e-Discovery is normally thought of as a legal process related to the identification, gathering, analysis and transfer of data (e.g., documents and email) for lawsuits and other legal matters but though that is true, e-Discovery is at its core, a risk management issue.

Proactive Steps Reduce Risk

Companies that are involved with legal matters are usually in a reactive mode when performing the steps related to e-Discovery but that reactive nature creates additional unnecessary time, tasks, legal risks and expense.

To minimize these inefficiencies, possible increased legal liabilities and higher costs, an intelligent and well-planned risk mitigation plan should be instituted -- which is as simple as implementing proactive e-Discovery steps. That is, putting a plan in place to identify, gather and analyze data in a cost-effective yet defensible (able to withstand legal challenges) manner.

This may seem easier said than done because of natural factors in business such as the ever growing accumulation of data. As more and more data is created every day, both by users and systems, the policies and processes to handle e-Discovery become more challenging, and being proactive with e-Discovery requirements also becomes even more important.

Also, as an aggregated mass, the corporate data to be identified, gathered and analyzed for e-Discovery purposes are effectively complex datasets that cannot be handled by ordinary business intelligence tools -- those datasets are the legal practitioners’ version of Big Data.

Since virtually all discovery actions now include e-Discovery (including all lawsuits or other legal matters involved such items as electronic mail, digital documents and database records), it is critical for organizations to think about these “legal big data” issues in terms of e-Discovery proactivity.

shutterstock_120588736.jpgThat means enterprises should ensure they have effective policies in place to handle document creation and retention. This is a fundamental way for the organization to manage the risks involved in e-Discovery by minimizing the data that is retained for normal business purposes to only important emails, documents and database records.

Enforce Limits to Minimize Data

The less information maintained during normal business circumstances, the less data there is to be identified, gathered and analyzed for e-Discovery purposes. And the less data involved in e-Discovery means lower overall legal expenses with respect to, lawsuits and regulatory matters.

Further, by instituting (and enforcing) a controlled, mature and well-messaged document management policy, an enterprise is better positioned to minimize the risk of disorganized and unplanned eDiscovery processes. Of course, this type of diligent document management policy requires teamwork between leaders in Information Technology, the Legal department and management.

Another way an enterprise can reduce risk of expensive and sanctionable e-Discovery processes is via good document creation guidelines bolstered by employee education. Document creation guidelines include minimizing the volume of documents created and stored by users and systems.

It seems difficult to imagine asking users to create less data -- but once messaged internally as a risk-management initiative and with the appropriate education, users typically will conscientiously store less unnecessary information in permanent sources. For example, users will think twice before sending an email about a particular subject that can easily be managed via a quick telephone call or will keep fewer versions of document drafts than absolutely necessary.

Tools and Aids

Of course there are technical checks as well that may be implemented such as email account storage size limits and forced IT policies regarding where data may be saved (e.g, centralized storage areas) but these technical implementations must be balanced with the needs of the business so that they do not become a burden to user productivity.

Enterprises can also help mitigate the risk of creating and retaining too much unnecessary data by establishing a data or document classification system to help ensure that only items that must be retained are archived and everything else is eventually purged. Again, the less data maintained, means less unnecessary e-Discovery expenses and potential liabilities.

By adding proactive automated classifications using database systems and by running analytics (e.g., relevance coding), enterprises can comply with legal preservation requirements without paying for large volumes of subsequent documents review (i.e., during a reactive e-Discovery process).

By creating an effective proactive e-Discovery plan and involving appropriate staff and technology assets, enterprises will reduce their overall legal spend and minimize liabilities resulting from disorganized and reactive (i.e., mostly ad-hoc) e-Discovery processes.

Once a matter is active (say at the time a legal issue begins) additional steps such as the components of the proactive e-Discovery plan, that are spawned at the beginning of a new legal matter include leveraging employee expertise via data response teams, employee interviews and manager consensus.

Of course the right cost-effective and defensible in-house e-Discovery tools and processes along with guidance from the company’s attorneys also go a long way to help supplement an already diligent and efficient proactive e-Discovery plan.

Image courtesy of Africa Studio (Shutterstock)

Editor's Note: To read more about trends in e-Discovery, see Ajith Samuel's E-Discovery Trends for 2013