Article

Electronic Discovery Pushes Lawyers To Think Differently

June 04, 2007

By Olivia Clarke

Scott A. Carlson saw electronic discovery issues slowly engulf his entire litigation practice. The electronic discovery issues were arising with increasing frequency, and he was quickly becoming the "go-to" person on this area within his own firm. It eventually began taking up all of his time.

With a bachelor's degree in computer science and mathematics and experience as a software engineer, he founded Seyfarth Shaw's e-discovery practice in 2003 and today works almost exclusively with electronic discovery issues.

"If you don't understand the technology, I don't think you can give good advice to your clients," said Carlson, partner and co-chair of the e-discovery practice. "E-discovery has been in every case for a long time, but it just wasn't raised very often. Now we have to talk about it, and we should talk about it."

Amendments to the Federal Rules of Civil Procedure involving electronic discovery went into effect Dec. 1, 2006. Over the last six months, most law firms have tried to educate their lawyers on what the amendments require, and some firms have created internal groups to help wade through the changes.

Outside technology and consulting companies get called upon more often to handle the collection and processing of electronically stored information.

"For a long time, lawyers were working out discovery issues in the courtroom hallway with a handshake," said Dave Skowron, litigation technology project manager at McDermott Will & Emery. "What we are seeing now is they've gotten a lot more formal. They are bringing in technical people with them." Facing new challenges Sonya D. Naar describes the amendments as a "neon sign reminding people" that electronic discovery must be done.

In a general sense, the Rules already addressed the discovery of electronic information, but the amendments spell it out more specifically and address the form of the production, said Naar, a partner in the litigation practice at DLA Piper. The amendments say it must be discussed up-front.

"What often would happen is parties to a case would say, 'if you don't bring [electronic discovery] up, we won't bring it up. We will produce everything on paper,"' she said. "The courts are saying you can't do that."

Because of the amendments to the Rules and the recent emphasis on electronic discovery, she now spends more time than she had in the past counseling clients on such issues as how to retain records and how to be prepared to respond to discovery requests so that a piece of litigation does not "turn into a fire drill concerning the company's information," she said.

"[Today] if you don't follow the Rules there will be consequences," Naar said. "If you looked at the decisions the courts have come down with, they look not just to the client and whether the client did something incorrectly. They are looking also at the outside lawyer and whether the outside lawyer probed the client and made sure the client understood what needed to be done."

In the past, lawyers who stressed the importance of electronic discovery did not receive a huge amount of attention, said George Socha, president of Minnesota-based Socha Consulting LLC, which helps providers and consumers handle electronic discovery issues.

But today, he said, "Those lawyers are discovering that everyone wants a place on their dance card. For the first time, they are finding they are in demand."

The amendments force lawyers to become more familiar with their clients' electronic information systems, said Ken Withers, director of judicial education at The Sedona Conference, a nonprofit, nonpartisan research and educational institute dealing with law and policy.

A client's lawyers will need to meet with opposing counsel under Rule 26(f) to talk about what they did to preserve the information and what will be done if the information is requested, Withers said.

"Lawyers should not jump to the conclusion in every case that they must hire a computer forensic expert," Withers said. "I'm finding that many are panicking and thinking they must do that. There are certainly a large number of consultants and vendors who may be playing off those fears."

Lawyers cannot assume their cases don't involve electronic discovery, he said.

"Every piece of paper was probably generated from a computer or printer and is based on some electronic file," he said. "Even phone calls and conversations may have an electronic root that could be relevant to the facts of the case." The volume of electronic discovery means the usual model of new associates sifting through documents for relevancy and privilege is economically impossible, Withers said.

"No client will stand for it and the accuracy is horrible," he said.

But law firms historically have resisted introducing technology tools into the document review process, he said.

"But we are going to have to take a cold, hard look at the economics of the practice of law," Withers said. "This means convincing a lot of people who have distrusted technology that they can get rid of quill pens and green visors and take that leap of faith that a search engine can plow through that e-mail much more efficiently than they ever will be able to do."

The collection phase can be difficult because clients often want to use their internal resources as a cost-saving measure, but the cheapest option may be the least experienced person in the company's technology department, Skowron said. Even if this person is qualified, he or she may not be the best person to testify, he said.

