eDiscovery & FRCP Compliance

FRCP compliance is multi-disciplinary; Collaborative Accountability unites your efforts

Electronic Discovery (“e-discovery” or “eDiscovery”) is, at its core, the traditional pre-trial process of a party to litigation requesting that the opposing party turn over or “produce” copies of documents believed to be in that party’s possession, but updated for use in the information economy. Traditionally, the discovery process often meant one party photocopying thousands upon thousands of paper documents and after reviewing for privilege, producing to opposing counsel, wherein junior associates of the firm has the unenviable task of poring over those documents to determine which, if any, might aid their client’s matter. Overall, the process was tedious, time consuming, expensive for the client, and not even remotely noteworthy by the news media. However, as more and more discovery requests included copies of electronic documents, litigants were forced to rely on specialized vendors make such productions possible. The industry news media took notice, and, suddenly, the process became “e” discovery, with attendant notoriety. Today, with the vast majority of information appearing only in electronic form, the e-discovery process has necessitated the creation of its own industry, replete with news coverage from a wide variety of publications, conferences, seminars, webinars, podcasts and a constant stream of press releases from some 600 industry participants. The jurisprudential aspect of e-discovery has also enjoyed widespread notoriety in the legal profession since the early 2000’s, including the creation of entire e-discovery practices at some firms.

Early in the development of e-discovery, the costs for some types of electronic document requests routinely became exorbitant because the requests relied upon or resulted in the restoration of backup tapes (e-mail and document archiving systems were uncommon at that point) to make information on those tapes available to search. As a consequence, in 2003 judge Shira Scheindlin made a landmark ruling in the developing e-discovery jurisprudence as to under what circumstances the requesting party had to share in paying those costs (traditionally, the producing part had to bear them completely). The ruling, Zubulake v. UBS Warburg, and others like it eventually led to the Federal Rules of Civil Procedure (FRCP) being amended in December of 2006 to explicitly address e-discovery-related matters in the broader context of discovery. Two of the amended rules have particular significance: Rule 26 requires parties to disclose “electronically stored information” (ESI) to opposing parties, marking the first time that more than “data compilations” were required to be disclosed to opposing parties; and Rule 34, which listed possible types of ESI, such as writings, graphs, sound recordings, etc., and requires them to be translated into “a reasonably usable form” by the producing party. In the wake of those revisions, e-discovery vendors rushed to market with “FRCP compliant” solutions; as to just what that phrase means is the subject of this analysis.

Understanding FRCP compliance

Understanding the nature of FRCP “compliance” first requires a review of the applicable statutory language. Such a review reveals that the 2006 amendments do not mention the words “comply” or “compliance” as it relates to e-discovery. Rather, they acknowledge ESI as a distinct form of information subject to discovery and describe rules for addressing production, such as the cost of production being disproportionate to the value of the ESI as it relates to the matter, or the so-called “proportionality” rule. The upshot of this is that “compliance” with the amendments means an implied requirement that the producing party be able to effectively manage and produce the requested ESI from a technological and operational perspective, much like SOX 404 created an implied information security requirement for internal control mechanisms. That implied capability includes managing e-mail and document retention policies, identifying potentially responsive ESI, administering legal holds, segregating ESI in order to prevent its accidental destruction, managing forensic collections, and transforming the ESI into a reasonably useful form and producing it to the opposing party. Most importantly, there needs to be a means to holistically manage the entire e-discovery production process. In 2005 industry analysts George Socha and Tom Gelbmann created the E-Discovery Reference Model, or EDRM, that describes each phase of the e-discovery process and allows vendors to articulate for which phases that offer solutions. What has happened, however, is that managing the production (and by extension, compliance) process has been limited to managing particular phases of the EDRM, rather than the process as a whole. Every producing party, then, has to create its own ad hoc management process, and such a process overlays the EDRM, rather than being a component of it. The limitation of this is that in doing so the producing party does not have the benefit of a process that has been tested and proven over time.

