Thanks to Rich Hall of Bridgeway Software for providing this informative guest post:
Ask anyone following the eDiscovery space and chances are they have seen their share of world-class legal departments, as well as the haphazard, hoping to elude judicial rebuke. Let’s face it; there is nothing worse than seeing General Counsel (GC) on the front page of the Wall Street Journal.
What typically places a General Counsel on the cover of the WSJ is not the glory of a significant matter but more about how a matter, significant or insignificant, was handled. The real shame is evident when an insignificant matter is laced with mistakes and/or when negligence could have, and should, have been easily avoided.
History has shown that the best way to avoid judicial sanctions - and your name appearing in the WSJ - is to have a defensible legal hold process. To avoid a matter meltdown, General Counsel should consider these top ten tips when implementing a defensible legal hold process:
#1. Trade in Spreadsheets and Email
Today, many corporations are managing their preservation obligations using emails for notification and spreadsheets to track the results. Paralegals send the notices to hundreds and/or thousands of potential custodians. From there, they track “read receipts” or returned emails for compliance with the hold order via a spreadsheet and then save all the emails.
This process might work for a mere two or three preservations a year, but it does not work so well when managing the number of emails required for six, ten or 30 preservations. For instance, a company in the medical industry had matters with over 1,000 recipients per notice. Multiple paralegals were responsible for managing five to seven matters each. One individual paralegal was responsible for tracking 5,000 emails alone, so it came as no surprise that when asked if things slipped through the cracks, she assured them they did.
A common problem occurs when the custodian has a question and the email gets lost in the process. By the time someone gets around to sifting through their email, data has been spoliated. As a result, many organizations are trading in spreadsheets for automated tools that manage the notification and response tracking process. Managing legal holds electronically can be one of the top ways a GC can avoid an unfortunate situation.
#2. Identify Cost to Manage the Process
Attorneys balance risk and cost in everything they do. Yet despite the growing complexity of corporate legal matters, the legal department is often one of the least funded areas in the company. Their budget is typically overhead that has been allocated to the business units and the cost of the matters is allocated to the specific unit impacted. This makes it difficult to buy technology when there is little to no budget.
Since business units are accustomed to managing risk every day, a pure compliance approach may not be enough. One of the best ways to gain budgetary approval is to identify a “return on investment” to complement the need for compliance. One way to start is by identifying the amount of time the attorneys and paralegals spend managing the manual process of tracking and responding to emails, updating spreadsheets and generating reports. Based on that information, you can then calculate the efficiency gained by using an automated legal hold process as compared to the cost of the attorney’s and paralegal’s time to see if there is a business case. In most cases, the entry point is typically 10 – 15 litigation matters per year. After all, when a gain in efficiency can be demonstrated, along with a positive ROI and lower allocations to the business, capital expenditure purchases make more sense to those paying the bills.
#3. Automate the Process
How many times have you relied on someone to provide a status update only to find that individual is out on vacation or sick? Life happens, but that information is still needed immediately to make decisions.
Having the information easily accessible to multiple members of the legal team cuts the risk of a single person managing the information process. With automation, the responses to notices and status of interviews are readily available to the attorneys and decision makers who require them.
#4. Minimize Risk of Spoliation
Spoliation is most often described as altering or destroying evidence. A typical root cause is the negligent destruction of data because of timing or poor communication. The following scenario shows how easy spoliation can occur. A paralegal trying to manage the legal hold process with spreadsheets and email misses a question embedded within the body of an email because the subject matter looked like all the others. Six months later the custodian is on the witness stand and asked why the data was destroyed. It wasn’t a deliberate act; it was simply a missed email that didn’t get answered. Unfortunately, the result was an adverse inference charge.
Organizations need to apply a timely and repeatable process that allows the reduction of spoliation due to poor communications and unintended negligence, not to mention uncomfortable time on the witness stand.
#5. Create Defensible Processes
Most judges seem reasonable when presented with a defensible process. However, their patience wears thin when the expected mature process of the corporation does not correspond with the legal hold process presented. As we all know, when using a manual or unstructured process, there is always the risk that steps may be missed.
