Feature

posted 25 Aug 2010 in Volume 13 Issue 1

Masterclass: The smoking gun

Dr Johannes C. Scholtes, chief strategy officer at ZyLAB, reveals how corporate counsel should be managing emails to prepare for e-discovery.

Four things you will learn from this Masterclass:

1) How enterprise information management can minimise legal risk

2) The pros and cons of proprietary and XML-based systems

3) What performance capabilities to demand from service providers

4) How to develop an effective enterprise information archiving strategy

The fall-out of the credit crisis has had a dramatic impact on compliance, risk, e-discovery and records management requirements for organisations of all sizes. Managing and controlling electronically-stored information is a matter of technology, but also of strict procedures, quality control and well-documented information management activities. It has become one of the most serious sources of legal exposure and risk.

There are several key questions an in-house legal team must consider in today’s business climate. Are you prepared to respond to an e-discovery demand imposed by regulators, civil parties or a competitor? Is your firm able to find and produce all relevant documents? If so, at what price and how fast?

Increasing numbers of organisations are recognising the importance of not waiting for an electronic information request. They actively audit, monitor and police their activities to enforce ongoing compliance and take immediate action when needed in order to avoid expensive legal proceedings.

However, there is a great need for fully-integrated solutions for information management, identification, preservation, collection, processing, review, analysis and production (see Figure 1: The Electronic Discovery Reference Model).

It never ceases to amaze me that some companies still lack a managed solution to archiving employee emails, let alone policies and procedures to enforce any email archiving principles. Email is the most litigation-risky archive, the number one place for law enforcement agencies and regulators to look for smoking guns, and the biggest money pit during e-discovery (closely followed by unstructured data from file shares and data from SharePoint).

Today, in 80% of all e-discovery requests, email is involved. In almost all high-profile cases, the smoking or loaded gun is found in email.

Perceptions of email archiving

Email has been seen as:

· An IT/storage issue. The focus is on saving disk space. Single instance storage is a main requirement, which leads to extremely expensive e-discovery costs.

· A compliance/liability issue. The focus is on finding out and addressing whether there are special rules for keeping emails or if your organisation is subject to the risk of subpoenas, which can lead to large-scale discoveries and disclosures. As a result, legal often wants to destroy email as fast as possible, which does not help future knowledge management and knowledge sharing.

· A business issue. For instance, a customer service/sales, project management or R&D issue, where users want to keep as much email as possible to help them to solve problems faster in the future, which includes the risks for extended liability if a user keeps too many emails.

Regardless of how an organisation perceives the goal of its email management needs and responsibilities – or, for that matter, the way in which it needs to manage all of its vital information – its ability to develop and implement a technical solution can be a real challenge, particularly when taking into account the various needs across core business units.

E-discovery and compliance stakeholder priorities

Executive Leaders	Corporate Counsel
Minimise costs and liabilities	Minimise legal risk
Maximise productivity and profitability	Defend company interests
Foster compliance and positive reputation	Advise on business strategy
IT Department	Retained Counsel
Leverage IT investments	Deliver positive outcomes
Maintain data security	Client development
Optimise system compatibility	Demonstrate legal expertise

Prepare for litigation

Being unprepared for litigation is one of the largest business risks and can seriously threaten the continuity of an organisation. Remember UBS and how its lack of readiness and its over-archiving forced it into a very unfavourable settlement with Zubulake? Only time will tell whether BP is prepared for the large array of lawsuits that it will be confronted with in the coming years.

Archiving and enforcing email management can be a complex task. From a technical or disk space-saving point of view, it is not difficult to archive emails, but when e-discovery and early case assessment become a reality and deadlines are imposed on your organisation, new challenges emerge.

For example, exploratory searches for early case assessment and processing large collections of email in a defensible and auditable way can be a significant challenge. Only with the right technology and by creating a daily operating procedure can this be done in a scalable, reliable and cost-effective manner.

The cost of finding relevant messages – as well as de-duplication, review, redaction and disclosure – can be astronomical. By being properly prepared, you can save tremendous amounts of money and lessen your risks.

Proprietary vs XML systems

As opposed to XML-based systems, proprietary storage systems embed a variety of risks. Consider, for example, the thousands of businesses in the 1990s which bought the popular optical storage systems. Not only were most of these systems proprietary, but the majority of the vendors in that segment have gone out of business or put their development and support resources elsewhere.

