After five years in review, the Supreme Court amended a series of federal rules surrounding civil litigation. Included among these are an elaboration of existing rules regarding electronic discovery. Discovery is the process by which both sides of a litigation provide supporting evidence in a trial.
The changes have gone into effect as of December 1st and they require companies to keep track of employee e-mail, instant messages and other documents or communication delivered through or stored via the Internet. The industry impact is not subtle and Enterprise CMS vendors
are responding quickly.While federal and state courts have been moving in this direction for awhile, proper management of this data will now be required for federal cases.
At their risk companies can purge archives if the information isn't relevant to pending cases or expected lawsuits, but this is inadvisable as many employers make hurried or generous assessments about the appearance of the legal climate in their industries. And the law is stringent -- an IT employee who reuses the backup storage tape or media, a common occurrence, could be accused of "virtual shredding" if a lawsuit is filed, according to Alvin F. Lindsay, an expert in technology and litigation and a partner at Hogan & Hartson LLP.
This raises the question of how companies will go about adequately classifying, collecting, and archiving their data, and the answer is not always so easy or simple to divine. Martha Dawson, an electronic discovery specialist and partner at Preston Gates & Ellis LLP, says companies may not have to change much of what they're already doing. Instead they can conduct an "inventory of their IT system," setting the burden onto IT to manage information storage and create an efficient process for extensive data retrieval.
Governance, Risk, and Compliance (GRC) managers may feel the situation is a touch more complex than this, and we would tend to agree. New legislation effecting electronic data management requirements presents a host of opportunities and potential complexities for managers. These are breaking points in the norm of day-to-day operations, and junctures where new products and new processes can be introduced, with a minimum of political resistance.
Non-compliance poses some potentially serious consequences for enterprises and can be handy for driving needed operational refinements. The legislative changes will inspire some critical reconsideration of the way data is kept and stored. For a company in a non-compliance bind could be hit with adverse inference charges
, which means a jury may assume the data that was not presented contained incriminating information. A non-trivial point, we should say.
A recent Pike & Fischer poll
reports only seven percent of corporate lawyers feel their corporations meet the bar in terms of the new e-discovery guidelines. Provisions also require that lawyers know well in advance where their clients' data is stored, as well as the state of its accessibility.
The new climate presents a potential boon for enterprise CMS and records management vendors such as Open Text
, and Stellent, which bloomed
when information retention concerns peaked
following the passage of the Sarbanes-Oxley Act. Stellent has moved quickly, having recently released
an application that promises to lower costs associated with e-discovery.
InBoxer, Inc. of Massachusetts is following suit. A company whose major marketing position was coverage for Sarbanes-Oxley guidelines, they've leaped at the chance to ease the new information burden from the backs of anxious enterprises.
CEO Roger Matus reports InBoxer receives five times more inquiries than they did half a year ago for their proprietary software, which streamlines the search and retrieval process for electronically-stored information. Of the amendments, Matus notes, "Companies used to be focused on how they store information... Now they're focusing on how to retrieve it."
MessageGate, which specializes in e-mail governance software
, parses the amendments down to promote these capabilities. Their offering, in brief, helps enterprises comply with the law while respecting user privacy.
Additionally, MessageGate helps employers plan ahead for a handful of the new Civil Rules, including Civil Rule 34, which distinguishes between electronically stored information and "documents" for inspection; 26, which relates to disclosure and discovery of stored information; and 37, which has to do with failure to make the necessary disclosures. MessageGate promotes the idea of creating a "safe harbor" from sanctions that result from failure to comply to the new open-file policy.
James Wright, Director of Electronic Discovery at Halliburton Co., notes the problem will not be as simple to solve as merely storing e-mails and documents. Tougher tracking concerns include digital photos of work sites stored on employee cell phones or mobile memory cards, electronic communications passing to and from non-work devices, etc.
In a recent Washington Post article Wright also notes
that the business of "e-discovery vendors" brought in $1.6 billion in 2006, and he expects this number to double in 2007. If he's on the money, these are frothy times indeed for ECM vendors with strong GRC stories.
The intrepid (or bored) can dig directly into the new e-discovery rules
themselves, or stay tuned here as we cover the implications and vendor responses in the Enterprise CMS and Records Management space.