The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters

Electronic Record Horror

Go ahead- take a guess:

My guess is that your guess is low. Most people accumulate thousands more data files and email messages than they realize. Particularly in our business of communicating with contractors and various members of our supply chain, people can accumulate hundreds of email messages per day. Even if only a small percentage is kept, over the course of a few years, that can really add up. Example: I took a quick look at files accumulated by just one of our Contract Specialists on just one network drive and found over 13,000 files.

I am asking – because I wonder if you realize that every one of those computer files and email messages, stored in any and all locations, is subject to electronic discovery rules. This would include all copies sent to and stored by other people both within and outside of your company. That is, by order of the court, you could be required to produce electronic records stored in all locations.

Here is how one (very simple) scenario could go:

We also have to ...

Of course in order to adequately defend against this case we also would want to:

O.K., it's a bad scenario and could get a lot worse. The same liability as in the good old days of paper files - but now, with the help of powerful software tools, all files can be searched. Worse, computers and networks have made keeping old files too easy.

Evaluate the cost of reviewing all of those email messages before providing them. It's a lot of expensive lawyer time. The option - just give them everything without review, exposes us to other risks. The files would probably include garbage such as birthday announcements, but worse – the files might include references to topics the opposing counsel forgot to ask about. Lawyers call this review process; Culling, Clustering and de-duplication.

What can we do to mitigate the impact of e-discovery to us and our profession?

  1. If you company has not already started a formal records management process; start!  Make a documented decision about supply chain processes documents. Identify which documents and messages should be considered part of the record and a controlled storage location that preserves the integrity; date and authenticity. A records policy is an important part of an Electronic Commerce strategy, read more.
  2. Establish a clear document retention procedure describing how long to keep records and at what point they should be destroyed. Read Lost Record? in this newsletter
  3. Have a long chat with legal counsel and supply chain personnel about what should not be said in email messages. Read more in E-Mail Pitfall in this newsletter
  4. Remember copies of email messages probably exist in more places that you’d ever think to look and will persist for a much longer period time than you would ever expect. Cloud Computing will exacerbate this problem. Read more.
  5. Of course the most important action: start learning about and understanding the risks and issues. The internet has hundreds of articles about document retention and records programs, legal cases about e-discovery and electronic records, software vendors selling services to assist in e-discovery record searches and even government actions being taken to address electronic records.  Here is a program I presented on electronic records in 2008

More thoughts on records and e-discovery:  
 What is metadata & Why do I want to know? in this newsletter.

I copied a few interesting excerpt from recent articles below. The articles use quite a few legal buzzwords. I think it is important that we start including these concepts in our discussion about records and electronic files.

 Legal technology News web site 

“information lifecycle governance (ILG)”: the end result of ILG is to get rid of useless, non-record data, which has no business value and is no longer needed. The panelists also agreed that legal holds and proper litigation response were within the scope of an ILG project.  Documents should relevant to the business should be kept and the other garbage cleaned out - at the very least to lessen the cost and time of a discovery-order search.

The computer chip designer Rambus Inc. has long been haunted by its decision to shred hundreds of boxes of documents not long before it launched a litigation campaign against a big swath of the semiconductor industry. The latest blow came on Friday, when the judge most sympathetic to Rambus over the years ruled that the company willfully destroyed documents in anticipation of litigation and indicated that he would reduce a $397 million judgment that Rambus won against rival SK Hynix Inc. in 2009.

Reversing his own prior findings, U.S. District Judge Ronald Whyte in San Jose ruled that Rambus spoliated documents in bad faith when it hosted companywide "shred days" in 1998, 1999, and 2000. Once a lawsuit is in the works it's too late to clean house.

Rules have been developed that protect litigants from accidentally waiving privilege by inadvertently producing a privileged document as part of a voluminous electronic document production. Federal Rule of Evidence 502, for example, provides that in certain circumstances the inadvertent production of a privileged document does not constitute a waiver of privilege, even with respect to that specific document, and certainly not with respect to a broader subject-matter category. Similar "clawback" rules have been promulgated in the local rules  Notably the contrary position is also true. Information you inadvertently provide in the thousands of email messages can often be used against you, even something that might have otherwise been attorney client privileged. At the very least , a shotgun approach to providing email message could lead opposing counsel in new directions.

