Legal Holds: Are They Effective?

In its article, "Structuring a Legal Hold," eDiligent, Inc. provides a useful, but rather high-level, framework for implementing a legal hold.  Nonetheless, are we really operating with today's technology in mind.  People no longer store information in neatly organized file folders that map directly to potential issues in dispute.  For example, customer communications can be stored on e-mail server, in a PST file on an employee's laptop, in Word document on file server, in a Groove workspace, on a thumb drive, or even, perish the thought, on a hand-written note.  Moreover, the a company's organizational structure in no way dictates how data is stored.  With a few exceptions, there is no centralized repository for official documents.

It seems the biggest influence on the nature of a legal hold will likely be the nature of the litigation.  If it's a personnel matter or a dispute with a particular customer, then the scope may be relatively small.  Just interview the individuals who have had contact with the individual or were involved in the customer matter and find out how they stored their data and who they talked.  If it's an intellectual property matter, every PC in the company may need to be investigate.  The challenge for many litigators is finding that needle in the haystack.  For those involved in e-discovery, the first challenge may be which haystacks should one look.  More and more, it's not always clear what data is out there.  For example, machine generated data has a life of its own.  If that becomes an issue in litigation (e.g., what time did the defendant login to the domain?), then the first step is figuring out what kinds of data would have this information and then where can it be found.  Moreover, people communicate via e-mail and instant messaging often unconsciously.  They may not be able to recall all communications on a particular.  The end result is that while counsel can say to put a hold on all data relating to a particular subject, that is of little use if the request can't also pinpont where such data can be found.  Instead, we may need to first do an initial search to determine where to place our holds. 

The upshot of all this is that in the context of the new federal rules and recent court decisions, counsel and their experts need to get more IT savvy about their organizations because document and records management is not what it used to be.  Retention schedules are a myth.  Beyond a few key business processes (e.g., contracts management, securities filings, etc.), there is no real management of data.  It's just one big mess.

Much Ado About Nothing?

With the recent press coverage of about new Federal Rules of Civil Procedure, you'd think that these rules just popped out of nowhere.  However, for those following the various e-discovery blogs such as Preston, Gates, & Ellis' Electronic Discovery Law and Fios' Sound Evidence, this has been a long trip.  After all, substance of most of the rules has already been implemented in federal courts through cases like Zubulake v. UBS Warburg (Zubulake III), 216 F.R.D. 280 (SDNY 2003).  Certain Coleman v. Morgan-Stanley, 2005 WL 679071 (Fla. Cir. Ct. Mar. 1, 2005) served as a kind of wakeup call more than a year before the Rule 37 Safe Harbor provision went into effect.  Nonetheless, for those trying to push the envelope in e-discovery, the press coverage is welcome news.  Hopefully companies will realize that they cannot wait until the last minute to figure out if their information is "discoverable."  Retention policies, litigation hold procedures, and information disposal practices need time to be written and implemented.  As Arthur Andersen can testify to, letting people to their own devices under the heat of an subpoena can lead to catastrophic results.  So let's welcome all the Johnny-comes-latelies and hope that they're not too late to the party.