Under the amended Federal Rules of Civil Procedure (FRCP) once the lawsuit has commenced, the opposing parties must prepare for the scheduling conference by confirming electronic discovery (EDD) plans within 120 days of the filing as dictated by the amendments to FRCP 16(b). Additionally, per the amendments to FRCP 26(f), at least 21 days before the scheduling conference the parties must “confer [and] discuss any issues relating to preserving discoverable information, and to develop a proposed discovery plan.” This “meet and confer” session requires the parties to disclose where and how relevant Electronically Stored Information (ESI) is stored, as well as reaching preliminary agreements on data format, preservation and procedures for asserting privilege. This translates into less than 100 days to prepare the EDD plans – effectively accelerating the preparation and start of the traditional e-Discovery phase by at least three months – if not years! To those of us in the legal industry, the reality is becoming very clear – the amended rules that were supposed to reduce litigation costs may, actually, increase the costs, especially with regard to all work performed in the initial 120 days. The articles in this month’s Newsletter will focus on ways to mitigate the incremental costs directly related to the amended FRCP rules.

We could dedicate the majority of content in the next several Newsletters addressing specific recommendations of what to include in the initial conference between the parties, and we probably will. However, with the first day of December upon us, our best advice is to: 1) Remember the “Golden Rule” – Do onto others, as you would have them do onto you; 2) Have no doubts that technology will find the “smoking gun” if one exists; and 3) Know that any party not properly producing electronic discovery will suffer significant penalties.

How can you apply this advice in your conference? Here are some examples:

The above examples, for someone familiar with the amended FRCP rules, EDD and the litigation process, are very elemental and primarily based upon common sense. With the amended rules only now going into effect, and being part of a legal system based upon case law and precedent, there are no experienced experts or advice from the “trenches” to provide field tested guidance - which will precipitate over time. Until the dust settles, Form 35 will be a collaborative effort. Law firms and corporate counsels need to assemble a “team,” including members of their staff, appropriate IT department members and experienced technology partners familiar with EDD, litigation support and amended FRCP rules for the short-term on a case-by-case basis and, as the next article suggests, compile and execute a strategy for the long-term.

Humans, animals, plants, and even computers, have known predictable lifecycles. Electronically Stored Information (ESI), as defined in the amended FRCP rules has no known predictable lifecycle. Oddly, the media it resides on – hard drive, CD, DVD or tape, has a predictable lifecycle but not the ESI existing on it. Essentially, if maintained on viable media, ESI could exist until the end of time without intervention. Let us further complicate the issue by acknowledging that most IT infrastructures for maintaining ESI has never been more distributed and disjointed. Typically, the infrastructure consists of an international footprint supporting multiple data silos, network attached storage systems, countless desktop computers located within the company and in employee homes, notebook computers, PDA’s and other portable devices as well the an ESI backup platform of choice for disaster recovery.

We are not done yet – it gets worse. Add the ever- increasing volume of ESI, itself. We are now generating an estimated 80 Billion emails daily – many with attachments and at least another 20 Billion documents daily including spreadsheets, correspondence, drawings, and other miscellaneous documents. Add to this voicemail (yes, audio files are defined as ESI), text messages, instant messenger messages and photographs and you begin to see the scope of the challenge the amended FRCP rules have unleashed. As a legal professional, you are probably aware that over the last five years the volume alone of emails has been the number one reason for adverse early settlements, plea bargains and court sanctions.

Corporate America and related legal professionals had a wake-up call with Sarbanes-Oxley (SOX) in 2002. Records Management initiatives were a priority in every public and regulated corporation. Certified Records Managers formerly referred to as the company records librarians, with offices in the basement, saw salaries suddenly tripling and offices relocated near the executive suite. Universities across the country added Records Management majors to their courses of study. Records Management courses became a staple in MBA programs. Unfortunately, the majority of Records Management is focused on SOX compliance, as shortsighted as that now may seem. The good news is that the amended FRCP rules should precipitate another wake-up call with a greater sense of urgency for an organization-wide Records Management policy using the SOX platform as a foundation for Enterprise Content and Records Management that would be compliant with SOX and the amended FRCP rules.

With a process in place to manage all of an organization’s ESI with categorization, preservation, indexing, access and destruction, monitoring and audit policies and procedures in place, not only will SOX and FRCP compliance be assured but an organization’s intellectual property knowledgebase and security requirements will be a natural by- product of the process. The objective is clear – Enterprise Content Management (ECM) balancing compliance with reasonable ESI lifecycle management as dictated by a consensus Records Management policy that is enforceable and enforced.

At the core of the “dream team” that will facilitate all of this becoming a reality in time to save an organization millions of dollars or more in adverse judgments, settlements and sanctions will include, in addition to the organizations Records Manager(s), corporate counsel, outside counsel and IT department personnel. Complementing this team, should be consultants or staff versed in Litigation Support, FRCP, Computer Forensics, eDiscovery, ECM, and Records Management. The sooner you start, the lower the risk of being in the headlines.

A little paranoia is a good thing, especially as it pertains to risk management. In our private and business lives our most common solution for risk management has been insurance, for our home, automobile, life, errors & omissions, management succession/survivor, health, disability, etc. – you get the idea. Since there are no actuarial tables or policies specific to the damage Electronically Stored Information (ESI) can precipitate in the form of adverse judgments, settlements, sanctions or penalties, you are on your own managing this risk. Without being presumptuous, it would be a safe bet to suggest that you would agree that being proactive in managing this risk would be in the best interests of your organization.

Whether you have an ESI Records Management policy in place, or plan to, monitoring and enforcement are critical components of such a policy. Do you know every location of sensitive Compliance related ESI? Are your employees following your mandated ESI policies? Would you prefer to know where unsecured data is before or after an audit takes place? As you go into your first FRCP mandated “meet and confer” session,” do you know everywhere ESI resides and what potentially relevant content exists in every repository? When an employee departs, do you know what ESI walked out the door prior to his/her departure? Do you have any idea of what to do to find your “data in the wild” – the hidden, forgotten ESI residing on portable devices or in isolated locations? Is a little paranoia starting to set-in?

Technology has created this problem and risk and, fortunately, technology can mitigate the problem as well. First, you are not alone – some analysts suggest that over 60% of corporate ESI is not cataloged in known corporate databases. ESI can exist anywhere on a network including rogue departmental file servers, hidden on laptops and other devices used by today’s mobile worker. Solutions are available that can automatically negotiate corporate networks providing a comprehensive view of all the content – including identifying missing devices, such as traveling laptops and PDAs that are registered but not currently online. Think of the advantages and benefits of being able to demonstrate that you have satisfied your obligation to investigate and review all possible sources of ESI, both in litigation and compliance scenarios. Additionally, think of the peace-of-mind that would come from knowing the disposition of the ESI available to a departing employee.

For your convenience and benefit, BlueStar will be hosting a Webinar on December 14, 2006 starting at 11:00a.m. CT titled “Proactive eDiscovery – the Best Insurance.” Featured will be solutions from two leading developers of proactive eDiscovery solution platforms – Clearwell Systems and Deepdive Technologies. Click here for additional information and/or to register for this event.