Understand Predictive Coding Options 
By Joshua L. Fuchs and Benjamin J. Wolinsky; Texas Lawyer September 3, 2012

In today's world, document review in any case with moderate-to-large amounts of e-data consumes a substantial portion of the litigation budget. Although the gold standard for such review long has been an exhaustive manual process in which human eyes review every document, increasing amounts of raw data frequently make this strategy a non-option. It's simple math. Imagine that a litigant collects 1 million potentially relevant e-documents — not a large amount by today's standards. The litigation team trains a room full of contract attorneys and gives them chunks of data to review. Assuming the contract attorneys review these documents at the rate of one per minute, even at $50 per hour, the initial review stage alone costs more than $833,000. Under that scenario, the gold standard earns its name, and not in a good way. There is a growing software and legal industry dedicated to finding critical information in huge volumes of electronic files.  They can help you or your opponent for a price. This cost, to review potentially irrelevant documents, makes it even more important that non-record documents be cleaned up on a regular basis.

What is Predictive Coding? Predictive Coding is a court-endorsed process that combines people, technology and workflow to find key documents quickly, irrespective of keyword. Due to its massive accuracy and efficiency gains, Predictive Coding is revolutionizing how Early Case Assessment (ECA), analysis and document review are done. Predictive Coding has three components:

PredictCase experts use Predictive Analytics to find key documents quickly and irrespective of keywords. CodeKeyword-agnostic machine learning finds other relevant documents. Process Proven workflow with integrated sampling delivers results to a statistical certainty.  Recommind developed Predictive Coding in partnership with some of the world’s leading enterprises and law firms. Recommind customers have been using Predictive Coding for the past 5 years.  This is one company who can find that incriminating email in the pile of straw.

What is Technology Assisted Review?

Technology Assisted Review (TAR), also known as Computer Assisted Review, is not Predictive Coding. Technology assisted review includes aspects of the non-linear review process such as culling, clustering and de-duplication, but TAR does not meet the requirements for comprehensive Predictive Coding as outlined above. I love the legal lingo! "de-duplication'.

ABA Journal 

A Technology-assisted review  Still Searching: Computers Change the Role of Lawyers in E-Discovery 

TREC Legal Track: The National Institute of Standards and Technology and the U.S. Department of Defense co-sponsor the Text REtrieval Conference (TREC). TREC's website notes it was created to "support research within the information retrieval community by providing the infrastructure necessary for large-scale evaluation of text retrieval methodologies."

White House directive: 8/24/2012 M-12-18 

This Directive requires that to the fullest extent possible, agencies eliminate paper and use electronic recordkeeping. It is applicable to all executive agencies and to all records, without regard to security classification or any other restriction.

1.1 By 2019, Federal agencies will manage all permanent electronic records in an electronic format.  By December 31,2019, all permanent electronic records in Federal agencies will be managed electronically to the fullest extent possible for eventual transfer and accessioning by NARA in an electronic format. By December 31,2013, each agency will develop and begin to implement plans to achieve this transition. Agencies should also consider the benefits of digitizing permanent records created in hard-copy format or other analog formats (e.g., microfiche, microfilm, analog video, analog audio).

1.2 By 2016, Federal agencies will manage both permanent and temporary email records in an accessible electronic format  By December 31 , 2016, Federal agencies must manage all email records in an electronic format. Email records must be retained in an appropriate electronic system that supports records management and litigation requirements (which may include preservation-in place models), including the capability to identify, retrieve, and retain the records for as long as they are needed. Beginning one year after issuance of this Directive, each agency must report annually to OMB and NARA the status of its progress toward this goal. 

Article by Rob Hellewell Published: January 11, 2012.

 Obama Directive Alters Federal Record Management And E-Discovery Landscape

With the stroke of a pen, the Obama administration has ushered the federal government into the Digital Age. On November 28, the President issued a memorandum mandating new rules, procedures, and deadlines for overhauling the government's record management system, kick-starting the federal government's transition to a digitized recordkeeping environment. In what the memorandum describes as "a 21st-century framework for the management of Government records," 480 federal agencies will be required to begin the migration to electronic recordkeeping, creating better management systems for emails, social media, and cloud-based information.

However, as NARA's 2010 Records Management Self-Assessment Report revealed, agencies' records management programs "do not ensure that email records are preserved in a recordkeeping system" and "do not monitor staff compliance with email preservation policies." In fact, many agencies "have policies that instruct employees to print and file email messages." These practices hinder the government's ability to meaningfully store and share information. Perhaps the memo is referring to a recent high-profile False Claims Act case, United States v. Honeywell International, Inc.

In that case, Honeywell has accused the government of destroying countless records due to a failure to issue a legal hold preserving documents relating to the company across 36 agencies. The government eventually had to admit that the litigation hold order for electronic records was ineffective - they government lost.

It's a lot of information and we need to consult with knowledgeable legal counsel before implementing a process. By getting a little more familiar with the terminology and options, we can start asking the right questions.  My recommendation - start asking question now.

Hope it helps.!

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Mike Taylor

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