Guidance Software Delivers New Approach for Effective In-House e-Discovery

PASADENA, Calif., Aug 31, 2010 (BUSINESS WIRE) -- Guidance Software, Inc. /quotes/comstock/15*!guid/quotes/nls/guid (GUID 5.02, +0.08, +1.62%) today delivered a new unified e-discovery software platform that provides legal and information technology (IT) teams with an in-house electronic discovery system that enables better case decisions, faster, while reducing risk and lowering costs.

Guidance Software's EnCase(R) eDiscovery version 4 provides a single, unified solution that addresses all of the stages of the electronic discovery process that organizations want to bring in house. With EnCase eDiscovery, risk and costs are lower because organizations don't have to spend time or money trying to integrate incompatible point solutions for each step in the e-discovery process, or transfer data between, and train users on, disparate systems.

EnCase eDiscovery also offers the industry's first "true early case assessment" by allowing legal teams to analyze and review data at any stage of the electronic discovery process, enabling better case strategy decisions to be made faster.

Understanding the Data Universe Drives Better Case Strategy Decisions

EnCase eDiscovery enables enterprises to understand what their data universe looks like, who has what data and how much they have -- all available early, before collection and processing of data occurs. Users can quickly identify relevant data sources, get metrics on total data versus potentially relevant data, and understand how much data could be eliminated, which provides a solid understanding of the case's potential costs, keywords and custodians.

With this unique capability, corporate attorneys can test search criteria before electronically stored information (ESI) is collected, and customers can determine how to negotiate search terms, date and time criteria and file types before they meet-and-confer with opposing counsel. Through this optimized process, enterprises gain clear advantages with assessment before collection -- unlike other solutions that first need to have collection and processing complete before any analysis can be conducted.


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Piloting E-Discovery Rules in the 7th Circuit

Magistrate Judge Nan Nolan of the U.S. District Court for the Northern District of Illinois had a long background as a criminal defense attorney before becoming a judge. She says that her background left her unprepared for the battles over discovery of electronic evidence she has encountered in the world of civil litigation. "I was not able to get my arms around all of the fighting over discovery," she says. "I know that some people have snickered about this idea that you can get lawyers to make nice and cooperate on discovery. But I believe it is possible."

Under the leadership of Chief Judge James F. Holderman, Nolan has helped launch a pilot program to address electronic discovery issues: 7th Circuit E-Discovery Pilot Program. Taking their cues from, among other sources, the Sedona Conference Cooperation Proclamation, the 7th Circuit E-Discovery Committee is attempting to fix some of the most intractable discovery problems in litigation.

Amendments to the Federal Rules of Civil Procedure put in place at the end of 2006 were supposed to force lawyers to meet and hash out discovery issues early. However, Nolan, Holderman and other judges are frustrated that despite the rule changes, electronic discovery continues to be an expensive and inefficient process in need of reform. "The central premise of the 2006 amendments is to meet and confer with the other side and settle issues early," says Magistrate Judge John Facciola of the U.S. District Court for District of Columbia. "The fact that this project exists suggests that the hopes have not been fully realized."

The 7th Circuit sought to involve all parties in the process, including trial judges and lawyers, whether they are in-house counsel, private practitioners, government attorneys, academics, or litigation consultants. An effort was even made to bring litigants into the process, so the clients’ perspective could be heard. But as is often the case when lawyers confront discovery issues, discussions became so heated that Nolan had to step in to mediate so that a final project proposal could be drafted. "I had to do some mediation to make sure all sides got heard," she says. "It was a little trying, but it was probably good for everyone to find out they could confront the issues and not have everything implode."

The 7th Circuit, which covers the states of Illinois, Indiana and Wisconsin, launched the E-Discovery Committee in May of 2009 to take action to reduce what was perceived to be the rising burden and cost of discovery. They produced a set of principles, which provide discovery guidance for lawyers in cases that parties agree to litigate as part of this project. Nolan says that since the project has been implemented there has been very little conflict over discovery. "I think it is working, because of every case I have heard in this project, I have not had one [discovery] motion," she says.

However, the court has only just concluded phase one of the project and a new, two-year phase two should begin this fall.

