e-Discovery at the Harvard Club in New York City

The stately 19th Century Harvard Club this week hosted a cutting edge 21st Century conference on e-Discovery. It was organized by ALM, who also puts on the Legal Tech trade shows. I was curious to see this private club and happy to speak at this event for N.Y. paralegals and attorneys. I was not disappointed by the wood-paneled Harvard atmosphere (where I took a few photos shared here), nor the content of the CLE. The event entitled Managing Today’s Discovery Process was well run, thanks to the organizer, Karen Abrams of ALM, and the program chair, Sherry Harris, the Senior Case Management Specialist for Hunton & Williams.

David Shonka of the FTC

Before the event, I got a chance to speak with the head of the Federal Trade Commission’s e-discovery team, David Shonka. David is also the FTC Assistant General Counsel for Litigation. David, like me, didn’t go to Harvard and was delighted to see the inside of the Harvard Club for the first time. We started talking about Qualcomm and both agreed it was The Big Case of the year. He endured my righteous rant about Qualcomm and attorneys who do not play by the rules, the ones who deliberately hide evidence they know should be produced. We also agreed that this kind of unethical conduct was nothing new, nor unique to e-discovery. It has always gone on, but in the olden days of paper discovery, it was far harder to expose. Today, with electronic discovery, hide the ball is suddenly a high risk undertaking. David picked up on my somewhat angry tone (over the years I have suspected several opposing counsel of playing this game, but have never been able to prove it). He said that in view of my strong opinions on this topic, I would probably like his presentation.

He was right. The FTC e-discovery team leader began with an overview of the incredible facts of the Qualcomm case. This was a prelude for this primary message, that there are only three fundamental principles to follow in e-discovery. They are, in his words:

Don’t Lie.
Don’t Hide Things.
Don’t Make Promises You Can’t Keep.

David pointed out that a law firm’s reputation for truth and honesty are key. If David thinks he is dealing with a lawyer that does not follow these fundamental precepts, then the FTC will naturally be much more demanding in their requests for information, and harsh in their treatment. Conversely, David is willing to negotiate and exercise leniency when an attorney is honest and forthcoming, and reveals the bad with the good. This attitude, in my experience, is also followed by most judges.

On the point of “don’t hide things,” he stated that anytime you have to have meetings, to try to “figure out an argument why something is not responsive, it is responsive.” You should produce it, you should not try to hide it. If not, in David’s words, you risk the principle that: “You are known by your last lie.” And that reputation will last for a long time. No doubt the boys in the 18th Century Harvard Philosophy and Advocacy Clubs (certificates shown above) would have agreed.

The FTC e-discovery chair stated that, in his view, parties have three general options for responding to discovery:

1. Hardball – prolongs investigation and is costly.
2. Let’s-see-if-they-can-find-it – again, prolongs investigation and is costly.
3. Co-operation – fastest, surest results and is the least costly.

David said the third path of “negotiation” is only the way to go for all e-discovery situations, but especially if you are responding to the FTC. No doubt the Harvard class of 1925 shown below would agree. (Note the sign they are holding on the right is not about one of my ancestors, instead it says “The Mess is Still Fundamentally LOUSY”, which is, I think, a reference to the food.)

Aside from general principles, David also had some practical advice on e-discovery, and how to find the relevant information, and not waste your time on non-responsive ESI. Here is his chart of the process he recommends:

Process of Narrowing ESI:

1. Preliminarily Identify Issues and Sources of Information:

a. Key players (12-36 max in any case)
b. Occasional players (only search if you have to)
c. Fringe players (rarely ever search)

2. Data

a. Enterprise systems
b. Local systems (particular office or groups)
c. Individual systems
d. Archives
e. Back-ups (and Legacy Data)

Most of the time all of the relevant data needed for a case will be stored on the key players’ Enterprise, Local and Individual systems. Sometimes you may also need to look at Archives too, depending on what you find in the more easily accessible stores, and how difficult it is to get at the ESI on Archives. Back-up tapes and Legacy Data are not usually needed. David explained that the FTC typically only requires two daily backup tapes be preserved, just in case they want to look at them later, which they usually don’t. He noted with a chuckle that the FTC picks which two tapes to preserve, not the respondent, and they usually just pick two at random.

On the issue of Litigation Holds, the FTC team leader recommended that a senior, experienced attorney personally supervise the preservation process and deal with all of the key players directly. This is at odds with the practice of many companies and firms that tend to delegate this task to younger, less experienced attorneys or paralegals. Probably not a good idea to do that when dealing with the FTC. If a second year associate messes up, you are not likely to have much sympathy. If an older guy like me screws up (yes, it happens), maybe they will cut you some slack.

On a promising note for large companies, he said that parties and the courts should always remember that companies are not in the business of preserving and holding evidence to produce to adversaries who may someday sue them. If e-discovery becomes so burdensome that it impairs businesses’ operations, then something is fundamentally wrong.

