The ins and outs of ediscovery

How many emails did you send and read today? How many messages build up in your inbox when you’re out of the office for a day?

Multiply that by hundreds of employees and add myriad attachments in various file formats and languages, numerous file servers and storage devices and you begin to understand how much electronic data is processed and accessed by one large company in just one day. What if you had to search through a year of that data plus years of archives to find information stored in a series of emails that may – or may not – exist?

The search for such a needle in the haystack used to mean paying an external agency large sums of money to pore over mountains of paper records for weeks. Litigious or heavily regulated companies were the first to employ smarter ways to find evidence using technology capabilities of outsourced litigation support or advisory firms. But times have changed; sorting and locating electronic evidence is fast becoming a core business need. Every electronic document created – email, Excel files, Word documents, PowerPoint presentations, instant messages and even voicemail – is fair game or “discoverable” when it comes to litigation, regulatory or compliance requirements or human resources investigations.

What is ediscovery? Electronic data can be stored, sorted, indexed, searched and analysed, but to do it quickly and effectively requires specialised technology. That technology exists and is readily available. Today’s modern enterprise has an opportunity to manage its electronic data so that it is structured and searchable at a moment’s notice.

The act of processing electronic data in order to answer questions for governance and compliance reasons or find proof for internal investigations is called electronic investigation. When this is undertaken in response to litigation, the process is called electronic discovery.

Whether an organisation should in-source that capability or engage an external provider, or both, is an important question to answer. You might expect an ediscovery software CEO like me to recommend to every organisation that it purchase electronic investigation software and implement it immediately. This is very effective for many companies, but bringing ediscovery in-house is not the best solution for all.

Outsourcing all of your ediscovery to expert firms has its benefits and makes sense if your data volumes are small, your litigation is infrequent, there are potential ethical conflicts or if a specific investigation is a matter that is critical to the company’s future.

ediscovery is complex and the penalties for getting it wrong can be significant. It makes good sense to outsource things that you don’t fully understand and can’t do easily for yourself, especially when there are experts available.

Benefits to outsourcing ediscovery include:

  • You will work with experienced experts in ediscovery and electronic investigation;

  • These experts wield a variety of tools to ensure your data is processed, culled, searched and exported accurately and in the appropriate formats;

  • You are passing the responsibility of organizing all the data to a third party that to some extent can be held responsible for doing it properly (but ultimately the responsibility always remains with the corporation);

  • You don’t have to create and manage a capability in house that is outside the expertise of you and your employees; You will have a 3rd party forensic/ediscovery expert witness who can testify that all was done in a repeatable, defensible manner.

Organisations that are serial litigants or are operating in heavily regulated environments are rapidly choosing to build their procedural and technological capabilities to deal with the first phases of ediscovery themselves. Such organisations need to react in short time frames and, by undertaking their own early case assessment in-house, can increase the likelihood of a positive outcome, reduce the cost of negative ones and minimise the cost of the discovery process. The primary goal with electronic discovery must always be to achieve a process that is repeatable, defensible and measurable. Getting it right the first time (and every subsequent time) is crucial because once mistakes are exposed you will have credibility problems. As some organisations have already found out, getting it wrong can have disastrous consequences including very large fines.

Once you have decided that in-sourcing is a good idea, to set yourself up for success you must ensure you have the right resources, policies and procedures and – of course – the best technology in place. Whether you in-source or outsource, key features your technology solution, or that used by your external agency, should include are:

  • Ability to process a wide variety of data types extremely quickly (at rates of 35-45 GB per hour);

  • 100% Unicode compliance and the ability to process and search all languages and character sets;

  • Ability to identify all irregular files including corrupted, encrypted, deleted, non-searchable PDFs, files which may have had their extensions changed; ability to manage images (e.g. detailed schematics) just as well as it deals with text files.

  • Ability to provide a list of every word in the dataset, and its frequency, in preparation for the meet and confer conference; Ability to export the end results into the load-file of your or your lawyer’s choice;

  • Access to competent, trained and empowered support staff that can help when things go wrong.

Most organisations and experts would agree that electronic discovery should never be 100% in-sourced and the emerging global trend is towards a hybrid model where a company’s external legal eco-system is used at critical times throughout the discovery process. Some key points to consider include:

Have a third party expert assist in setting up your policies and procedures, training key staff and dealing with the first few cases – especially in the critical areas of collections, processing, search and analysis and the review of results;

Ask your law firm for advice on what electronic information needs to be collected for a given case;

Have external advisers forensically image the hard disks of key custodians to ensure that all critical information is collected in a defensible manner; and

Have your law firm confirm which communications are privileged and which documents can and should be redacted and to what extent.

Having third party experts involved adds to the defensibility of your case and leads to better decisions. However, if you use your existing equipment and train key staff, you can often have most of the information processed and available for search in less time than it would take to complete discussions on the terms and conditions of an outside contracting body.

Eddie Sheehy is the Chief Executive Officer of Nuix, the Australian developer of email investigation and e-discovery software.