Pre emptive eDiscovery StrategiesPre-emptive eDiscovery Strategies for Small, Medium and Large entities

Bill Tolsonf SDirector of Legal Solutions Marketing

Mimosa Systems Inc.

Copyright © 2009 Mimosa Systems, Inc. - Confidential

“Receiving a discovery request is like being pulled over for a broken headlight and h i f ll b d it h d ”having a full body cavity search done.”

U k CEOUnknown CEO

Discovery doesn’t have to beDiscovery doesn’t have to be traumatic or costly… if you proactively plan for it

Most Frequently Requested Record Types in Discoveryy

80%E il ( d tt h t )

49%

60%

80%

Database records

General office productivity documents

E-mail (and attachments)

29%

36%

41%

Telephone call recordings and other audio files

Financial statements

Invoices and other customer records

21%

25%

29%

Instant messages

Digital images

Telephone call recordings and other audio files

5%

16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Other

Video files

ESG Research Discovery Survey Nov 20074

Average Age of Data Requested During Discovery (General Counsel Survey)y ( y)

60%

48%

40%

50%

60%

15% 15% 15%20%

30%

40%

4% 4%

15% 15% 15%

0%

10%

Most data isless than 6months old

Most data isbetween 6 and12 months old

Most data isbetween 12

and 24 monthsold

Most data isbetween 24

and 36 monthsold

Most data ismore than 36months old

Don't know /refused to

answer

ESG Research Discovery Survey Nov 20075

ESI eDiscovery Trends:More Costly, More Complicatedy, p

The legal problem is immense for large, midsize and small companies:companies:Among midsize companies, 98% had between 1 and 20 $20-million lawsuits; the other 2% had between 21 and 50.58% of companies had between 1 and 50 new lawsuits in 2007.Almost 40% of the largest companies surveyed spent $5 million or more annually on litigation.

* Source: 2007 Fulbright & Jaworski Litigation Trends Survey

A growing body of case law and judgments affects IT:Victor Stanley Inc v Creative Pipe Inc 2008 WL 2221841 (D Md May 29Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D.Md. May 29, 2008) —risks of keyword searchHopson v. Mayor of Baltimore, 232 FRD 228 (D. Md. 2005) —parties ordered to create a reasonable discovery plan

eDiscovery is a Problem

The American Bar Association Digital Evidence Project and National Law Journal Report:National Law Journal Report:

Over 30 Billion emails are sent daily

Over 90% of ALL information is now electronic

Typical Fortune 500 company has 125 on going cases with at least 75%Typical Fortune 500 company has 125 on-going cases with at least 75% requiring electronic discovery

62% of companies surveyed doubt they can show their electronic records62% of companies surveyed doubt they can show their electronic records are accurate and reliable

The Federal Rules of Civil Procedure

The New FRCP Amendments..

Explicitly makes “electronically stored i f ti ” t f di bl d tinformation” a category of discoverable data

Mandates early meet-and-confer sessions

Provides “safe harbor” in the event of “good faith” destruction of discoverable data

Litigation Hold expectations

So, What is Discoverable and Subject to Litigation Holds?g

EmailAttachmentsFiles

Calendars

Contacts

Anything else?Task Lists

Specific Points in Time

File Attributes

Conversation Threads

Metadata

Backup Tapes

Major Risks Associated with ESI in Litigationg

Stopping system managed deletionsStopping deletion of potentially responsive Electronically Stored Information (ESI) by

lemployeesApplying a Litigation Hold

Inability to effectively filter ESI to determineInability to effectively filter ESI to determine responsiveness, or privilege

Not turning over all responsive ESINot turning over all responsive ESITurning over too much ESI

Major Costs Associated with ESI in Litigation

Searching for responsive ESI in the corporate i f t tinfrastructure

File ServersOn line Storage SystemsOn-line Storage SystemsFailover LocationsEmail ServersEmail ServersInstant Messaging ServersBackup TapesNetwork Share Drives

Major Costs Associated with ESI in Litigation

Searching for responsive ESI at the custodian l l

Custodian Workstations PDAs

level

Custodian LaptopsCD/DVDs

Cell PhonesiPods

USB Thumb DrivesExternal Hard disks

Digital CamerasPersonal Email AccountsHome PCsHome PCs

Challenges for eDiscovery

Managing Legal RiskLitigation Hold SpoliationLitigation Hold - SpoliationTurning over too much data – PrivilegeTurning over too little data – Adverse Inference

Managing Legal CostStopping deletions is costly to ensureStopping deletions is costly to ensureSlow eDiscovery response results in severe penalties and finesDisruptive data capture decreases employee productivityRestoration of backup tapes for searching is extremely costlyRestoration of backup tapes for searching is extremely costly

New eDiscovery Case Law

Best Buy Stores, L.P. v. Developers Diversified Realty Corp., 2007 WL 333987 (D Minn Feb 1 2007)333987 (D. Minn. Feb. 1, 2007) Backup tapes are not inaccessible: “Defendants offer no proof, aside from conclusory statements, about the cost to obtain documents from electronic archives. So this concern cannot shield the defendants from discovery here.”