David’s presentation also included the fundamental message of this blog, that building an interdisciplinary team is key to e-discovery compliance. He recommended, as do I, that the team include IT, in-house and outside counsel, and vendors. He also advised that you “get everybody in the same room.” Otherwise, you will inevitably play the old child’s game of telephone, where a simple message is whispered for one person to the next, and by the time it reaches the last person, it is totally screwed up. He said it may seem expensive to some companies to assemble such a multidisciplinary team, and have them meet regularly and in-person, but he is convinced you save money in the long run.

Apparently the FTC has been using such a team approach to e-discovery for several years now and they are pleased with the results. He told me before the CLE started that they now have two attorneys who only do e-discovery, and they have help from a number of techs and paralegals. Of course, the FTC cannot force companies under investigation to also use a team approach, and specialized attorneys, but David did say publicly that they will sometimes refuse to meet with a company’s lawyers unless they bring the IT liaison with them to the meeting.

David also spoke of the serious risk of just relying on custodians for self-collection. They may print out, or transfer to a disk, but they are likely to do it in a way that messes up the metadata. He stated that metadata is only rarely needed for production, and depends on the case, but you should still try and preserve it as best you can. Still, the main reason you should not rely on custodians alone for collection is that they are “self-interested.” They may, for instance, want to avoid embarrassment and not produce certain very relevant emails that they wished they had not written. In his opinion, you can do the collection in-house, and do not have to hire an outside vendor, but you should use a qualified technician to go to the computers and collect the data, and not just rely on the custodians. As to forensic imaging, where outside experts are typically used, that is only rarely needed in special cases where there are indications of criminal conduct.

Sherry Harris

Sherry provided the opening keynote address. She has over 30 years experience with Hunton & Williams and is now the dynamo behind their e-discovery efforts. Although not an attorney, she knows far more about the subject than most experts. She commented on my sports analogy blog on e-discovery, and said how important it was for paralegals to help make sure the attorneys they support never drop the ball. Like most everyone else, she also talked about Qualcomm, and the outside counsel who now stand to be sanctioned. She emphasized that this is something you never want to have happen to your law firm. One way to avoid this is for lawyers and paralegals alike to, in her words, “stay aware of evolving case law.” She also said that in her experience, “traditional discovery is gone forever; but right now people are resisting the changes.” Her advice: “Make technology your friend.”

Vendor Selection and Negotiation

Next, Jennifer Tomaino, attorney member of the Verizon e-Discovery Team, and Oliver Gierke, Litigation Case Manager for White & Case, presented on Vendor Selection and Negotiation. It would be hard to imagine two people better qualified to speak on that topic. Jennifer is Patrick Oot’s “right hand man” (so to speak) for Verizon, and so has a good perspective on corporate e-discovery teams and their procurement of vendor services. Oliver is a key technical member of the White & Case e-discovery team, a law firm with 2,300 lawyers in 37 offices located in 25 countries.

Jennifer and Oliver both noted that paralegals play a key role in vendor selection because they work closely with vendors to get the work done, and are in the best position to evaluate performance. They also both commented on how big the e-discovery industry has become, now approaching three billion dollars a year

Jennifer Tomaino stated that Verizon does its own preservation and collection, and vendors do not usually get involved until the procession stage. Verizon is looking to take even more of the e-discovery process in-house in the next few years, and may move into review. In her experience, the review tools that the vendors offer are all fairly similar. She cautioned that “technology can help, but is only as good as the people using it.”

Jennifer suggested that you look for recommendations from others who have recently used a vendor. Also, you may want to employ a formal two-step procedure where you issue an RFI – request for info, and then an RFP – request for product proposal. She suggested you study the Sedona’s sample RFP in their vendor selection paper, but do not simply use the form without thought and customization. Jennifer also noted, and Oliver agreed, that a Vendors’ project managers are key. They need to provide quality, accessibility and responsiveness (24/7). Since Verizon is, in Jennifer’s words, a serial litigant, they can get the best rates because of the volume. Still, try and be creative in making deals with vendors, who usually charge by the amount of ESI, and/or time. For instance, she suggested trying to get a deal where you only pay for hits, not misses.

Oliver Gierke has found that vendors can offer both expertise and cost control. Their expertise includes: 1) data forensics, which he has never seen done in-house because you may need an independent expert to testify on authenticity and chain of custody; 2) collection; 3) processing; 4) hosting data for review because most companies and firms do not have the capacity to store large amounts of ESI; 5) production; and 6) consulting. Vendors can provide cost control by: 1) exclusive or long term contracts at discounted rates; 2) retention of data only when needed; and 3) hiring contract lawyers for review. He thinks that a good vendor can save you a lot of money, although the expenses are front-loaded at the beginning of the case. Oliver also noted a few pitfalls of reliance on outside vendors. Their services are expensive, there is less control than doing things in-house, and more room for miscommunications.

Oliver recommends that you meet with vendors in person and know in advance who will be assigned to the project. You should make sure that the vendors can clearly explain what they will do in a way you can understand and explain to others. Beware of those who speak only in jargon. Also, and many who spoke at the CLE later emphasized this point, be sure to find out if the vendor is going to use subcontractors and check them out as well. Look out for vendors who get the contract and then sub everything out to third parties. Finally, Oliver recommends that you renegotiate pricing with a vendor every 6-12 months. The industry is rapidly changing and prices are going down.