Phase two will increase the number of cases, as well as participating lawyers and judges, and incorporate suggested changes from the first phase. The first phase was relatively limited in scope, so that the feedback and surveys did not always provide meaningful data. The committee hopes that with more participants, they will get more meaningful survey results and feedback to further refine and improve the project’s guidelines.

What do lawyers need from the bench to navigate e-discovery disputes? The pilot project explicitly states that "an attorney’s zealous representation of a client is NOT compromised by conducting discovery in a cooperative manner," creating a foundation for a cooperative process. "The key is that it sets out that noncooperation is sanctionable," says Steven Teppler with Edelson McGuire, who is a member of the committee and had several cases that were part of the project. "How can you do discovery if the other side won’t? But if it looks like it will be a fair process, then it makes parties less obstinate."

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Getting Ediscovery to Work for You

Locating, securing and producing all the electronically stored information required in the discovery phase of civil litigation can be very time consuming and extremely expensive. However, failure to produce the required information in a timely fashion can lead to fines running into millions of dollars, thanks to revisions to the Federal Rules of Civil Procedure that came into effect in December 2006.

Many companies still deal with e-discovery obligations by outsourcing the process to external specialists, who may charge between $250 and $1,400 per gigabyte to sift through corporate data, collect what is relevant, and get it in to a form that can be submitted to lawyers for review. In the past five years, an increasing number of companies have begun treating e-discovery as a routine business process that can be performed in-house. Many of these companies use e-discovery software to help carry out this business process more efficiently.

E-discovery software is designed to enable the efficient undertaking of various stages of the e-discovery process defined in the Electronic Discovery Reference Model (EDRF), which establishes guidelines for e-discovery. These stages include the identification, preservation, collection, processing, review and analysis of corporate information. Research house Gartner said e-discovery solutions may cost more than $500,000, but in some organizations they can pay for themselves in as little as three months or after a single big law case. That's because the cost of software can be offset against fees that would otherwise be paid to outside service providers to process data for discovery and against the reduction in legal fees charged by outside attorneys reviewing large amounts of written electronic material. Little wonder the market for e-discovery software is expected to grow more than 20 percent per year for the next three years, according to Gartner estimates.

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Don't Lose Sleep over U.S. e-Discovery Nightmares

E-discovery has been a hot topic ever since changes made to the U.S. Federal Rules of Civil Procedure broadened the scope of electronic evidence back in 2006.

But Canadian IT departments shouldn't lose sleep over e-discovery nightmares taking place in the U.S., according to one lawyer with experience practising on both sides of the border.

"The sky is not falling, No. 1," said Stephen Maddex, associate in the Commercial Litigation Group at Lang Michener LLP in Ottawa, who is a member of the bar in Ontario and Texas.

"No. 2, organization is key," he said. "The more businesses do get organized, the simpler it all becomes."

Broadly speaking, there are two major differences between general Canadian practice and the U.S. federal rules, said Maddex.

One is the scope of discovery. "In the U.S., you can ask for pretty much anything, which is why e-mail has become such an important problem there," he said. But Canadians "don't have that same problem because the scope is narrower."

For example, in the U.S., a company may be asked to file through its entire database and produce everything it has, which could be billions of e-mail messages, he said. "The cost to go through that and figure out what you need and what you don't need to provide is extremely expensive," he said.

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'Pension Committee' Clarifies E-Discovery Requirements

In a bombshell opinion and order issued just weeks ago by U.S. Southern District of New York Judge Shira A. Scheindlin, litigants and lawyers have been admonished (again) about their discovery obligations, particularly, to preserve, collect and produce electronic documents, records and data in their possession, custody, or control. Scheindlin, one of the foremost experts on the law of electronic discovery, was the author of the Zubulake line of decisions that many say ushered in a new era of robust electronic discovery. Now, her new blockbuster is the Pension Committee decision,[FOOTNOTE 1] which carries the picturesque title, "'Zubulake' Revisited: Six Years Later." Pension Committee promises to be a guide and oft-cited framework for complying with electronic discovery requirements.

