Part of the Solution

Idealistic musings about eDiscovery

Tag Archives: ESI

Information Governance vs. eDiscovery

I have a new post up on Greg Buckles’ eDJ Blog on the intersection of information governance and eDiscovery.

Thanks, Greg, for the forum!

Why Hasn’t TAR Caught On? Look In The Mirror.

Oh, this is good. If you haven’t already signed up for the ALM Network (it’s free, as is most of their content), it’s worth doing so just to read this post (first of a two-part series) from Geoffrey Vance on Legaltech News. It pins the failure of acceptance of technology-assisted review (TAR) right where it belongs: on attorneys who refuse to get with the program.

As I headed home, I asked myself, how is it—in a world in which we rely on predictive technology to book our travel plans, decide which songs to download and even determine who might be the most compatible on a date—that most legal professionals do not use predictive technology in our everyday client-serving lives?

I’ve been to dozens of panel discussions and CLE events specifically focused on using technology to assist and improve the discovery and litigation processes.  How can it possibly be—after what must be millions of hours of talk, including discussions about a next generation of TAR—that we haven’t really even walked the first-generation TAR walk?

Geoffrey asks why attorneys won’t get with the program. In a comment to the post, John Tredennick of Catalyst lays out the somewhat embarrassing answer:

Aside from the fact that it is new (which is tough for our profession), there is the point that TAR 2.0 can cut reviews by 90% or more (TAR 1.0 isn‘t as effective). That means a lot of billable work goes out the window. The legal industry (lawyers and review companies) live and die by the billable hour. When new technology threatens to reduce review billables by a substantial amount, are we surprised that it isn‘t embraced? This technology is driven by the corporate counsel, who are paying the discovery bills. As they catch on, and more systems move toward TAR 2.0 simplicity and flexibility, you will see the practice become standard for every review.

Especially with respect to his last sentence, I hope John is right.

Can You Be a “Salesman” and Still Be Part of the Solution?

I had a job interview by telephone last week. The position’s job posting read as though it had been lifted from my career bucket list; everything I want my career to be, and all the experience I have obtained, meshed perfectly with the contents of the job description.

I knew, however, that there might be more here than meets the eye when, upon initial contact, the reviewer mentioned that in addition to everything listed on the job posting, this would be “a true sales position”. I love to evangelize and identify solutions. I HATE to “sell”.

I thought the interview went fairly well (at least, for purposes of demonstrating my expertise). The interviewer disagreed; he even told me so during the call, saying that he didn’t hear me steering the conversation forcefully enough to specific solutions that could be presented. (Never mind the fact that the list of solutions this company represents is outdated and incomplete on their website, so I wasn’t sure what to recommend. The message was clear: I wasn’t SELLING hard enough.)

This brings me to a recent post on LinkedIn by Damian A. Durrant of Catalyst, entitled “More solving, less ‘selling'”. He believes as I do: don’t sell, SOLVE.

Sales is push, it says I am ramming something, anything, down your throat lubricated with lunch whether you need it or not. Unpleasant. Consulting is pull, it says I believe I have something that will help you, let’s talk about it. Better.

I have been a salesman. I have been a consultant. I much prefer the latter, as I am working to provide solutions. A salesman will make his numbers for the month. A solution provider will be someone the client goes back to again and again, because the provider makes the client’s job easier and less expensive. It’s the difference between making a one-time sale, and building a true relationship.

The e-discovery industry needs to shed itself of its copying and scanning “salesy” origins and start behaving more like the advisory firms, albeit more creatively, more nimbly and without the hefty billing rates.

Nicely said, Damian. Nicely said indeed.

I highly recommend you read his message.

It’s Worth The Reminder

If you have done one of these published “Q&A” things before, as I have, you know that the author not only provides the A, but also the Q. The author gets to emphasize exactly what she wants to emphasize, in exactly the way she wants to emphasize it. That being said, Gabriela Baron reminds us of some important ethical points on the subject of technology-assisted review that need emphasizing: specifically, that the ethical attorney must develop at least some competence with the technology:

Comment 8 to ABA Model Rule of Professional Conduct 1.1 requires lawyers to ‘keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.’ Lawyers need not become statisticians to meet this duty, but they must understand the technology well enough to oversee its proper use.

Her blog post is a pretty good, succinct summary, and one that bears being used to refresh our memory.

Chain Chain Chain …

Here’s a worthy reminder from Amy Bowser-Rollins of the need to maintain chain of custody logs while collecting eDiscovery. With all the emphasis these days on TAR, it’s nice to be reminded of the fundamentals every once in a while.

