Managing Information in Litigation: How to Avoid Spending a FortuneBy Adam C. Losey
A bevy of published articles bemoan the escalating costs of discovery -- the process during litigation in which the parties are required to exchange information. Given the informational nature of discovery, the CIO should help effectively manage information and control the associated costs.
The discovery process can be obscenely expensive if you and your data are not ready for it. Your company can spend handsomely on legal and vendor costs to muck through the preservation, search, review and production of vast swaths of electronically stored information (and occasionally spending a fortune litigating the issue of whether your company correctly preserved, searched, reviewed, and produced information). Reported cases and legal periodicals are full of horror stories of discovery costs run amok--such as more than $6 million spent to comply with a third-party subpoena in the In re Fannie Mae Securities Litigation case.
So, how do you help your company avoid hemorrhaging money on discovery costs?
First, figure out who in your company handles electronic-discovery issues, as well as what issues are handled by vendors and outside counsel. Typically, the costs of electronic discovery are built into individual litigation budgets and farmed out externally. Even repeat litigants sometimes never commit to hiring in-house electronic-discovery-savvy information technology personnel or counsel.
This is a mistake if the aggregate cost of external electronic-discovery services is larger than the cost savings associated with hiring in-house electronic-discovery expertise. Bringing in outside expertise in each case will often cost you a great deal more overall than would hiring someone in-house. What's more, it can lead to unacceptable variations in quality and methodology. If it is fiscally feasible for your company, make a case for creating a budget to hire one or more information technology personnel (and sometimes lawyers) to handle electronic discovery issues in-house. Make sure to include funds to purchase some electronic-discovery software tools; some of the best software is low-cost, so you needn't spend a fortune to set up your internal electronic-discovery team.
Second, be proactive about working with your legal department and outside counsel to manage your information in a way that will make discovery easier. Legal risk and discovery costs should not be the guiding force for how a business manages information (with the exception of certain regulatory requirements)--best business and legal practices mesh more often than you would imagine. Putting together a solid document-retention policy -- and following it -- offers your company special legal protections under the Federal Rules of Civil Procedure, and it typically makes business sense to do so as well.
Third, make sure your legal department and outside counsel understand technology or have a resource that understands the nuances of electronic discovery. Most litigators are not technologists -- the typical litigator is skilled in rhetoric, psychology and several areas of substantive law. This skill-set rarely includes a thorough understanding of, for example, metadata, deNISTing, hash values, Boolean search, network architecture, and the economics of electronic discovery.
That doesn't change the fact that about 97 percent of civil cases settle, or are resolved, prior to trial. For better or worse, the vast majority of civil cases revolve around discovery and a series of dueling epistles between the parties. Litigators that lack technological sophistication and shy away from technology (and who do not have a resource to rely on to handle electronic-discovery issues) will often find themselves out-maneuvered to the detriment of their clients. You do not want your company to be one of these clients.
To help your legal department and outside counsel, create a one- or two-page synopsis of your company's information systems written for those lacking in tech acumen. Then use this document as a way to efficiently start the conversation on handling electronically stored information.
Finally, make sure your company uses in-house and outside counsel that can efficiently and effectively manage discovery and control costs. Offer to be part of the vetting process for in-house and outside counsel. With your knowledge as a CIO, you will quickly be able to tell who has the requisite expertise to work with you and your team and who does not.
About the Author
Adam Losey teaches electronic discovery at Columbia University and is an attorney at Foley & Lardner, LLP, where he practices in New York, Florida, and the District of Columbia. Send your comments to firstname.lastname@example.org.