Most lawyers understand what they have to do, but the real issue involves learning how to do it, said Geoffrey Vance, a McDermott partner and member of the firm's trial department. Lawyers must learn how to locate their client's electronically stored information, and whether it's been preserved correctly and not destroyed by automatic purging.

Vance said he has concerns about revised Rule 26(b)(2), which states, "[a] party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost."

"This leaves parties between a rock and a hard place," he said. "On the one hand, litigants are required to preserve data likely to be relevant to the claims and defenses in a dispute. On the other hand, information that is 'not reasonably accessible' generally cannot be located, retrieved, and searched without spending a great deal of time and money."

Vance questions how a party can determine if it should preserve the information without first spending the money and going through the trouble of gathering it.

"Some people are concerned that the rule provides an incentive for parties to 'make' information not reasonably accessible for the sole purpose of hiding information for discovery," Vance said. "I do not share this concern. The rules provide judges with plenty of tools to punish parties who make the poor decision to manipulate their computer systems in order to bury relevant information."

Steven M. Puiszis, a business litigation partner at Hinshaw & Culbertson and a member of the firm's electronic discovery committee, said it is much more difficult to handle electronic discovery issues, yet courts seem to be posing a higher burden and standard than the traditional world of paper discovery.

"The challenge I see is how to handle some of the rules regarding electronic discovery without making the case so costly that it can't be defended," said Puiszis, who is also the president of the Illinois Association of Defense Trial Counsel. "If electronic discovery gets abused, it's the single biggest threat to our jury trial system.

"What I am seeing more and more, especially in federal court, is the use of discovery rules almost as a game of Gotcha. We will ask for something knowing it is difficult to produce or ask for something we know has been destroyed. It's already been destroyed pursuant to a document destruction policy before anyone had reasonable notice that litigation was likely to occur. Then the other side will accuse you of destroying information."

In the past, electronic discovery issues just weren't raised very often, said Carlson, from Seyfarth Shaw. A client may have realized in the middle of a case that it should have preserved certain e-mails. But the client and the lawyer didn't want to "wake a sleeping bear" and show that it didn't preserve that information.

Today, the expectation has been set that this conversation needs to occur at the beginning -- a practice Carlson said he had already been doing.

"I saw great value in saying to the other side, 'this is what we are doing, and more importantly than what we are doing, this is not what we are doing. If you have a problem with that, let's argue it now instead of making the same argument two years later,"' he said. "There is really no great incentive to postpone that argument."

Tom Allman, senior counsel at Mayer, Brown, Rowe & Maw and former general counsel for BASF Corporation, said one argument is that the amendments may have imposed some difficult requirements too early in the case -- before the exact issues and people involved are identified.

Allman, who co-chairs the Lawyers for Civil Justice e-discovery committee, has been an active supporter of the rule changes and testified at the Civil Rules committee hearings. He has also written articles from the point of view of the corporate community. He recommends that the courts respect that the parties will change their litigation holds as the case continues.

"All you can do at the beginning of a lawsuit is take your best shot," Allman said. "Over time you are going to learn more and you should expand and change the litigation hold. The assessment should be whether over time you took the reasonable steps to deal with the problems as the litigation hold expands." Creating a team In an effort to get a handle on the new amendments, many firms created practices or task forces to educate their lawyers and work with their clients.”

In addition to providing internal education, Carlson said, his firm's e-discovery practice has two components.

On the consulting side, it helps clients establish a process for handling electronically stored information and tries to create more of a "marriage between the IT and law departments," he said. It also helps with litigation readiness by, for example, knowing ahead of time how the client is going to preserve certain information and what objections may be made.

For example, the company may create a new payroll system and wants to know when or if it should get rid of the old data. If the company decides to keep the information, should it be stored in a way that it can later be accessed?

On the litigation side, members of the e-discovery practice help the firm's other lawyers develop a plan for dealing with electronic discovery. This helps those other lawyers remain focused on the merits of the case, he said. Once they form a plan, then the e-discovery lawyers generally step away from the case until they are needed later.

Levenfeld Pearlstein announced May 7 that it formed an Electronically Stored Information Task Force in response to the legal developments regarding electronic data. The task force delivers data security and risk management solutions for its clients to assist them with managing their electronic data before litigation arises, according to the firm.

