specifically.  These amendments were developed to make court proceedings more time-efficient. A brief description of the new amendments and its implications on electronic records retention and management can be found here.

ESI
The Sedona Conference defines ESI as electronically stored information, regardless of the media or whether it is in the original format in which it was created as opposed to stored in hard copy. With over 70% of business-critical information being stored in email and other electronic messaging resources, ESI has become an increasingly important source of evidence in lawsuits today.

eDiscovery
Electronic discovery is commonly referred to as eDiscovery and is defined as the process of identifying, collecting, preparing, and producing ESI for the purpose of obtaining evidence in a legal process.

Litigation Hold
A litigation hold is a communication or process used by companies to advise their employees of pending or anticipated litigation and ensure that relevant records are not destroyed. Relevant records are documents that may pertain to the upcoming litigation and according to the FRCP, this includes email messages and attachments. Failure to preserve documents for a litigation hold can have very negative consequences during a trial (see spoliation below). A litigation hold may also be referred to as “legal hold”, “preservation order”, “suspension order”, “hold order”, “hold notice”, or “freeze notice”.

Spoliation
Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for use as evidence in pending or foreseeable litigation, audit, or government investigation. Spoliation is considered a criminal act, regardless of whether the records were destroyed intentionally or accidentally, and may result in fines or incarceration. It can also lead to a negative inference finding that can ultimately lead to a guilt verdict.

To effectively prepare for litigation, your organization must be familiar with the laws and regulations that impact your industry. Additionally, it is crucial for firms to have effective technologies in place so that they are able to respond to legal discovery requests and avoid spending a considerable amount of time and money in litigation. Later posts in this series will look at the above defined terms in more detail and provide actual case examples where a lengthy lawsuit could have been avoided had the firm implemented an effective email archiving solution.