Here is a classic example: An employee transfers departments or leaves the company. Internal communications between HR, IT and Legal are often fragmented meaning that HR notifies IT, who then shuts off access to systems and repossesses the laptop. However, neither the HR nor the IT department proactively contact Legal to see if that employee had an active legal hold and if the laptop should be preserved. Instead, IT policies take over and the data is lost. In an ideal world, changes to an HR system would automatically flag a legal hold and generate an alert or report to the respective attorney to ensure preservation immediately takes place.
#6. Migrate Off of Homegrown Systems
Almost as dangerous as spreadsheets and email, many corporations develop their own legal hold system to handle the noticing and tracking process as they mature beyond spreadsheets and email. The legal department expresses a need and an eager internal development person says “I can do that”. The application is developed and legal starts using it.
At first it is a great addition but very quickly gaps in the process begin to surface. The system does not integrate well with other systems within the organization or lacks key functionality. Unfortunately, the project has been deemed complete and the development resources have moved on. The legal department now is left to supplement the system with their own additional resources. Any ROI that could have been realized is now replaced with a manual process and the risk of reporting inaccurate information.
And, more often than not it becomes another legacy application that has to be supported but does not meet the base requirements.
#7. Support the Complete Legal Hold Process
The legal hold process starts with the duty to preserve and ends when the matter is resolved and the hold order is released. The steps in between are typically a mix between internal capabilities and leveraging external parties. Regardless of who performs the steps, the legal department is responsible for insuring compliance with the entire process. As a simple guide, organizations should put process and technology in place that can support the complete legal hold cycle.
#8. Ensure Attorney Friendly Workflow
Attorneys are becoming much more technology savvy than people think. During a recent visit to the Sedona Conference annual working group, one couldn’t help but notice more laptops, iPads, and smart phones than ever before. The common theme, however, was the need for attorney friendly workflow. Attorneys do not want to learn new and complicated technologies to do their jobs. The theme of “practice more law” has never been more appropriate than it is today.
Creating the preservation notice and selecting the recipients are prime examples. A strong legal hold application should have templates for notices so that attorneys can opt to edit rather than create new emails each and every time. The same concept should be applied for recipient selection. Since many attorneys are used to leveraging groups within their email system, the application should allow groups to be selected and stored for future use at will.
Technology should also help automate the process and minimize steps versus adding complexity just for the sake of it. This concept is foreign to technology professionals that prefer “the latest and greatest” but resonates well with attorneys looking for a friendly workflow.
#9. Invest in Internal Resources
The most successful and cost effective legal departments are those that invest in educating and training their people on e-discovery and specifically legal hold processes. Quite often there are one or two people chartered with the role of an “e-discovery Expert”. At least one should be an attorney. If the attorney is not technologically savvy, invest in an eDiscovery guru. Some suggested resources can come from an existing IT person or a paralegal interested in expanding their technology knowledge. The rules do require interpretation and application for each corporation. A recommended best practice is to have an expert that is knowledgeable and can advise both the legal and IT teams on the best tools and processes to implement for their particular organization.
#10. Invest in a Standalone Product
Many eDiscovery and legal technology offerings now support more of the Electronic Discovery Reference Model (EDRM). Lately, there has been a wave of products that also include the term “Legal Hold.” It can be confusing because the term Legal Hold is often referred to as the process of securing documents as evidence rather than the management of the legal hold process itself.
It is not uncommon to see a company introduce a “legal hold module” as an add-on to their existing application. The challenge with this approach is that you may have to purchase technology you do not need to acquire legal hold capabilities. Or worse yet, you purchase a product that is an add-on module to one you already have. If it is not a standalone and strategic application for the vendor, it may not be updated as the market requirements change.
The best approach is to invest in a standalone legal hold product that can integrate with other systems yet can operate by itself. A standalone product is then forced to stay current with the federal rules of civil procedure or risks obsolescence.
Dodging the WSJ Bullet
Judicial rulings continue to reinforce the need for a repeatable and defensible legal hold process. One could argue that it is the most important step of eDiscovery. Follow these suggestions and your General Counsel can read the WSJ for pleasure and not as a potential career obituary.
Author Rich Hall is the Vice President of Electronic Discovery at Bridgeway Software. Contact him at rich.hall@bridge-way.com or visit www.bridge-way.com
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