Compliance challenges

A producing party (usually a corporation) will either choose to outsource the entire e-discovery production to one of the many service providers or perform most of the work in-house, and have a provider transform the result of that work into a form that opposing counsel can load and review using special review software. Many corporations are choosing the latter path at the urging of software vendors who advocate using their solutions to bring e-discovery in-house and eliminate most of the service provider costs. Regardless of the path, they will encounter several challenges that must be addressed in a consistent, repeatable and defensible manner:

Command and control. The jurisprudence of e-discovery is littered with cases where the client suffered sanctions and outright defeat because there was poor coordination among team members. An overall management system is necessary to integrate the e-discovery part of the instant litigation with other parts, such as the analysis of outside and inside counsel, deposition management, Service of Process management, attorney-client communications, etc. Such a capability gives team leaders the ability to identify shortcomings in the process and correct them before they escalate.

1. Legal Holds. Legal holds require two distinct processes: a logical process that communicates the nature of a hold to the organization, and then manages and enforces it; and a technical process that forensically preserves the ESI in question and prevents it from being changed or deleted during the course of the hold. Both processes are critical and require communication between the hold administrator and the recipients that is auditable for quality control should a breakdown in the process occur.
2. Attorney costs. With respect to the costs of production, producing parties often recoil at the expected costs of production, but in practice the vast majority of those costs (80-85%) are related to document review by outside counsel rather than the technical aspects. A mechanism, then, is needed that automatically scrutinizes invoices from outside counsel to prevent duplicative or otherwise improper billing, and to allow the client to review invoices over the long term to determine if the firm is delivering value.
3. Document sets reuse. In many instances, an ESI document set which is the same or substantially similar to one that’s already been produced will be amenable for use in litigation that’s concurrent or expected in the near future. The ability to manage the re-use of such document sets, including managing differential ESI collections, prevents the need to repeat the entire process, including costly attorney review.
4. Collaboration. The management of every matter requires constant collaboration and communication among a litigant’s team members, including inside and outside counsel, expert witnesses, members of other business units and the CFO. Add to that the communications needs of managing e-discovery productions, which by themselves entail tremendous amounts of communication as the production moves from phase to phase, and the ability to allow all team members to collaborate and contribute to specific aspects of the matter, and to do so simultaneously, becomes acute.
5. Accountability. All aspects of the management of a matter need to be amenable to audits so as to improve processes and, if a breakdown occurs, determine who did what, and when. Courts require that the compliance efforts that a party makes with respect to e-discovery obligations must be reasonable, not perfect, so when a breakdown does occur, the party has the ability to demonstrate that the overall efforts were indeed reasonable in spite of the breakdown. Such a showing may mean the difference between a crippling sanction and a mere admonition not to allow the breakdown to happen again.
6. Security. The system that supports these functions needs to allow each team member access to only the parts of the matter that are necessary for them to perform their function and integrate with existing access control methodologies, such as Single Sign-On (SSO).

All of these functional requirements need to be united by a common principle that enables the entity to carry out its many response duties consistently and in a way that protects the integrity of the processes.

Demonstrate compliance, reconstruct events, manage spend

Collaborative Accountability Applications allow team members inside and outside the enterprise to securely work in concert while enabling leaders to track actions by members in an manner that can be safely offered into evidence during a legal proceeding. Giving all team members ready access while limiting that access to only those that require it allows the team to move swiftly while preventing data from being altered accidentally. By effectively managing legal holds and forensic collections of ESI, the organization not only fulfills its discovery obligations but strengthens its defense posture should the matter ultimately go to trial. In the event that errors are made by team members during a particular production, the ability to forensically deconstruct those errors can demonstrate that, overall, the response was reasonable in light of the circumstances and the errors did not have a material effect on the outcome. Finally, CAA manages spend by enabling electronic submission of outside counsel invoices and subjecting them to review using automated business rules, thereby preventing duplicative invoices and billing for items not covered by the retainer agreement.