Since the new decision copiously analyzes a series of discovery failures that led to sanctions against numerous plaintiff-companies, it is a practical roadmap on how real people and real attorneys may be confronted by real challenges regarding compliance only to wind up making judgments that come back to haunt them.

Pension Committee also is a kind of "how-to" manual setting forth key principles relating to issuing, monitoring, and enforcing litigation holds, discharging preservation and search techniques, and documenting appropriate behind-the-scenes conduct so that the responding party can withstand accusations of insufficient disclosure by the adversary. Then, too, there is advice regarding sanctions, what needs to be proved and by whom, the criteria of "relevance" and "prejudice," the legal behavior standards of negligence, gross negligence and willfulness, available remedies and, even, the text of an actual spoliation instruction.

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Survey Finds 73 Percent of Enterprises Plan to Bring E-Discovery In-House in Response to Rise in E-Discovery Requests

Clearwell Systems, Inc., a leader in intelligent e-discovery, today announced findings from a survey conducted in partnership with analyst firm Enterprise Strategy Group (ESG). The survey, titled "Trends in Electronic Discovery: A Market Perspective" quantifies both the rise in e-discovery and litigation over the past year. Additionally, the survey findings reinforce the need for increased enterprise readiness to manage the expected growth in volume of cases in 2010.

It has been three years since the U.S. Federal Rules of Civil Procedure were amended with provisions centered on discovery and management of electronically stored information (ESI). In the same timeframe, the macroeconomic climate went from explosive growth to recession, forcing organizations to cut costs as quickly as possible. As companies continue to operate in cost containment or reduction mode, they are changing the way they conduct e-discovery, moving away from a primarily outsourced approach to bringing core elements of e-discovery in-house. The intersection of these two industry trends led ESG and Clearwell to survey over 100 Fortune 2000 enterprises and government agencies.

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How Far is Too Far in E-Discovery?

In oral arguments last week, the Texas Supreme Court wrestled with how far courts should go in allowing electronic discovery.

In Re: Weekley Homes LP raises an issue of first impression for this state's Supreme Court: Can a trial court order one litigant in a civil suit to provide a court-appointed computer forensic expert access to its computer hard drives for mirror imaging and searching, if the opposing side pays the costs?

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Recession Affecting E-Discovery Providers

Economic belt-cinching has hit some electronic discovery firms, prompting layoffs and rumors of realignments.

Rumors of recent layoffs at i365, a Seagate Technology company, were confirmed by a spokesman who declined to provide details.

"We're not able to disclose any specific numbers about our recent realignment," said John Sun, spokesman for i365, a data retention and recovery company.

Read more at Law.com.

Kazeon Cuts Costs of Entry-Level E-Discovery

As e-discovery becomes a must-have application and more vendors enter the market, e-discovery specialist Kazeon Systems Inc. today introduced several new licensing models and drastically cut the entry price for companies looking to get started using the software to protect themselves during litigation. With a variety of new e-discovery services and applications competing for a piece of the growing market, Kazeon's move may be the first salvo in a new e-discovery price war.

Kazeon has been charging $80,000 for a server license. Under the new pricing models, customers can get started using the company's software for $10,000, says Karthik Kannan, vice president of market and business development for Kazeon. "We don't want e-discovery to be a multimillion-dollar, six-month process," he says.

Read more at Byte and Switch.

Court Affirms Order Requiring a Non-Party to Spend $6 Mil. to Comply with e-Discovery Subpoena

Appellate courts do not often weigh in on e-discovery issues, but when they do, it is a big deal. The United States Court of Appeals for the District of Columbia did so on January 6, 2009, when it issued an opinion on e-discovery and sanctions. In re Fannie Mae Securities Litigation, _ F.3d _, 2009 WL 215282009, U.S. App. LEXIS 9 (D.C. App. Jan. 6, 2009). Typically, I would be glad to have a Circuit Court opinion on e-discovery. Not so here.

Unfortunately, In re: Fannie Mae Securities Litigation sets a troubling precedent in favor of enforcing exorbitant e-discovery costs. In this case, the Office of Federal Housing Enterprise Oversight (”OFHEO”), was required to spend six million dollars, representing nine percent of its total annual budget, just to comply with a subpoena for electronic documents. Although OFHEO clearly had relevant information to the multidistrict litigation against the Federal National Mortgage Assn. (”Fannie Mae”) and the Federal Home Loan Mortgage Corp. (”Freddie Mac”), they were not a party to the litigation. This fact, coupled with the high expense involved in an over-broad e-discovery request, did not seem to concern the court, which is why this decision is troubling.