Tom O’Connor

Next up was Tom O’Connor, who spoke on Cost Containment Strategies. Tom is an independent consultant from New Orleans, and the Director of the Legal Electronic Document Institute, a non-profit he organized. Tom noted the technology consulting company, Gartner, estimates that 20% of the e-discovery companies existing today will be out of business in a year. He suspects many of the rest will be lost through consolidation, with a few big companies buying all of the rest.

Tom opined that process management is key to cost containment. You need to set up best practices that are repeatable, yet still flexible. Tom also pointed out the inherent tension between in-house counsel trying to preserve costs, and outside counsel who must answer to the judge, and have an ethical duty to the client and the court. Again he talked about Qualcomm, but pointed out that this is nothing new; there are many cases driven by this conflict.

The part of Tom’s presentation I liked the most was his discussion of the paradigm shift now in progress in e-discovery, as a mirror of the world. The Old Paradigm was based on single page TIFF with bates numbers, and review as single pages. It thought of documents in terms of paper pages. The New Paradigm is native file based, where you produce, process and review in native format. Our idea of a “document” should completely change. It is all bits and bytes now. Stop treating it like paper where you Bates stamp each page. Under what Tom calls the new Docucentric paradigm, you set up a unified enterprise wide relational database with data extraction as needed. Under the new system you automatically extract metadata fields, and do deduplicating, near deduplicating and other processing. He thinks that good content management systems are key to making this happen. The new native ESI paradigm is faster, more efficient and far less expensive than old paper concept systems.

I agree with Tom wholeheartedly on these new native paradigm insights. Tom said that many object to going native because they think you need TIFF and bates numbers in order to preserve authenticity and stay organized. Tom disagrees and thinks that the Bates stamp has been replaced conceptually by hash, and cited to my law review article, HASH: The New Bates Stamp. He thought I was going to speak about that later (I wasn’t). The bottom line for Tom is that there is a huge cost reduction possible by eliminating TIFF and working in native. Tom claims it is in the range of 30-40%, but notes that some vendors claim the savings is more like 80-90%.

Afternoon Program

Next came lunch, followed by my presentation: e-Discovery Teams: the New Gold Standard. I explained why corporations and law firms are moving to the multidisciplinary team approach, and corporations’ especially are taking it in-house. I covered the benefits of the team approach, and why so many companies are having trouble doing it. Everyone seems to agree it is the Holy Grail of e-discovery, but just like the mythical chalice, it is nearly impossible to find. I had a good time because the attendees were very attentive and laughed at the right times. As a plus, I got to use my new Macbook Air and Keynote 2008 presentation software.

After me came several good presentations, but they will be shortchanged in this blog simply because I was too tired after my work to focus and take notes of what they said. Scott M. Cohen, Director of Practice Support for Proskauer Rose presented with Dottie Perillo, a paralegal from Dupont’s e-discovery team. They spoke on a subject close to mine, Achieving a State of Litigation Readiness – Bringing About Effective Dialogue Between Inside and Outside Counsel and the IT Department. I do recall meeting Scott the night before and trading old computer stories. I do not run into that many people who remember my first computer, the TI-99/4A, nor appreciate how amazing it was to be able to program both speech and animation on it back in 1981. Scott is also one of the few people I have met who actually used the whistle in the Captain Crunch cereal boxes as part of his telephony research when he was a kid in high-school.

Next came the unforgettable Monica Bay, Editor-in-Chief of Law Technology News. Her topic was How EDD is Changing the Job Market. I remember her strong presence and unbridled enthusiasm, but not enough of the content about the job market to try to summarize it. I think she said it was in fast transition, and right now, no one is too sure where it is going. The only thing clear is that paralegals with good computer e-discovery skills are in very strong demand, and this demand is certain to increase. I also recall her scolding many blue chip law firms for not being inclusive enough of paralegals and IT. She also talked about Darwin and survival of the most agile, and that if the old line big firms did not change fast, and form bona fide interdisciplinary teams, that they will go the way of the dinosaur. They will not be able to compete, and their long term clients will leave them for more agile specialists, ones not hung up on attorney old-boy networks. No, she does not mince words.

Kenton Hutcherson, a sole practitioner from Dallas, whom I had met before at Sedona, presented on using metadata to uncover hide the ball tactics by the other side. He told a story about a case he had just out of law school, a few years ago. He took a case all of the partners said was a loser, and achieved a favorable settlement by analyzing the metadata in load files the defendant produced. He discovered what appeared to be intentional duplication of irrelevant files, coupled with attempts to bury the hot files. Kent then used a killer ESI spoliation motion to force a high settlement.

Kent says that he later heard both outside and in-house counsel were fired because of that case. One presumes it was because their fraud was exposed, but maybe it was just because they lost, not on the merits, but because of e-discovery blunders. In any event, I felt sorry for Kent because his PowerPoint did not work properly, probably because of the Microsoft version issues, and the fact that the laptop furnished by ALM was accidentally loaded with a trial version of Vista. Personally, I now always bring my own MacAir, but even then you can still face difficulties because it sometimes won’t work with old projectors. The e-discovery presentation world is much like e-discovery itself, if something can go wrong, it usually does, and so it always pays to have a back-up plan (or two).