"General counsel at a number of the world's largest companies have identified e-discovery as the single greatest threat to their organization, and the volume of electronic data used in business will only continue to increase," Chris Griesmeyer, who co-founded the task force, said in a press release. "There is a critical need for skilled, efficient counsel in the management of this information for both litigation and transactional purposes."

Puiszis said his law firm needed to make sure its lawyers receive additional training on electronic discovery, especially those involved in federal litigation. The firm also created an electronic discovery committee that consists of lawyers and members of the firm's technology staff, he said.

The committee, for example, helped a client do a risk assessment of its electronic systems. In another example, a client with a very decentralized structure asked for help with the process of putting in place litigation holds. The committee also provides training to clients' employees about requirements, he said.

Derek Krabill joined McDermott in November as the firm's electronically stored information (ESI) consultant. He helps the firm understand its clients' technology and documents the e-discovery choices made during a case. He also helps the firm develop a plan for preservation and collection.

"I think it's a matter of getting them up to speed," Krabill said. "In my experience, law firms tend to operate under a model that was created in the paper world.

"The world has kind of changed with electronic discovery. The model that law firms are using has been slow to change with it. I am speaking generally and not specifically about McDermott. I have seen it has taken a little while for attorneys who manage cases that came of age in the paper world to realize that that model doesn't work anymore."

Actions like data preservation mean making sure potential evidence does not get lost, and mistakes could be more pronounced in the hands of an inexperienced person, he said.

"[McDermott] is the first firm I'm aware of that created this position," Krabill said. "I do think the trend is moving in this direction. At least major firms will need to bring on someone internally in that consulting role." Outside help In 2005, the estimated commercial electronic data discovery revenues were nearly $1.3 billion, up 56 percent from 2004, according to Socha Consulting's latest released data. The company estimated that the market would grow by about 37 percent from 2005 to 2006 and 29 percent from 2007 to 2008 -- based on consumer expectations.

"I would guess that there are between 500 and 1,000 organizations out there that purport to offer some form of e-discovery service or software," Socha said. "You need to figure out what your needs are before you can even begin to figure out who is best suited to meet those needs."

Socha Consulting ranked the top electronic discovery service providers based on such categories as, experience and reputation, and types of services. Among the top five in 2005 was Fios, Inc. and ZANTAZ, Inc.

Lawyers and their clients must think ahead and understand what needs to be preserved, said Bob Little, vice president of product marketing at ZANTAZ -- a provider of software and solutions for electronic discovery issues.

"If they spend the time up-front creating a policy, when it comes time for the meet and confer they are well ahead of the game," he said. "They can talk about what they have and what they don't have. That is a big advantage. Now you can spend more time on the merits of the case."

Many clients contact ZANTAZ at the reactive stage, but that is often a more costly and time-intensive decision, Little said. "If I produce evidence for one jurisdiction and don't produce it in another, I'm really putting myself at risk," Little said. "I didn't respond to the requests in the same way. Having a system and a policy that you thought about in the past, I think, is a critical thing."

Challenges exist when dealing with the volume of data and the different ways to filter that particular data, said David Meadows, director in the discovery services practice at Navigant Consulting, Inc. -- a specialized independent consulting firm that among its services provides project management for the discovery process.

Navigant Consulting, for example, works with clients to locate, collect, and produce electronic and hard-copy documents in response to discovery requests and government investigations.

"What generally happens is both law firms and corporate clients don't have the people to dedicate to the process and to adequately and efficiently manage it," Meadows said. "We make sure everything moves through and everything is quality-controlled."

Many law firms and corporations enter into electronic discovery discussions very early in the process, so they either need to be prepared or need to get prepared really fast, said Mary Mack, technology counsel at Fios, which provides end-to-end electronic discovery services.

The amendments accelerated the timeline for handling electronic discovery and dramatically expanded the definition of what is discoverable, Mack said.

There are people who are highly skilled in this area and don't have the time to handle every single case and do every single case well, Mack said. And then there are those who have absolutely no idea and engage us because they hope we will help them through these complex issues, she said.

"This entire electronic discovery industry is still a very young industry," Socha said. "The first service providers to focus on electronic discovery only started up 20 years ago. For many years there was only one or two out there. You have this combination of an area that attorneys aren't familiar with and aren't used to dealing with, combined with a lack of consequences in how to deal with it. There's a lot of uncertainty."
 

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