Essays

Here is the last batch of takeaways from my briefings at the recent ILTA 2010. I have been able to schedule deep dives on some of the new offerings, so I hope to bring you more details on the new toys.

eDiscovery is one of those markets that feels like it fits into the traditional software world, but has enough idiosyncrasies to require expert services. Those services have usually come from law firms, EDD service providers, or consulting companies. Such companies offer experienced litigators, forensic examiners, project managers, and other eDiscovery-related experienced professionals that are critical to executing processes correctly.

While pontificating on industry trends at ILTA, I joked that Fedex was the ultimate beneficiary of corporations that take their eDiscovery to the Cloud. Scant weeks later, my good friend Pete Pepiton at Mimecast responded to my ad hoc remark with the headline, “Fedex’s Profit Doubles”. We have had various Secure File Transfer Protocols for years, yet the practical bandwidth limitations of most internet transmissions have taught us not to try sending more than 5 GB of files via the web. In plain language terms, the web was just not designed for the kind of large file burst capacity transfers that typify an eDiscovery collection. There is a good discussion of these limits by Stacey Higginbotham here.

Officially, the U.S. recession started in December 2007 and ‘ended’ last June. Unofficially, we all know of talented people who are still looking for work. Anecdotally, the eDiscovery market seemed to bottom out in the third quarter of last year. I know that I saw a lot more resumes floating around LegalTech 2010 than in previous years. That led me to wonder who had closed shop or been acquired in the last couple years. I figured that one of the better ways to chase this list down would be to compare the LTNY Exhibitor lists from year to year. This exercise turned up some interesting numbers and facts.

While reviewing this morning’s eDJ web findings, I came across a good case analysis by K&L Gates regarding a privilege waiver issue in DeGeer v. Gillis, 2010 WL 3732132 (N.D. Ill. Sept. 17, 2010). The actual opinion seems to only be available through Westlaw at this time, but the analysis of the fact pattern and findings are worth a read. An eDiscovery consulting firm employee used his work computer to send privileged email to his own counsel. These emails were later produced in the computer image and the subject of the waiver dispute. The decision pivoted on the question of how the employer interpreted their computer usage policy. This particular case highlights the inherent conflict between the U.S. corporate usage policies and employee privacy.

The Cowen Group recently put out some very interesting research showing that 87 of the AmLaw 200 law firms have eDiscovery practice groups. The next step in Cowen’s research is to look more granularly at what those groups are doing, investments those groups are making in technology and people, and the level of authority and traction the groups get within the firms. I think this statistic points to the beginning of some maturation in the eDiscovery practice realm. While one might say that the real sign of maturation will be that close to half of Fortune 1000 companies have eDiscovery practice groups, it is really the law firms where this trend should begin.

As corporations invest in the business process of litigation preparedness, many wrestle with the options for ongoing email preservation. I thought that it might be worth a quick look at some of these options and some potential issues that different methods pose. The first choice is whether the preservation method is user driven or an automated system. We all have heard the horror stories about user non-compliance. In Re Hawaiian Airlines is a good example and this U.S. Courts conference paper provides some context. However, a well implemented and documented user driven legal hold process may be the right solution in many circumstances. When you have a small number of key custodians and the matter relevance criteria is very clear, it may be reasonable to allow custodians to keep emails in a special folder. Automated systems have their own issues, the main one being overly broad or inaccurate preservation criteria.

The Sedona Conference released its Commentary on Proportionality in Electronic Discovery, available for download here. Proportionality is an interesting topic; determining what is good faith and reasonable is challenging. The Sedona Conference Working Group provides some very good analysis in this document. I’d like to add some perspective on what this means for organizations working on eDiscovery programs.

IBM announced the acquisition of PSS Systems, setting into motion what might be a round of consolidation in the eDiscovery market. I get asked all the time why the software giants haven’t bought eDiscovery vendors and the answer is typically that they are waiting until there are some internal winners in the market. In the market for preservation management, the main vendors have been PSS and Exterro. IBM must have decided that it was important enough to get some of the big clients that PSS brings to the table.

The AIIM State of the ECM Industry 2010 report is out and I read it to see what kinds of insights it might offer about the eDiscovery market. ECM – or enterprise content management – gives organizations the ability to more efficiently manage unstructured content. ECM first came on the scene to solve mundane problems like version control, to put workflow around content-driven processes, and to better facilitate knowledge management (giving knowledge workers the tools to be more efficient). When the FRCP amendments took effect in 2006, the expectation was that ECM could ultimately solve the problem. At eDJ, we still believe that ECM will play a huge role in identification, collection, and preservation initiatives, it will not be the end-all, be-all for eDiscovery. That said, eDiscovery is a huge driver for ECM.