Two New Articles of Interest on e-Discovery Teams

I discovered two new articles this week on my favorite subject, indeed the name of this blog, e-discovery teams. The first is a cheerleader kind of easy read by Dale Buss of Corporate Counsel magazine. He quotes many in-house counsel who are pleased with their team efforts. The second article is by attorney Eric Friedberg of Stroz Friedberg. It contains legal analysis and insights into the multidisciplinary team approach. Friedberg wrote this article in connection with an event for the Sedona Conference so you know it is a serious work.

David Buss’ Article

Dave Buss’ article on e-discovery teams is entitled Keeping Your Firm’s E-Discovery In-House. It is an informal report based on interviews with in-house attorneys and paralegals already involved with e-discovery teams. It highlights a truth already known by everyone in the e-discovery world, that the legal profession is entering a Revenge of the Nerds phase of litigation. Buss reviews a few of the benefits of managing e-discovery in-house, as opposed to the more traditional solution of outsourcing everything to lawfirms and vendors.

Ross begins by noting that most corporations are just starting to realize the magnitude of the e-discovery problems they face from runaway electronic records mismanagement. This presents in-house counsel with a question of how to go about solving that problem:

Corporate counsel first must decide whether to deal with these growing demands in-house, to outsource the function — or to use some combination of internal and external resources.

Many companies still outsource everything, but a few are now doing at least some of the work themselves. They refer out less and less to outside vendors by building a strong, internal e-discovery team to do the work.

The article quotes Thomas Avery, with the e-discovery team of Aon Corp., as recommending that “legal departments establish as much as possible of the ESI-management function in-house as swiftly as they can.” The senior manager of legal operations for Raytheon Co., Woods Abbott, is said to strongly agree. So too does Patrick Oot, director of electronic discovery and senior litigation counsel for Verizon Communications. Patrick is quoted as saying, “it’s difficult to trust a third party with your mission-critical case information.” That is one reason Verizon is moving more of its e-discovery process in-house, even including many ESI review tasks. Another factor is the company’s projected savings of several million dollars a year.

Another blogger, Jerry Bull, a young e-discovery specialist and consultant in Los Angeles with an IT background, has already written about Buss’ article. See his tech oriented blog E-Discovery in the Trenches. Bull notes the trend to taking it in-house, but also correctly points out a few of the dangers and difficulties in this path:

IT departments aren’t equipped to deal with the high stakes nature of e-discovery work; and the personnel aren’t suited at all to deal with attorneys and attorney requests. I used to be an IT guy and I can tell you that we are bred with a troubleshooting mindset. Everything is up for experimentation and subject to trial and error (we deal primarily with Microsoft tools, after all). This approach simply doesn’t work in litigation.

Still, Bull appears to think it can be done with sufficient support, including full funding and staffing. As he puts it:

Planning for an in-house staff of e-discovery professionals and a handful of reliable, independent consultants will go a long way in easing the transition.

I completely agree. An e-discovery team needs dedicated, trained players, and plenty of time to practice. This is the only way to play competitively in the professional litigation leagues.

Eric Friedberg’s Article

This nine page article by Eric Friedberg, entitled New Electronic Discovery Teams, Roles, and Functions, is written in the opposite style to Ross’ work. It is based on experience and analysis, rather than interviews. It is harder to read, but well worth the effort. Although I disagree with one minor legal statement in the article concerning preservation of “not reasonably accessible” ESI, I agree with everything else, including the meat of the article, his analysis, and insights into e-discovery teams.

The article starts with the observation that many of the mistakes made in e-discovery originate from problems in communication between IT and Legal. I call this the “Who’s On First” phenomena of lawyer/tech miscommunication. Friedberg refers to Judge Scheindlin’s famous quote of the Cool Hand Luke movie in Zubulake: “What we’ve got here is a failure to communicate.” Zubulake v. U.B.S., 229 F.R.D. 422, 424 (S.D.N.Y. 2004).

He sees the best solution to this problem, as do I, in the formation of interdisciplinary corporate e-discovery teams:

Compliance with emerging electronic discovery obligations, and conducting electronic discovery in a consistent and efficient manner, requires new cross-disciplinary teams (hereinafter “New Teams”), with updated organizational roles (hereinafter “New Roles”) and functions (hereinafter “New Functions”). These New Teams often draw representatives from an organization’s in-house legal, IT, compliance, records management, and human resources departments at the corporate and business unit levels, as well as from the outside counsel and the forensic/electronic discovery vendor to whom the company looks for strategic advice.

