Electronic discovery, or e-discovery, is the gathering of
digitally stored business documentation relevant to a civil
lawsuit, a prosecution or a government investigation into a
regulatory violation.
Like the legal discovery of paper documents, e-discovery
requires that a party to a legal proceeding produce, in a timely
manner, any electronic document the court may deem relevant.
E-discovery can be costly and time consuming but the possible
consequences of failing to prepare adequately for an e-discovery
action can be disastrous, says Gartner. Companies have been
sanctioned for failing to preserve electronically stored documents,
even when the documents had not yet been requested, but the need to
produce them had been ‘reasonably anticipated’.
The analyst firm predicts that in 2006 at least 75% of all
global companies will be involved in legal or regulatory action
that requires a systematic approach to legal discovery. Within
this, IT will play a crucial role.
Gartner predicts that through 2010, companies that have not
adopted formal e-discovery processes will spend twice as much on
gathering and producing documents as they will on legal
services.
“Chief Information Officers (CIOs), general counsels, IT
security professionals, records and email administrators and
operations staff all need to understand IT’s function in legal
discovery,” said Debra Logan, research vice president at Gartner.
“IT plays a crucial role in how content that becomes evidence is
created, preserved, collected and turned over to the appropriate
authorities.”
According to Ms Logan, the situation is further complicated by
the lack of established standards for e-discovery.
“There is currently no clear model for e-discovery,” she said.
“It really is down to the individual organisation to decide on how
to proceed in conjunction with its legal counsel. Counsel must
monitor the changing legal landscape and provide the best possible
advice to the IT organisation about how to manage its assets and
define its processes for regulatory and legal purposes.”
To help reduce the costs and risks associated with e-discovery,
Ms Logan advised that IT departments should:
- Be proactive in creating good compliance practices. Having the
kinds of compliance processes that regulators, auditors and lawyers
expect will make investigations and discovery actions easier and
less costly.
- Work with your legal and compliance colleagues, and use records
management programs to reduce the overall amount of discoverable
material. By evaluating documents for regulatory, legal or business
continuity purposes, and making the appropriate decisions about
them, companies will decrease the amount of information that they
hold, streamlining the discovery process.
- Conduct an inventory of all IT assets. Include information
assets, storage devices, backup devices and off-site storage.
- Document previous discovery actions and debrief with counsel
after each one. Use this information to create repeatable
procedures. In certain industries, the IT organisation may even
want to consider creating special positions for this purpose.
- Familiarise yourself with the e-discovery vendor landscape. It
is growing and confused, with the usual characteristics of early
stage markets (that is, players from diverse and often marginally
relevant segments claiming expertise in the area). There are only a
handful of players that provide end-to-end discovery services.
- IT managers should work with the legal department to understand
how much they are spending on discovery, who is providing services
to them and how they are evaluating their options. The IT
department is best equipped to help the legal department deal with
the many technical issues surrounding e-discovery.