In general, the database-driven approach seems logical, given many vendors’ traditional or core expertise with database-oriented solutions. But being so attached to a traditional database-driven viewpoint automatically triggers hidden future costs when long-term email management is a requirement.

For example, Microsoft’s SQL server has had four different versions over the past eight years, which means that in most cases users must perform a conversion with each new release, as some of the older versions are not supported with newer versions of Microsoft’s database.

The need to move forward and support all the considerations required by long-term and appropriate email management – security, sustainability, affordability (in terms of both upfront costs and minimal long-term expenditure for conversions or upgrades), compatibility (between systems, tools, and stored media), and suitability for e-discovery activities – would seem to indicate building solutions less reliant on storage-focused database systems and more on systems built on, or at least in close association with, a flexible, enduring and affordable XML-based infrastructure.

Some traditionally database-reliant vendors are acknowledging the need to move beyond reliance on databases, integrating some XML storage capabilities into their solutions. But making a token nod to XML while still relying on databases to perform ‘heavy’ storage doesn’t really solve many of the core issues discussed here. Even a partial reliance on databases will still increase costs (as well as require upgrades every few years), create more opportunities for ‘liability vaults’, enhance the potential for old information to eventually lose its integrity, pose potential integration issues, and make detailed management of data – especially in proactive investigative situations – more difficult and risk-intensive.

Adoption of XML

Many agencies in the UK and also in the US government are using the types of processes advocated here, and are supporting them with XML, to great effect. These agencies are saving money and getting better performance and efficiency because their processes are thorough and their XML platform ensures them of the following:

· sustainable, secure and enduring infrastructure, regardless of how much information is stored;

· cost containment, due to no required conversions or high upfront costs; and

· an array of supporting tools that greatly enhance capabilities for e-discovery and e-disclosure.

Don’t get complacent

While some organisations have proactively implemented the right email archiving solutions, even they should not become idle. Archiving and managing emails for e-discovery is just the beginning.

Litigation risks are still being increased by:

· the continuously growing volume and complexity of information;

· the worldwide distribution of information (due to subsidiaries, outsourcing partners, PC and communication equipment, and ‘the cloud’); and

· contradicting regulations.

The only real method to becoming litigation ready is to have an enterprise information archiving (EIA) strategy in place for all your information, including: email; file shares; SharePoint; business repositories; paper records; and also the new elephant in the corner: multimedia information and information in ‘the cloud’.

Such a strategy should include: policy and retention management; content analytics for automatic information archiving, classification and valuation; exploratory searches; e-discovery support; defensible and enforced quality controls, methodologies and audits; and meta-data, security and storage management.

The combination of e-discovery, records management, email archiving and knowledge management brings the ultimate goal within reach: litigation readiness. Through archiving and ensuring search and records management for all your organisation’s data – paper, electronic files, email and multimedia – you can relearn the art of information management. You can move away from a primarily litigation-responsive attitude and be prepared for litigation. You can also avoid business disruptions and management distractions by making e-discovery, records management, risk control and compliance part of daily business and operating procedures.

An industry revolution

Just as the US Sarbanes-Oxley Act turbo-charged the enterprise content management industry in 2002, e-discovery and additional oversight and regulations will turbo-charge the search, content analytics and archiving industry.

The good news is that a proper email system can often be financed out of your lower insurance premiums, especially if you had some damages in the past.

Checklist: Managing Email

Below is a checklist on the types of performance capabilities that should be available with any compliance/liability-avoidance solution to manage organisational emails.

· Capturing: Ensure flexibility is built into your email capturing solutions, especially in terms of allowing individual users to archive emails directly from MS Outlook, Lotus Notes or Novell GroupWise in the proper sections of a filing plan. Also, the full capture of all email must be allowed from your email servers for auditing and enforcement purposes.

· Storing: Email should be stored in an open (non-database) format, such as XML, which is endurable and sustainable. You do not want to be continually converting email collections over time.

· Searching: Demand an advanced full-text search engine that can search terabytes of data.

· Classifying and organising: Consider using content analytics and text mining to automatically classify and organise your emails.

– scholtes@zylab.com