“The man who complains about the way the ball bounces is likely the one who dropped it.” – Lou Holtz

If ESI Isn’t Inaccessible, Better Speak Up

I don’t know if I’m more impressed that the author’s name is “Gary Discovery”, or that the ESI_logo[1]wisdom contained in his note is so cogent, but this author cites a new Pennsylvania case in which the judge presumed ESI to be inaccessible where neither party contended otherwise. In this case, the result was that the costs of production shifted to the requesting party.

The requesting party should submit to the court that the ESI sought is accessible to avoid both a presumption of inaccessibility and the possibility of cost-shifting.  Requesting parties should not leave it up to the producing party to bear the burden of showing that the ESI is inaccessible because the courts are now willing to presume this finding if neither party contends otherwise.

The Terminal Legal Hold: Pippins v. KPMG

I came up with the term “terminal legal hold” to describe the situation faced by an enterprise which can’t bring itself to delete obsolete data, lest any of that data be potentially responsive in future litigation and the organization’s document destruction policy couldn’t pass the Zubulake v. UBS Warburg “systematic and repeatable” test. The enterprise fears sanctions so greatly that they never delete anything. For obvious reasons, this isn’t a best practice.

A New York federal court, however, has now tacitly approved of — indeed, ordered — the “terminal legal hold”.

Pippins v. KPMG is being litigated before Magistrate Judge James L. Cott, in the Southern District of New York. KPMG is being sued by two as-yet-uncertified classes of audit associates who claim that they were misclassified as exempt employees under the Fair Labor Standards Act, and therefore are owed overtime pay. There are as many as 9,000 potential class members, and thus as many as 9,000 hard drives which they may have used. Counsel for the two parties could not agree on the sampling criteria or the number of drives to include in the sample. KPMG asserted that the cost to preserve the more than 2,500 drives currently in its possession was more than $1.5 million, and proposed that for the sake of proportionality, one hundred randomly-selected hard drives should be preserved as the sample set.

On October 11, Judge Cott ruled that KPMG has to preserve the hard drive of every potential class member. Because the district judge had not yet ruled on class certification, every auditor was a potential plaintiff and therefore a “key player” as defined in Zubulake v. UBS Warburg. “With so many unknowns involved at this stage in the litigation,” Judge Cott wrote, “permitting KPMG to destroy the hard drives is simply not appropriate at this time.”

KPMG filed an objection brief to the district judge on October 28, writing, “The ‘key player’ analysis has never been extended to require the preservation of ESI of every potential member of a putative class or proposed FLSA collective action.” Also:

[N]ever has it been held that an employer on notice of a putative class action or proposed collective must impose a ‘litigation hold’ and preserve ESI (among other materials) for every current or former employee who theoretically could bring an individual action in the future. If companies were required to retain documents whenever there is a mere possibility that they could be sued, they effectively would face a perpetual duty to preserve and thus would be unable to implement document-retention policies.

In other words: a terminal legal hold. Leonard Deutchman referred to this today as “the perfect e-discovery storm”:

At virtually the earliest moment in the litigation, the plaintiffs require the defendant to spend a remarkable amount of money simply on preservation — the cost to search, review and produce e-discovery has not yet even been discussed. … If the legal claims are insufficient or the class uncertifiable, millions will have been wasted in preservation; if, however, the allegations are shown to be strong and the class intact but the drives are not preserved, the defendant may then have been allowed to destroy, or let be destroyed, the mythical smoking gun ESI. Because the cost of preservation is so high, the issue of cost has arisen earlier than it usually does (when calculating the costs of processing, searching and production) — so early that neither side has the facts to support its position. Thus, the potential for gross injustice lies in taking either position.

This led to the filing of an amicus brief by the United States Chamber of Commerce on November 8, arguing that the magistrate judge got it wrong. “’Key players’ … could not, and does not, embrace every member of a putative class of thousands. … Put bluntly: no absent member of a properly certified class or non-party to a properly certified collective action should be a ‘key player.'”

Judge Cott may have gotten the “key player” analysis wrong, but Deutchman argues that the judge otherwise made the right call:

As a legal matter, and as a way of governing e-discovery practice, the court was wise to enforce the rules as they are by denying both sides’ motions, advising the defendant to allow the plaintiffs to examine the sample drives and letting the parties then act in their enlightened self-interest. In so doing, the court instructs those who follow to act as the defendant should have rather than as it did. Cooperation generally works when the parties act in their enlightened self-interest. By interpreting the rules properly, the court “enlightened” the defendant as to what its self-interest truly was. Presumably it, and those reading the opinion, will now know how to act.

My take on this: Judges are typically referees, and should not take it upon themselves to rescue parties from their own mistakes. However, every rule has an exception, and this strikes me as a valid one.

KPMG said the cost of preserving each hard drive would cost them $600; multiply by 9,000 hard drives, and they will have spent $5.4 million before processing a single file. Even if KPMG should have made stronger efforts at cooperation with respect to sampling of the preserved hard drives (and, in my opinion, they should have), Judge Cott’s decision sets a dangerous precedent in favor of dilatory plaintiffs who would rather win their case through expense and attrition than on the merits.