Columbia Pictures Industries v. Bunnell, CV 06-1093 FMC (JCx), U.S. District Court for the Central District of California (May 2007)( y )Server transaction logs are discoverable: An issue addressed by the judge was whether requiring the defendants to preserve and produce the server log data was tantamount to forcing them to create new data, since the defendants' systems had

t t d th t f l b fnot created these types of logs before.

New eDiscovery Case Law

Goodbys Creek, LLC v. Arch Ins.., 2008 WL 4279693 (M.D. Fla. Sept. 15, 2008)Sept. 15, 2008)…in a reasonably usable form does not mean that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.

Metrokane, Inc. v. Built NY, Inc., 2008 WL 4185865 (S.D.N.Y. Sept. 3, 2008)Adverse Inference and Other Sanctions Warranted for Plaintiff's Failure to Produce Damaging Emails that were Eventually Produced by Third Party Magistrate Judge Michael H. Dolinger rejected Metrokane’s procedural defense, and concluded that BNY sufficiently demonstrated discovery misconduct by Metrokane and resulting prejudice. Accordingly, the court granted a variety of remedies including an adverse inference instructiongranted a variety of remedies, including an adverse inference instruction.

New eDiscovery Case Law

White v. Graceland Coll. Ctr. for Prof’l Dev. & Lifelong Learning, Inc., 2008 WL 3271924 (D. Kan. Aug. 7, 2008)Inc., 2008 WL 3271924 (D. Kan. Aug. 7, 2008)The Court finds that Defendants failed to produce the emails and attachments in either the form in which they are ordinarily maintained, or in a "reasonably usable form," as required by Rule 34(b)(2)(E)(ii). Defendants' conversion of the emails and attachments to PDF documents and production of the PDF documents in paper format does not comply with the option to produce them in a reasonable usable form.

Bright v. United Corp., 2008 WL 2971769 (V.I. July 22, 2008)Supermarket's Failure to Retain Video Surveillance Footage of Periods Preceding and Following Slip and Fall Incident "Shocks the Conscience of thePreceding and Following Slip and Fall Incident Shocks the Conscience of the Court" and Warrants Adverse Inference Instruction

The Cost of Review

"A recent study that appeared in Digital Discovery & e-Evidence showed that for a smaller case with 30Evidence showed that, for a smaller case with 30 gigabytes of data, manual review could cost $3.3 million. The study described how a more advanced electronic approach could reduce that cost by 89%, to less than $360,000. See 'Document Analytics Allow Attorneys to be Attorneys,' y y ,

(Chris Paskach and Vince Walden, DDEE, August 2005, page 10.)"

Challenges for eDiscovery – Manual Process

Manual Discovery is risky as well as time i d di ti tlconsuming and disruptive - costly

Responsive records can be anywhereImpossible to place a litigation hold quickly andImpossible to place a litigation hold quickly and completelyHow can you be sure all targeted employees have y g p ystopped deletions of potentially responsive content?

Did I find everything?

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Challenges for eDiscovery – Manual Process

Backup TapesExchange Dumpster

Email Boxes

CDs/DVDs

PDAsEmail Server

eDiscovery Order

`Custodian Workstations

File Server

Thumb Drives

MP3s/iPods

Digital Cameras

Share Drives

Challenges for eDiscovery – Reactive Solutions (Crawling)( g)

Reactive Discovery is risky, time consuming and di ti t th i f t tdisruptive to the infrastructure

Again, responsive records can be anywhereImpossible to place a litigation hold quickly andImpossible to place a litigation hold quickly and completelyReactive crawls and hard disk imaging is disruptive g g pto custodian productivity

Did I find everything?

21

Challenges for eDiscovery - Archiving

First generation archiving solutions don’t address the question What’s discoverable?the question – What s discoverable?

Incomplete capture of historical data If you don’t capture everything then yourIf you don t capture everything, then your litigation hold will be incompleteCumbersome and complicated eDiscoveryCumbersome and complicated eDiscovery

Doesn’t capture all discoverable dataDoesn t capture all discoverable data

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Proactive Archiving of all Discoverable Data

Advantages of proactive archiving for discovery l di ti liover manual discovery or reactive crawling

Ability to perform early case assessment – data is always at handalways at handPlace litigation holds immediatelyDisposition of records is automatically managedp y gData is single-instanced so only one copy existsArchive provides a data inventory for “meet and confer” sessionArchive provides a “Single Point of Discovery” for email and file system dataemail and file system data

DisadvantagesArchive storage requirements

But…How much of your tier one storage resources is beingHow much of your tier one storage resources is being consumed with PSTs and duplicates of office files?What's your real cost of manual or reactive ydiscovery?