Read more at e-Discovery Team.

Top 10 Trends for eDiscovery in 2009

The folks at Clearwell Systems, whose platform works to streamline the eDiscovery process, have looked into their crystal ball and have offered a few predictions for the new year. Among them, trends that respond to financial and legal stresses as well as a need for more collaboration. The most compelling of their predictions lay within the realm of compliance and technology.

For the most part, there predictions aren't surprising our outrageous. They take aim at the very crux of what eDiscovery proselytizes -- show your work, collaborate, adapt and take control!

Drum roll please -- Top 10 Trends for eDiscovery in 2009:

1. Government Investigations Increase: If you thought 2008 had a lot of law suits, you ain't seen nothing yet. An increase in economic tensions and the increase in high-profile scandals will most probably lead to a rise in government data requests, compliance audits and investigations from both a state and federal level.

Click here to see the other 9 top trends.

Psystar Case Reveals Apple's Weak E-Discovery Practices

Apple has sold enterprise-class storage hardware and software for years, but the company has yet to embrace systematic e-mail and document retention policies that are common among publicly traded companies.

According to a recent legal filing (page 7) in the Psystar vs Apple antitrust case, Apple employees are responsible for maintaining their own documents such as e-mails, memos, and voicemails. In other words, there is no company-wide policy for archiving, saving, or deleting these documents.

E-Discovery Requests Loom for Financial Services Firms

As regulators delve into firms' archives to try to pin down responsibility for the current financial meltdown, experts anticipate that litigation will rise sharply. The FBI already announced that it is investigating Freddie Mac, AIG and Lehman, and it is expected that countless other firms will be asked to produce data to support other investigations.

Vivian Tero, program manager for compliance infrastructure at research firm IDC, says e-discovery already has risen on Wall Street's priority list. "The selling cycle [for e-discovery products and services] has become shorter. The need is immediate -- firms have regulators breathing down their backs," she explains. "Many companies are very worried and concerned, and want systems to respond [to potential e-discovery requests]."

iPods Helping Criminal Investigations

Some months ago we reported on the use of iPods as an educational tool, and provided information on schools and universities that have incorporated this technology for the benefit of their students. Our report today involves a more complex use of iPods; iPods used by investigators to collect evidence and by defense attorneys. iPods' storage capability and functionality makes them a perfect device for defense attorneys and criminal investigators. They are inexpensive technology to record or format lengthy information. Maybe its creators did not envisage iPods for purposes other than entertainment but, as my grandmother said, a chair can help reach higher places.

In 2006, a U.S. District Court judge in Toledo, Ohio, approved the purchase of six iPods and power adaptor to be used by defendants in a multi-count drug conspiracy case. The goal was to provide the iPods to six defendants so they could listen to the FBI's wiretaps of their conversations before the case went to trial. Defendants were to listen to these wiretaps either at the U.S. Marshal's office -those detained- or at their defense attorney's office. Formatting the wiretaps into CDs cost the tax payers between $80,000 and $100,000 while the iPods and power adaptors cost less than $2,000 (about $330 per iPod). Content from 13 CDs were inexpensively downloaded in each iPod. One of the defense attorneys in that case said "the iPods are easy to use, save a lot of money, and control access to the information pursuant to the orders of the court. This is a promising solution to a real practical problem." Most of the defendants in this case were convicted; and, as for the iPods, it is not reported but our guess is that the court kept them; not the defendants.

Criminal investigators are also using iPods to record conversations; video-tape certain scenes; and take handy photographs; all these with an innocent-looking device. iPods can store movies, encrypted files, contacts, calendar information, etc., and this data can be later downloaded in a PC. Forensic experts have revealed that iPods have some special features that allow certain content to be hidden so secret information is not noticeable. Experts from Kroll Ontrack, a computer forensic company, state that iPods can serve as external hard drive to a host computer so files can be transferred through programs such as Windows Explorer, instead of iTunes. Kroll Ontrack has conducted forensic examinations on iPods and recommends considering the following issues when an iPod forensic investigation is conducted,

Lawsuit Tsunami: Good for E-Discovery?