The article points out a fundamental problem that sometimes dooms new teams to amateur status, insufficient buy-in and funding by upper management. The article points out that differing levels of support by team owners can have a dramatic impact on team effectiveness and morale:

At one end of the spectrum, senior management and the board back and fund a broad mandate to improve records management and electronic discovery processes, and support the requisite change management. In other cases, the New Team members do what they can to coordinate their respective functions but have little budget and less staffing, and struggle in tackling larger initiatives. In such cases, senior management seems to have little understanding of how records management and electronic discovery are increasingly interwoven with corporate governance, ethics, and compliance. While senior management is ultimately responsible for the increased risk inherent in failing robustly to support New Teams, the individual team members on the front lines often feel exposed in attempting to do more with less in an era of rising obligations and multimillion dollar sanctions.

The above quote demonstrates one of the strong points of this article, which I recommend you read in full; it combines strong theoretical insights with good practical observations.

The article goes on to describe the work of the team, but without the sports analogies I employed in my last article, What Game Does an e-Discovery Team Play? Friedberg focuses on the teamwork needed to create effective litigation hold procedures, new ESI archiving platforms, consistent positions in court, data mapping, and the collection and search of ESI. On these last key functions, which my article refers to as finding and picking up the ball, Friedberg points out a valid issue, or problem, which all teams must face, when and at what point to outsource:

The key consideration in establishing these New Functions is to determine where the internal IT function leaves off and when outside vendors should be utilized. Even highly-competent in-house forensic teams can not handle spikes in collections required by large civil or regulatory matters, short deadlines, or a confluence of cases. In addition, it is much more difficult to search data effectively than to collect it. There is less external training available for electronic discovery search technologies and methodologies. As a result, in-house personnel typically rely on off-the-shelf software, which may fail to properly search data or to convert data to searchable form. . . . .

Many in-house IT personnel, for example, use the Outlook client to search Outlook mail. That client, however, does not search attachments or flag items that it can not search. New Teams can address these risks by receiving outside consulting advice on acceptable protocols for searching electronic data. Determining where to draw the line between in-house and external resources is not only a technical issue. Cases that are high-profile or in which the prior role of IT has already been criticized may call for the use of independent resources.

True, true. For a good example of this, see Louis Vuitton Malletier v. Dooney & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096 (S.D.N.Y. Nov. 30, 2006). I previously wrote about this case showing incompetence by corporate IT in Louis Vuitton Sanctioned for Sand-Bagging.

Friedberg’s article concludes with a discussion of outside electronic discovery counsel, whom he calls “one of the most important New Team members.” Not surprisingly, I agree with that. I think all e-discovery teams, even experienced, well established ones, should include an outside attorney on the team. Since experienced outside counsel typically associates with and represents a number of different corporate teams, they can provide unique perspective and advice to each team they represent. Their independence can also serve an important function. It not only allows them to appear in court to represent the team, but also puts them in the best position to steer the team away from any Qualcomm-like disasters. Good outside counsel can make sure the Team plays by the rules, even in the big ticket, high pressure games where employee players may come under a lot of pressure to win, no matter what the cost. An outside attorney on the team can help keep the games clean, and steer team members away from the kind of temptations that cost Qualcomm its patent, and its GC his job. Further, this kind of high-road team participation puts outside counsel in a strong position to protest any questionable calls made by the umpire.

The article also points out the many ways outside counsel can assist a team, including important training functions:

The right counsel can facilitate the entire New Teams process, providing stewardship and key strategic advice to achieve compliance and help avoid sanctions. Indeed, New Teams are using outside counsel to train in-house Team members on emerging case law and the obligations under the New Rules. Not only does the substantive advice help the New Team, but in the event of an electronic discovery mishap, the training itself demonstrates the organization’s good faith, which is a key to avoiding sanctions.

Friedberg also notes a danger in the use of outside counsel that are also trial counsel. Personally, I do not serve as trial counsel anymore. If I appear of record in a case, it is solely to handle electronic discovery related issues. Apparently some attorneys still do both, and I admire their genius, but frankly I do not have enough time or talent for both roles. This limitation removes me from conflicts inherent in the dual role, and allows me to provide independent advice in the area of my core competency. Friedberg correctly advises a company who uses the same attorney as trial counsel and e-discovery lawyer to beware of possible conflicts of interest inherent in such a dual role:

First and foremost, a company’s outside counsel must have deep expertise in electronic discovery law and strategy. When outside electronic discovery counsel is also trial counsel, the in-house team members should closely consider whether outside counsel’s electronic discovery advice will be adversely affected by its role as trial counsel. Such an affect can take the form of over-preserving data so as to avoid any arguments that might, in trial counsel’s view, “distract” from the merits of the case. This might be the right strategy in a particular case, but it can also cost the company substantial sums of money and create stockpiles of data that are difficult to manage thereafter.

The article also points out that the e-discovery lawyer may sometimes be called upon to testify in court, and explain to a judge what happened when the team’s procedures are challenged. Here the credibility of your e-discovery lawyer becomes very important. Moreover, if a waiver of privilege is required to defend the team, it is easier to limit the scope of the waiver if the e-discovery lawyer played only a limited role in the case.

This is a balanced and well thought out article, and not simply a white paper pitch for services. Eric Friedberg also points out a problem with separate e-discovery counsel.

