By Shawnna Childress

Any doctor will tell you that the best way to deal with a serious disease is to act early, consider options and develop a plan before it is too late. Similarly, for too many companies, electronic discovery is a process that starts after litigation has begun or after an investigation has been initiated. Where Henry Bracton once said, “An ounce of prevention is worth a pound of cure,” many of the major factors related to eDiscovery, can best be controlled before a matter begins. Our experience at Encore has been that companies can rein in their eDiscovery costs through the early development of a proactive, strategic approach that incorporates experience and knowledge, good process and state-of-the-art technology.

The recent update to the Federal Rules of Civil Procedure includes a new acronym that many are now hearing for the first time: ESI. ESI stands for “electronically-stored information.” Basically, ESI is any electronic information within your environment; that includes e-mail and electronic files from sources such as Microsoft Outlook, IBM Lotus Notes, Novell GroupWise, proprietary e-mail systems, instant messages (chatting), text messages, Word, Excel, PowerPoint, phone messages, video recordings, and more. It is important to understand what comprises ESI and take proactive control of it throughout its lifecycle.

Issues that will ultimately become eDiscovery problems begin when ESI is created. What format is being used? How big are the files? How many are there? How accessible are the documents? What are the document retention (and destruction) policies? Where are the documents stored? Most company employees do not realize that the documents they create today may be party to litigation next year, or ten years from now.

Once a document is created, there are a number of additional issues that affect it during its lifecycle, such as the formats of ESI, file size, number of documents, accessibility; prevalence of a document management or content management system, regulatory requirements, legacy systems, and, lastly, metadata (data that is attached to electronic documents, e.g. date and time stamp on e-mails).

Many companies are finding themselves in situations where the evaluation and discovery of ESI has become a part of every case. Many are finding that a forensically sound data collection is a critical aspect of any document request, where Data Retention, Preservation, Chain of Custody and Production are all key components. Not only are the Federal Courts demanding that processes and procedures be in place (per the new FRCP), but errors in this area can be costly to fix, and even more costly if not fixed, to wit:

nZubulake v. UBS Warburg 217 F.R.D. 309 (S.D.N.Y.) 2003

nColeman v. Morgan Stanley Extra LEXIS 94 (Fla. Cir. Ct. Mar. 23, 2005)

Even beyond the case law, there can be enormous monetary consequences if eDiscovery is not properly managed from the start. From the minuscule (but scalable!) costs of making extra copies to the obviously larger costs of switching hosting vendors mid-review, the decisions one makes throughout the case can add up to large dollars at the end.

However, the biggest single factor related to eDiscovery cost is the number of documents that must be reviewed. A typical Fortune 500 company reviews, on average, approximately 100 gigabytes per month of electronic data. This represents between 9 million and 12 million pages per year. More and more general counsel are starting to ask questions like: Are we capturing all the requested documents? Are we overburdening outside counsel with data dumps that are over inclusive? Why is our review bill growing so much every year?

Many companies are now looking into cost-effective tools to provide the means to be timely and inclusive on responses without overburdening outside counsel with data dumps that usually equate to vast quantities of duplicates or grossly irrelevant documents.

For example, tools now exist to manage duplicates and facilitate native file review, while keeping metadata in tact. Good review tools handle amazingly complicated keyword searches. “Concept-based” or “pattern-based” search tools” remove grossly unresponsive documents and organize others to optimize review by legal teams. At Encore, we understand that a heavy dose of early technology can prevent major procedures later on and are committed to understanding and helping our clients implement cost saving tools wherever possible.

As stated from the beginning, reining in eDiscovery costs should begin before litigation even arises; this is called “Litigation Readiness.” The Litigation Readiness process includes scoping systems and data that are potentially relevant to litigation, minimizing exposure from unnecessary data, knowing where and what backup tapes you have. putting an electronic records retention program in place, creating Meet and Confer Profiles and issuing a 30(b)(6) issue/response FAQ’s.

Litigation Readiness means having a team in place that creates and implements your best practices, rules of engagement, checklists and tracking for monitoring compliance. This team should also consider system settings that purge, archive, overwrite, and prompt users to delete data that is outside the scope.

The advantages of a Litigation Readiness team becomes apparent when a company is preparing for a Meet and Confer and 16(b) Conference in the limited amount of preparation time mandated by the new FRCP. At a “Meet and Confer,” a company must disclose what (data) it has and where it is located, even if it is inaccessible. Unprepared or under-prepared companies may face a request for production for everything–resulting in tremendous cost. Always having an up-to-date topography (or map) of your systems and where all electronic information is stored, including backup tapes (even if they are in a closet in Timbuktu) is worthwhile. Having to find this information in the middle of a case will cost much more, even if this process goes smoothly.

A Litigation Readiness process should also limit–but cannot eliminate–the cost issues related to the collection of data. However, some companies have found cost-saving techniques specific to the collection process. These include employee self-collection and self-forensic imaging. However, there is concern that the employee may be either under-inclusive or over-inclusive, and the method used could change metadata. Companies involved in “bet the company” cases may wish to bring in a third party to ensure defensibility, leaving self-collection to more “routine” matters.

Since more than half the costs of a typical eDiscovery project is in document review, to truly rein in eDiscovery costs we must save time and money in that area. Initially, the best plan is to put together a streamlined document review workflow, including an efficient tracking method with reports to help monitor and optimize the review team.  Next, data culling and minimization tools should be used to reduce the size of the review set. These tools include de-duplication, keyword searching, thesaurus, taxonomy, ontology, clustering, Bayesian Classifiers, concept-related tools, indexing, and more. While these tools can be complicated to understand, experienced professionals can talk you through the issues to ensure a defensible culling of discovery documents.

An additional issue is the file format in which documents are reviewed.  Though some cases are well-suited for a native file review (reducing the number of documents that need to be processed) some are better handled by converting all the data to a standard format, such as tiff or pdf, which can be quicker. Other possibilities include a hybrid solution where everything is reviewed in tiff, except for spreadsheets and presentations that are better reviewed in their native formats.

There are also many document hosting services from which to choose. We recommend looking at as many tools as possible to see which one fits the specific case and your style of review. Many companies make frequent upgrades to their products and services, so a solution that may not have been ideal a couple years ago may now be a smash hit!

At Encore, we believe in using best-of-breed technology (actually, best-for-case technology) and assist you in narrowing down your choices. We have already negotiated prices with many vendors and understand the strengths and weaknesses of their products and services. While a careful selection process can be time consuming and confusing at the outset, it is worthwhile in the long haul since you may have to live with the tool for months or even years if the case is big.

Dealing with ESI from a plethora of custodians, with numerous different file types, from a variety of different vendors with different software, with numerous keyword terms can add up to one big headache, especially with a hostile adversary. If left unchecked, these headaches can grow into something much worse. Like a good doctor, the legal team’s best bet is to act early when most issues can be controlled. A proactive approach to eDiscovery–with plans developed at the outset of litigation or even sooner–will save you today’s troubles and assist with reining in your eDiscovery costs.