Lawsuits driven by the financial crisis may be good news for companies that sell electronic discovery software and services.

As InformationWeek reported yesterday, the tech sector hasn't been immune to the stock market slide. But one segment may find its fortunes bolstered by the turmoil. E-discovery vendors stand to benefit as a tsunami of lawsuits washes over the financial services market.

An Associated Press story reported yesterday that state governments are suing or considering lawsuits against various actors in the financial crisis, including investment banks, bond ratings agencies, and agencies such as Fannie Mae and Freddie Mac.

Why Records Management?

Recent events are changing the corporate e-discovery climate, causing some business leaders to question the effectiveness of an ad-hoc, “on-the-fly” approach. As high profile cases, including Qualcomm (“Qualcomm and Attorneys Sanctioned for ‘Monumental’ E-Discovery Violations,” Findlaw, 2008 ) and Morgan Stanley (“Morgan Stanley to Pay Millions for E-Mail Mismanagement,” E-Discovery Law, September 2007), have highlighted, waiting until the subpoena arrives and assuming that IT can quickly and easily make the requested materials available--and have the ability to preserve them--is an increasingly tricky bet.

IT analysts, such as Gartner, have long advocated the cost and risk savings available by taking a proactive approach to e-discovery and using an archive with solid records management policies. However, despite numerous cost justification case studies, the adoption rate of this technology has been relatively slow. But this might change in short order, as recent e-mail and IT-related fiascos, including Bear Stearns (“Two former Bear Stearns hedge fund managers indicted,” Los Angeles Times, June 20, 2008) and the White House (“Where Are the White House E-Mails?” Time, Jan. 23, 2008), have left corporations scrambling. It seems that nothing speeds corporate action faster than legal challenges with major cost and negative publicity implications.

Will the “summer of shame” (sub-prime fallout and the continued government e-mail scandal) finally turn the procrastinators into proactive managers of electronic records? Or will we continue to see corporations wait for the inevitable subpoena to happen before taking action and pay the price? Only time will tell, but one fact is clear: In today’s corporate climate, electronic records management solutions have never been more in demand.

FORENSICS SOFTWARE A VITAL TOOL IN FIGHT AGAINST COMPUTER CRIME

South African companies that want to protect their businesses against computer-related crimes such as fraud and data theft should invest in enterprise forensic software tools that allow them to investigate security breaches and acquire evidence against wrongdoers that will stand up in court.
That's the word from Derek Street, product manager at SecureData Security. He says companies face a range of business risks around their data and IT infrastructure, including theft of intellectual property, white-collar crimes such as fraud, human resources violations, and employees using enterprise computers for illegal or immoral activities.
One of the enterprise's most effective tools against the risks of employees abusing corporate data and computers is offer them the certainty that they will be caught and punished for their actions. Companies therefore need to be able to uncover who was responsible for criminal acts or transgressions against corporate policy and provide solid evidence that can be used to prosecute them or dismiss them.
To address these challenges, companies should look for network-based forensics solutions that provide complete network visibility, and comprehensive, forensic-level analysis of servers and workstations anywhere on a network, Street adds. Such a solution should be able to securely investigate/analyse many machines simultaneously over the LAN/WAN at the disk and memory level without disrupting operations, causing downtime, or alerting the target that he or she is under investigation.
It should also as far as possible, automate time-consuming investigative processes, incident response and eDiscovery. These tools can provide detailed information across the lifecycle of a document, such as who accessed, created or edited a document, whether it was printed or emailed (and by who), and much more, often even if the user has deleted information in a bid to cover his or tracks.
One of the important things to look for in a forensics tool is a track record with courts and law enforcers around the world, proving its ability to acquire data in a forensically sound manner, says Street.

E-Discovery Response Requires Navigation

A company that responded to a discovery request by turning over more than 400,000 pages of undifferentiated documents in an electronic format must provide a "modicum" of guidance about how the material was gathered and organized, a federal magistrate judge has ruled.