The Biggest Argument Against Archiving from Corporate Legal…p g

“The more data we keep the bigger the chance it will be used against us in litigation”

Not necessarily the case…

Employees Keep Stuff No Matter

Employees will keep data for all kinds of reasonsEmployees will not adhere to retention policies

d t th i lon data they squirrel awayWith no centralized management, thousands of copies can exist for long periods of timecopies can exist…for long periods of time

All thi d i d i di tAll this does is drive up you discovery cost

Blanket Retention Policies –Unsafe Harbors

“We save everything until our mail server gets full – then we delete everything and start anew.”everything and start anew.

“We save everything for 30 (60 or 90) d d ’ h d bl ”days and we’ve never had a problem.”

“We gave up trying to figure outWe gave up trying to figure out individual retention rules and now keep everything for 10 (15 or 20) years.”

(202) 342-2550bsavarino@cohenmohr.com

Discovery Strategies for Small Entities

Control your organizations data – all of itKnow your infrastructureKnow what data is created and deletedBe able to lock it down quicklyBe able to lock it down quicklyJudges don’t care what you can afford

Get outside legal advice – legal advice is an insurance policy If a lawyer told you it wasinsurance policy. If a lawyer told you it was alright, then you are better off

Get that advice in writingg

Discovery Strategies for Small Entities

Create policies and proceduresCreate a litigation hold processCreate a eDiscovery processCreate a ESI retention policyCreate a ESI retention policyTest all of themTrain employees on all policiesTrain employees on all policiesAudit employee complianceAnd document everythingy g

Discovery Strategies for Medium and Large Entities

Control your organizations data – all of itThis includes video surveillanceEntrance/exit card accessPut a centrally controlled ESI archive in placePut a centrally controlled ESI archive in placeIf multinational, be aware of international data retention precautionsp

Get internal or external legal adviceg

Discovery Strategies for Medium and Large Entities

Inventory your data infrastructure What applications are used that create dataWhere is the data storedHow many copies are storedDo any of the systems have an automatic disposition processDo you have systems where the employee has the ability to keep a copy locallykeep a copy locallyCreate a data map and keep it updated

Understand you regulatory retention requirementsrequirements

Discovery Strategies for Medium and Large Entities

Create records retention policies. Policy(s) h ld b i l d i l t d ll ishould be in place and implemented well in

advance of any potential or actual litigation or investigationinvestigation Inbox

Project 1

3 month retention

2 year retention

Project 2 3 year retention

Project 3 1 year retention after deletion

Sent Items 6 month retention

Discovery Strategies for Medium and Large Entities

Legally refresh the policies on a regular basisProhibit the creation of employee PSTsDisable workstation CD/DVD drives and USB connectionsHold regular update meetings for corporate l l d ITlegal and ITTrain all employees on the policiesDocument everything

Discovery Strategies for Medium and Large Entities

Prepare your employees for questioning from th th idthe other side…

Interrogatories are written and sometime in-person questions posed by the opposing counsel that arequestions posed by the opposing counsel that are designed to discover key facts about an opposing party's case.

For IT, this usually will include questions relating to the corporate infrastructurethe corporate infrastructure.

Summary

Proactively archiving ESI including email and ffi fil d di t d i koffice files reduces discovery costs and risks

Applying policies to archived data insures data doesn’t stick around forever

Preparing for discovery ahead of time puts you i b tt iti h liti ti t tin a better position when litigation starts

Questions?

NearPoint Key Differentiators

Unified backend for all user generated content typesUnified backend for all user generated content typesCentralized control of retention policies and litigation holdsConsolidated view for eDiscoveryGranular policy definitionsAdvanced seamless and shortcut style stubbing technologygyFlexible file recovery mechanisms for administratorsAdvanced reporting, monitoring and alerting functionality

37

Where NearPoint Fits in the eDiscovery Ecosystem y

NearPoint eDiscovery Option (eDO) – search, review, tag and set legal hold on potentially

Processing

NearPoint Archive for File and Email Systems

g yresponsive content

InformationInformationManagementManagement

Collection

Preservation

Review Production PresentationIdentification

• C tAnalysis

Capture• Archive• Retain• Dispose• Monitor

NearPoint Custodian Collector Option (CCO) –helps with

38

Electronic Discovery Reference Modelwww.edrm.net

38

helps with reactive collection of historical file and desktop content

eDiscovery with Mimosa NearPointeDiscoveryRequest

Mi N P i t A hi

Email Server

Mimosa NearPoint Archive ServerSi l P i t f Di

Mimosa NearPoint Archive captures all discoverable content in real near-time

Single Point of Discovery

File ServerUsing the eDiscovery Option the legal Single Instance Archive Storage

and Index

Using the eDiscovery Option, the legal staff can search for, review, tag and place litigation holds as well as export responsive records for external legal counsel, plaintiff’s attorney or importation into case management tool. The IT department is not required in any steps