While as a commentator I’d like to be less cynical and believe that most plaintiffs want their cases litigated fairly, my experience as a defense litigator has taught me otherwise. If a savvy plaintiff’s lawyer sees an opportunity to make a case so expensive for the defendant that the defendant will gladly settle, regardless of culpability, the lawyer will gladly do so. The higher the potential expense, the greater will be the amount of the settlement. If Judge Cott’s order is allowed to stand, the mere threat of class certification would be enough to cause large defendants to reach for their checkbooks rather than begin the expensive task of preserving hard drives that might contain evidence that might be of use in some unspecified, unfiled, and unthreatened future litigation. The net result? Cases won’t be tried on the merits, and no enterprise will delete anything ever again.

I would have preferred Judge Cott force the parties to agree on a sampling protocol, appointing a special master if need be, and allowing KPMG to manage its own preservation of hard drives upon pain of sanctions if they mess it up (the cost of which , in all likelihood, would be far less than the cost of preserving all 9,000 hard drives).

(Update 1/9/12: Law.com’s Evan Koblentz reports this morning that the parties may reach a resolution on this issue.)

Legal Hold Notifications: Is E-Mail Good Enough?

An e-mail exchange this morning with one of our product managers has got me thinking … and that’s always dangerous.

Most enterprises that issue legal hold notifications to their custodian employees use good ol’ e-mail. The hold notification gets pasted into the body of the e-mail, and off it goes, (theoretically) to the recipient. Perhaps the e-mail was sent with a return receipt requested; and if the recipient is feeling generous, that receipt just might come back to prove that the message was received. As for whether the notification ever gets read? Well, we’ll just have to assume the best, won’t we?

Problem is, this isn’t a very practical solution. First, let’s look at the logistics. E-mails are not only subject to one-click deletion, but (at least in Microsoft Outlook and Exchange) can also be subject to custom routing rules. A user with the appropriate software permissions can easily create a rule to route all e-mails from, say, the Office of the General Counsel directly to the “Deleted Items” folder.

E-mail retention on the enterprise level also tends to be subject to shorter data preservation times than other types of electronic documents. If a custodian is on vacation when they get the e-mail, there is a possibility that the e-mail may not be there for download when the custodian gets back.

Finally, even if the e-mail is delivered in a timely manner and doesn’t get deleted, there’s no guarantee that the custodian will actually read it. And even if they do read it, they have the option (again, in Outlook; I don’t know about other systems) of denying the sender’s request to return a receipt.

The point of all this is that the enterprise remains vulnerable to “plausible deniability”. If a custodian can be shown to have read the hold notice, and they then proceed to violate it by spoliating evidence, the enterprise can likely protect itself from liability by arguing that in violating the hold notice, the custodian was acting outside the course and scope of their employment. Without that proof, the enterprise may remain firmly on the hook.

Now, the content of the hold notice itself is probably privileged from discovery under attorney-client privilege and attorney work produce privilege. However, the process of issuing that hold notice, and of obtaining proof of receipt, may not be privileged. In the recent case Cannata v. Wyndham Worldwide Corp., 2011 WL 3495987 (D. Nev. Aug. 10, 2011), the court held that the opposing party was entitled to know “what has actually happened in this case, i.e., when and to whom the litigation hold letter was given, what kinds and categories of ESI were included in defendant’s litigation hold letter, and what specific actions defendant’s employees were instructed to take to that end.” (Emphasis mine. I commend to you Dennis Kiker’s excellent discussion of the Cannata case at his blog.)

At Autonomy, our legal hold software notifies the custodian via e-mail that they have a message awaiting them from the GC’s office, and to click on an enclosed link. The link serves a form from our workflow management engine, completely independent from the e-mail, containing the language of the legal hold notification, and requiring an electronic signature as acknowledgment that the form has been received and read. This ensures that the custodian cannot claim, “I didn’t get the e-mailed notice; and if I did, I deleted it; and if I didn’t delete it, I didn’t read it, etc.,” as a way to shift liability for spoliation back onto the enterprise. To me, this seems a MUCH better and safer practice that is more likely to withstand judicial scrutiny. (This is my opinion, not influenced by anyone at Autonomy, and I firmly and personally believe what I have written here.)

The Zubulake V opinion (229 F.R.D. 422, 433 (S.D.N.Y. 2004)) set the standard quite plainly: ‘‘[A] party cannot reasonably be trusted to receive the ‘litigation hold’ instruction once and to fully comply with it without the active supervision of counsel.’’ So why do so many counsel continue to insist that an e-mail “blast” of hold notices is good enough? Food for thought …