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If your company is sued and needs to provide documents during an electronic discovery request, you are most likely not prepared, according to a survey released on Wednesday.
The survey commissioned by Contoural Inc, a data and storage consulting company, and Osterman Research indicated that 69 per cent of medium and large enterprises are not prepared for handling e-discovery requests for data such as e-mail archives. Additionally, only six per cent of the more than 100 IT managers surveyed said they could immediately and confidently handle potential e-discovery.
Late last year, the U.S. amended its Federal Rules of Civil Procedure to require that parties in a legal dispute bring up and agree upon e-discovery issues at the beginning of proceedings. These could include the file format of documents, how documents should be preserved and who has access to them. The rules could apply to any Canadian branch office of a U.S. firm, or any Canadian enterprise that deals with the States.
“We’re seeing a lot of organizations that just don’t know what they have, they don’t know where it is, and they don’t have an appropriate process for finding it,” Mark Diamond, CEO and president of Contoural, said. “Many companies are not clear on their retention policies and the ones that are often have policies that drive the wrong type of system, leading to a very difficult, costly, and often ineffective process.”
Michael O’Shea, president of the Barrie, Ont.-based consulting firm The Information Professionals, was unsurprised at the survey results and said that the lack of electronic record systems leads to unstructured data.
“Whether it’s practical materials, word documents, or any other type of data, it is not identifiable by a classification system that allows them to quickly identify a subject through e-discovery,” O’Shea said. “So, companies have a myriad of ways to do this and this creates a problem in that there is no standard nomenclature or taxonomy for naming the records and ultimately trying to locate them.”
For enterprises that want to get prepared, the solution for getting becoming litigation-ready in this area can vary depending on the consultant you talk with.
“The No. 1 thing companies can do is put together a comprehensive, real-world, effective, enterprise document retention policy in place, which includes good litigation hold processes,” Diamond said. “But companies also need clear, consistent and simpler policies, because once they have that in place, it’s easier to apply a tool to help solve it.”
But other consulting firms stress the need to first develop a cohesive plan that stretches across every department in the company.
“To get a major corporation ready, it has to be the combination of multiple departments, working together from a requirements perspective and also trying to get IT budget allocated to it,” Jennifer Baker, managing director of Navigant Consulting, said. “[E-discovery] really spans all every department – legal, compliance, records management – so we go in and get everybody together, understand what the cross needs are, and get all departments on the same page.”
Baker cited a recent example at a financial institution where its multiple departments were all trying to create a searching tool to do the same function. But she said because the IT department had different resources for each one, they didn’t notice the overlap.
O’Shea, while agreeing on the need for a plan of action, said that a solid document management system has to come first.
“I can create standard taxonomies for the process, but without a good, robust document management system, it’s still going to be a problem,” O’Shea said. “You can create a plan where you get rid of records at a certain time, but if IT has to go in, look for them and delete the files manually, it’s really a tough job. So, you need something that will handle all records on all media first, and then apply all those policies and procedures equally across it.”
According to the survey, the blame for the lack of readiness can be attributed to a lack of inter-departmental communication.
The researchers found a distinct gap between enterprise IT and legal departments, with only 9 per cent of IT managers indicating that legal had provided clear guidance and budgets for e-discovery. In addition, 40 per cent claimed they received no guidance on supporting e-discovery requirements.
“Everybody’s trying to do their own thing, and when it comes to legal and IT, there is a communication issue, like doctors talking to laymen,” Baker said. “Both legal and IT have their own languages, so legal may think their asking for something, but when they get it, it’s not what they expected.”
Baker said that budgeting issues between the two departments are also a cause for concern.
“Legal gets their budgets when there is a crisis situation, and it’s not really a budget, it’s really just overruns,” Baker said. “So you can imagine, legal IT budgets per say are extremely small, making it very difficult for them to make major planes associated with [e-discovery].”
But O’Shea argues that IT departments are the last people that should be blamed for being unprepared. He said that IT is paid to take backups and archive the system so the network will run at an acceptable speed.
“The legal department or the corporate secretary should be saying to IT, ‘here’s what we want you to do, now make it happen,’” O’Shea said. “It’s not IT’s job to figure out those decisions.”
Despite the legal-IT blame game, Diamond said that this is an issue which affects every department in the enterprise. He advises enterprises to create a new role called a “data administrator,” which would act as a sort of mediator.
“This is somebody that either works in IT or records management and is responsible for compliance, legal, end-user and business requirements of the data,” Diamond said. “The data administrator then works with storage and IT to make sure that the data is being managed appropriately.”
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