Magistrate Judge David E. Peebles ruled that Pass & Seymour, a Syracuse, N.Y., business, failed to either categorize the information under the document headings requested by Hubbell Incorporated, the defendant in Pass & Seymour's copyright infringement action, or to organize the data in an intelligible way.

Hubbell asked for information in what Magistrate Judge Peebles called 72 "wide-ranging and broadly worded" categories. In response, Pass & Seymour delivered the documents in 220 unlabeled computer folders -- the way the company said they were kept in "the ordinary course of business."

Peebles said that was akin to receiving 405,367 pages of documents stuffed into more than 80 bankers' boxes. As such, the response did not meet the company's obligation under the recently amended Rule 34(b)(2) of the Federal Rules of Civil Procedure.

"A party who in response to a discovery demand has chosen to produce documents as they are ordinarily maintained must do just that - produce the documents organized as they are maintained in the ordinary course of producing party's business, with at least some modicum of information regarding how they are ordinarily kept in order to allow the requesting party to make meaningful use of the documents," the magistrate judge wrote in Pass & Seymour v. Hubbell Incorporated, 5:07-cv-00945.

To make information meaningful, parties have to provide their adversaries with some context to help them navigate their way through it, according to the magistrate judge.

e-DISCOVERY DRIVES LEGAL COSTS UP

As it turns out, companies don’t usually understand the importance of knowledge and document management, until they are legally required to find and hand over all documents. The process of ediscovery is usually complicated by the fact that companies don’t know where their information lives.

Or so says a recent study by the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System.

Turns out, many companies are still not in the habit of retaining and organizing their documents in a logical structure. In fact, it’s so hard to uncover materials related to the legal cases that costs are rising as a result. Out of the 1,400 lawyers surveyed, 87% said that electronic discovery is too costly and driving up the price of litigation.

This is not due to their lack of concern for the nature of the marketplace; it is more from a reactionary model as opposed to a proactive one. In most cases, online documents, emails, policies, procedures don’t often live in a well-laid out, easy-to-find format.

Companies are simply not prepared, when it comes to organizing and storing documents.

The study also says that “without a proactive approach to retaining and organizing their electronic documentation, the company has just grown that litigation cost exponentially”.

Such a proactive approach involves the following:

• 
  Storage structure: Implement a formal and stringent document control system, so that costs to litigate can be diminished.
• Searchability: Now that information has been organized sufficiently, make it searchable. Often determining your search terms can help with the organization of documents. Create an organized electronic database or a document retention platform with the ability to quickly search for items. Allowing lawyers to perform a detailed search using document criteria, metadata and content simply saves both parties money.
• Retainability: Have a retention policy in place, which immediately executes “save everything”. Once a company has been served, it must retain all documents related to the litigation. When considering an electronic document management system, one that meets your retention criteria is the best.

These proactive initiatives will save you money should legal issues arise. They will also keep you and your company organized and up-to-date on policies and procedures. Good knowledge management has a funny way of keeping out of trouble.

PREPARE FOR e-DISCOVERY REQUESTS TO AVOID DISASTROUS LEGAL SANCTIONS AND FINES

If your company was hit with a lawsuit, would you be prepared for an e-discovery request? For instance, does your company have formal e-discovery policies? Do you know what data to store and how long to store it? Does your company provide employees with e-discovery training?
When we surveyed 711 TechRepublic members about e-discovery, we found that many of their companies were ill prepared for e-discovery requests.
Without policies and procedures in place, you could be setting your company up for huge fines and sanctions.
Here’s an excerpt from the E-discovery Special Report, which demonstrates why IT leaders should know the ins and outs about e-discovery:
“…recent decisions in Federal courts, as well as changes to the Federal Rules of Civil Procedure, reflect a shift toward holding respondents — the providers of information requested during discovery –responsible to pay for producing ESI. This responsibility is based on the assumption that a reasonable IT manager understands the need for knowing where his or her organization’s information is kept, whether it should be accessible during discovery, how to provide an environment in which documents and other information can be easily placed and kept on ‘legal hold,’ and the how to implement and use the tools necessary to provide them on demand.”