On the other hand, there are clearly inefficiencies in having multiple counsel, and separate electronic discovery counsel can struggle to become fully integrated in the matter so as to render their best advice.

This is very true, which is why it is important to have experienced counsel, capable of working closely with trial counsel to quickly understand the issues in the case.

Another problem which the article does not point out, is the simple fact that using multiple counsel can be very costly, and may not be practical in smaller or even mid-size cases. The services of specialty e-discovery attorneys, especially ones with sufficient knowledge and skills to serve on an internal corporate e-discovery team, can be expensive. There are not that many attorneys with these specialty skills, and all the ones I know carry a high hourly rate. Some cases are simply not worth the expense. Unfortunately, these smaller dollar value cases can still have very complex ESI collection and e-discovery issues. The proportionality limits of Rule 26(b)(2)(C) can help, but even so, costly mistakes leading to sanctions can still be made.

Here a company could help itself with retainer agreements and other alternative billing arrangements. See Eg. the Law.com Article on Mark Chandler, General Counsel for Cisco, who champions alternative fee arrangements. That way a company could always get good “off the clock” advice on complex issues whenever it is needed, regardless of the size or economics of the case. Otherwise, it is all too easy for a stupid, nothing case to explode into a nightmare, and, if your company is the defendant, force a settlement for far more money than a case is worth. We have all seen it happen, even with pro se cases, where the courts tend to lean over backwards to allow a case to go forward. Having a technology attorney on call with some kind of creative retainer agreement as Mark Chandler recommends might be a good way to avoid that trap.

What Game Does an e-Discovery Team Play?

Hide the ball is certainly not the game for an e-Discovery Team to play. Some people think that is what discovery is all about, and in the world of paper discovery, years ago, there was some truth to that. But not today, and certainly not in electronic discovery. It may be tempting to some, but if you play hide the ball in e-discovery, and get caught, you may not only lose the case, but you may lose your job, and maybe even your license. It is never worth it, just ask Qualcomm’s lawyers. Instead, an e-Discovery Team plays a series of games that culminates in throwing the ball to the other side, not hiding it.

Before you can get to the final throwing step of production of electronically stored information (“ESI”), there are a series of preliminary games to be played. Here is how I summarize the e-Discovery team playbook:

Find the Ball

Save the Ball

Pick up the Ball

Shrink the Ball

Clean the Ball

Aim the Ball

Throw the Ball

The first game of find the ball is called the Identification step in the standard industry language of the Electronic Discovery Reference Model(“EDRM”). By looking at the standard EDRM model below you can quickly see how each game represents a basic step in the EDRM.

Find the Ball

Finding the ball is far easier said then done. For most companies, the problem derives from storing terabytes of data. Imagine a string of warehouses storing a billion basketballs, and you have to search through and find the one ball among them autographed by Michael Jordan. Unless the Team is well established, you probably do not have an accurate, detailed, up-to-date map of all of the warehouses. You probably have only a vague idea where this one basketball might be located. It might be somewhere in a centralized bin, or in any one of dozens of other locations, including closets in employee homes, or off-site Internet storage lockers. It might even exist only in a shrunk down version, hiding in the pocket of one of a thousand employees; perhaps in their thumb-drive, or iPhone. Moreover, ever day a thousand basketballs are destroyed (hopefully not the one with Jordan’s autograph), and twelve hundred new ones are added. Yes, it is a very challenging game indeed

To make matters worse, you are never sure exactly what balls you are looking for, especially when the game first begins. You may have to guess, from a vague complaint, what balls are relevant. As I have written before, this is one of Anne Kershaw’s pet peeves, and rightfully so. Under federal notice pleading rules, very few details are required in a complaint to state a cause of action. So defense counsel is often left speculating what ESI will be discoverable and relevant in a new case. Still, you have to start making educated guesses to try to find the right batch of balls. From the large selection first identified, you will eventually throw a few to the other side.

The way most teams do this is to analyze the dispute to try to determine what the issues will be in the case. This gives you a general idea of the types of balls that may come into play. Then you start to determine a general time line; hopefully the potentially relevant balls will be constrained by time. You may be able to know, with some certainty, that balls made before or after a certain time are not relevant and need not be searched. An e-Discovery Team will also try to limit the search to balls made or stored by certain key players. These are the people in your company that are likely to be involved as witnesses in the lawsuit. The Team’s search should be focused on the storage bins of these key players.

Save the Ball

After playing find the ball, the next game is save the ball. Here the Team devises ways to preserve most of the balls identified as potential evidence in the last game. Again, this can be a very challenging game, especially when your company has many different auto-destruct routines in place (and most companies do).

If you think it is easy to stop all of these programs, just ask Intel. They thought they had stopped deletion of excess email for all the key players in the anti-trust case against AMD, but in fact the janitor programs remained in place for the most important players, including the top officers of the company. Their email was deleted for years after the case was filed. They tried to play a very complicated game of save the ball, but failed. For a better idea of just how difficult this game can be, check out Intel’s report to the supervising district court judge on their failed attempts to preserve evidence. This mistake has supposedly already cost Intel millions of dollars to correct by forcing them to go to their backup tapes to find the deleted emails, and the meter is still running. AMD is, of course, claiming that the error was intentional. They would like the court to enter sanctions for spoliation and turn this mistake into an outright win of the whole case.

So make no mistake about it, save the ball is one of the most important games an e-Discovery Team plays. As I have discussed before, that is why most e-Discovery Teams focus on this game as soon as the Team is formed, and look for ways to improve their company’s litigation hold procedures.

Pick Up the Ball

Again, this game sounds easy enough, you just collect the relevant ESI from the data you have identified and preserved. Seems easy, but it is not. There are tricks and traps here aplenty. If you are not careful, you could collect too much or too little. Generally you do not want to simply pick up all of the balls you have saved. That will make the next games too expensive. You want to screen out the ones that are unlikely to be needed, and probably are not relevant at all, but were preserved just in case. You want to preserve more broadly than collect because you never want to play save the ball twice in the same case. Not only is that kind of do-over expensive, but it may be futile because, in the meantime, routine processes may have deleted many balls not saved in the first pass.

You also do not want to pick up too few balls, and leave behind many that are directly relevant and should later be thrown to the other side. That kind of careless collection can also be expensive. It can force you into an expensive do-over, and open you to charges of hiding the ball. See Eg. Court Disapproves Defendant’s “Hide the Ball” Discovery Gamesmanship.

Careless collection often occurs if the Team simply delegates this function to the key witnesses, and does not properly supervise or follow-up on their ball-picking efforts. The same comment holds true to the two prior games of ball identification and preservation. The Team cannot over-delegate its responsibility to key players and then just hope for the best. These are their games, and the Team must take responsibility to see they are played correctly. That is the whole purpose of an e-Discovery Team.

For that reason, in most cases it will not suffice to simply send out a preservation letter to the key players which describes the dispute, and then leaves it to them to find the relevant balls for themselves, save them, and pick them up. Without help and supervision from the Team, the key players may not know which of their computer files are relevant, they may not know how to properly preserve this ESI, nor how to collect it. They are sure to make mistakes. Thus, when the key players in a company are called upon to take part in the games, which in itself makes a lot of sense, since they should know their own information better than anyone else, they should be given expert help and advice from the e-Discovery Team. In other words, it is perfectly all right for the Team to delegate some of this work to the key players in the litigation, but the Team must still supervise and follow-up. Ultimately the Team should be responsible, since they are trained and more experienced in collection than the key players. The Team should have personal meetings with the key players and closely monitor their activities. In many cases, the Team should also implement certain safeguarding mechanisms to supplement the key players’ efforts, such as automated copying and keyword searches.

Another common mistake made in pick up the ball is to carelessly change the ball in the very process of picking it up. You could, for instance, change the metadata of a file, such as information as to when it was last viewed, saved, or revised. This is an especially high risk when the Team attempts to rely upon key players to pick up the ball for them. Although this probably will not matter in most cases, in some cases, such as stock backdating cases, this might be very important. As a general rule, the Team tries not to change the ball too much by the act of picking it up. The Team may later strip a file of all or part of its metadata on purpose, if that facilitates later cleaning or throwing, especially if the metadata is not important in the case, or not wanted, but they never want to do it accidentally.

A final common mistake, one of my pet peeves, is to neglect to hash the ball when you collect it, and properly preserve and tie the hash into each ball thereafter. I have described the process of using hash mathematics to authenticate ESI at length in my law review article, HASH: The New Bates Stamp, 12 Journal of Technology Law & Policy 1 (June 2007). I also provide an overview of the subject in this blog. The Team may already have hashed files as part of the preservation game; but if not, it is essential that they now be hashed at the collection stage. Hashing provides a unique identifying alphanumeric value for each computer file collected. This hash value can be later checked to prove that the file has not been altered since it was collected. This is a key step in ESI authentication to allow for admission into evidence at a hearing or trial. In most cases, hashing should be a normal part of ball pickup.

Shrink the Ball

Shrink the ballis the game where the Team can save the company a lot of money. Thus, from a financial perspective, it is the most important game of all. In this culling step, you process the ESI to eliminate as much duplicate and irrelevant information as possible. Here good software and automated process are critical; so too is careful strategic thinking,

The goal is to significantly reduce the amount of ESI that must be reviewed and cleaned in the next steps. Thus, for instance, at the end of the last game you may have identified and preserved 1,000 gigabytes (1 terabyte) of ESI, and collected 500 gigabytes. To give you some idea of the amount of information we are speaking about, in some circumstances the 500 gigabytes may be equivalent to 500 truckloads of paper. It would cost a small fortune for teams of lawyers to read that much paper. We are talking about years of billable lawyer time to read that much data. It would also be a colossal waste of time because they would end up reading the same document dozens, if not hundreds of times. So it is critical to aggressively eliminate the redundant and immaterial ESI in this processing stage. In many cases the 500 gigs can be cut down to 100 or 50 gigs, resulting in tremendous savings in the expensive review games to come.

Clean the Ball

Here is where the big bucks come in, the cost to review the data for privileged, confidential, and irrelevant material. Still, most internal corporate e-Discovery Teams will not clean their own ball, they will hand it off to their caddy to do it for them, typically their outside legal counsel. A few of the more mature and well organized Teams have started to review their own data, and clean them the ESI themselves. They have teams of contract attorneys they employ to do this work at reduced rates, some even send the data to lawyers in India for review. But for most Teams, this is advanced play that they do not have the time or skill to attempt.

This is a very important and risky step in the EDRM process and companies want to be sure it is done right. You review the truckloads of email and documents that have not already been culled out in the prior games so that you can remove the files that do not have to be produced. The last thing you want to do is produce privileged materials to your adversary. You need to clean your production of these secret files and produce a log of them instead. Even with a clawback agreement, an accidental disclosure can still result in waiver of your privilege to third parties. You also want to be sure the ESI review catches all confidential materials, and that they are produced with appropriate markings and confidentiality agreements. Trade secrets can be lost forever if they become a public record by filing with a court.

Aim the Ball

Now we come to the lawyerly game of aim the ballwhere the ESI is analyzed to see how it fits into the case at hand. Here lawyers and paralegals tag each file to an issue, typically using review software. They also make final decisions as to whether and how information is responsive to discovery requests, or otherwise must be produced (or not). The files are categorized and rated for importance. Is this email a smoking gun that could kill your case, or is it merely of marginal relevance to a secondary issue? You had better find this out, and fast, as to each computer file you are about to disclose to the other side. If your analysis of the information to be produced shows you have a strong case, you will approach the case far differently than if your analysis shows you will surely lose when all of the cards are put on the table.

Obviously this analysis stage requires the sure hand and steady aim of trusted outside counsel assigned to defend or prosecute the case. Still, the legal members of the Team should assist and be involved in the analysis and evaluation of the merits of the case. This game concludes with final decisions by legal counsel on what should be produced and what should be withheld. These decisions must be rational and made in good faith.

If analysis shows you have a losing hand, you had better fold early before the other side realizes your position. You cannot do like Qualcomm and decide to withhold evidence just because you don’t like it. You can see where hiding the ball got them – they lost the patent they sued to enforce, they paid over eight million dollars in fees to the other side, their general counsel resigned in disgrace, and their outside counsel are now fighting to retain their licenses. When you are a plaintiff and find yourself in this position, you do not file the suit to begin with or, if you discover it in midstream, you should dismiss and cut your losses. The same applies when you are in a defense position. It is not an option to try and hide the evidence that will hurt your defense. You must instead try and make the most of it and settle as best as you can. That is how the American system of justice works and all Teams have to play by these same fundamental rules. Voluntary disclosure may not be the rule in the rest of the world, especially the civil law countries in Europe, but that is how the game is played here. If you are defending or prosecuting a case in the U.S., you are going to have to reveal your data to your adversary, even if that kills your case.

Throw the Ball

The last game is the culmination of all the rest. The analysis game resulted in final decisions on what files to be produced. Now you actually make the production. Throwing the ball is not really all that hard, so long as you enlist the aid of WORMs. No, not the creepy crawly kind, but the “Write Once, Read Many” times kind, such as optical discs, CDs or DVDs. The ESI on these media cannot be altered after written onto the discs, thus providing you, and the receiving party, with a certain amount of protection that the files will not be accidentally altered. Worms help the parties maintain a permanent record of the ESI produced.

Another tricky aspect of production is deciding the form of production. Do you produce in native format with full internal metadata retained, or do you produce in a TIFF or JPEG format with a load file ready for import into review software? This should have already been worked out with opposing counsel as part of the Rule 26(f) conference, or the original production request; but if not, you have to make these decisions now.

Take the time to clearly mark and label the production media. One thing I hate is a CD production with no writing on it, or just indecipherable handwriting. Write out a full description of the CD and the date of production and name of the case. Think of chain of custody issues and do not forget to make multiple copies. Another thing I have noticed lately is the use of paper labels on CDs. That’s ok, but beware of labels that peel off. As a safeguard, it is better to use ink jet printers that print directly on the CD, instead of glue on labels. If you must use adhesive labels, put some kind of writing directly on the CD itself, just in case it peels off somewhere down the line.

Finally, if you use TIFF or other image type files where you affix Bates stamp type markings to identify individual ESI files, please consider adding a truncated hash value to the file ID. As discussed in HASH: The New Bates Stamp, this will facilitate both identification and authentication, and allow for easier comparison with the native originals.

Concluding Thoughts

These games are difficult. Much like golf, it is not a game of perfect. Mistakes are inevitable. Even Tiger Woods messes up from time to time, and does not win them all, so why should you be any different? Document your efforts, play it safe, and use redundant systems whenever economically feasible. Thus, when a mistake is later discovered, you may be able to cover it with a backup system. Or, if that is not possible, you can at least show to the supervising judge that you made good faith, reasonable efforts. The judge should understand and cut you a break, maybe even give you a mulligan. If the judge does not realize that mistakes are inevitable, he or she simply does not understand the game. Then it is up to you to explain it to them, or hire an expert who can.