Lack of Understanding of E-Discovery and Regulatory Requirements Exposes Businesses to Legal and Compliance Risks

RESTON, Va.–Surety, LLC, the leading provider of data integrity solutions, today announced the results of the 2008 Email Security and Authentication Survey. The survey of more than 800 IT security, email security and compliance professionals revealed that 65 percent of respondents lack confidence that their organization’s email records would be admitted as authenticated evidence in legal, regulatory or patent disputes.

The survey further revealed that more than 80 percent of respondents are concerned about their ability to authenticate email records and attachments and more than 50 percent of respondents remain unclear on new regulations and legal expectations related to email authentication.

“During a time when courts have set forth clear expectations for the authentication of electronically stored information (ESI), including email, it is troubling to learn that nearly half of IT professionals responsible for preserving email records are not fully aware of these requirements,” said Timothy Carroll, Partner, Vedder Price P.C. “These findings underscore why so many organizations are turning to content security solutions such as trusted time-stamping to preserve the integrity of their electronic records throughout the chain of custody.”

“Courts are wise to the ease with which electronic records can be manipulated,” said Tom Klaff, CEO of Surety, LLC. “High profile cases such as In re Vin Vinhnee and Lorraine v. Markel relate the expectation that electronic records be retained in their original state without alteration. The inability to irrefutably establish that your electronic records and its associated metadata have not been deleted or altered can be costly. These survey findings relate the necessity for IT professionals and legal teams to work together to deploy solutions that ensure litigation-readiness.”

Other findings in Surety’s the 2008 Email Security and Authentication Survey include:

*       Email retains its position as the most critical enterprise application. Seventy-one percent of respondents indicated that their organization’s use email to share information on a wide range of business-critical data, including documents related to company financial information, human resources and Intellectual Property (IP) and contracts with external parties.

*       Email takes center stage during e-discovery and during litigation. Nearly one-third of respondents indicate that their companies have been required to produce email during e-discovery requests and their email records have been used during litigation.

*       Many organizations have been slow to implement appropriate email storage and content security solutions. According to the survey, 48 percent of respondents do not have tools in place to store emails in their original form in a manner that does not leave them susceptible to tampering.

*       Wide-variety of corporate initiatives drive adoption of email authentication solutions. Regulatory compliance, e-discovery concerns, risk avoidance and internal policies mandating improved security represent the top drivers for the adoption of authentication solutions.

Full findings for Surety’s 2008 Email Security and Authentication Survey are available at www.surety.com/images/whitepapers/Surety_EmailSecuritySurvey_2008.pdf.

Survey Methodology

The survey was conducted by eMedia USA on behalf of Surety between April 8 and April 23, 2008, and included 808 IT security, email security and compliance professionals.

US Government Accountability Office Releases Report on Challenges in Implementing an Electronic Records Archive

On May 14, 2008, the GAO released a status report on the efforts to implement an Electronic Records Archive for the Federal Government.  The 21-page report chronicles the numerous challenges encountered in the massive project started back in 2001. Cost over-runs and delays in the project plan make clear that the public sector faces the same challenges as those in the private sector in respect of gaining control over information assets.  Developing a comprehensive electronic document management system is a daunting challenge and the risk of failure is high.  

These efforts are necessary, notwithstanding the risks.  As the report states:

The ability to find, organize, use, share, appropriately dispose of, and save records—the essence of records management—is vital for the effective functioning of the federal government. In the wake of the transition from paper-based to electronic processes, records are increasingly electronic, and the volumes of electronic records produced by federal agencies are vast and rapidly growing, providing challenges to NARA as the nation’s record keeper and archivist.

For the complete report, see GAO.gov. 

Electronic Communications Preservation Act — Government’s Attempt to Tame Electronically Stored Information

Finding “what you need when you need it” sounds simple enough, but the dramatic explosion of electronically stored information generated worldwide over the last few years has left individuals, business organizations, and even governments seriously challenged with knowledge management. 

To find what one needs when one needs it, we first must determine what we don’t need and establish a regular and secure process for disposing obsolete information.  I just cleaned my desk this morning, but the amount of time and thought required to clear my inbox or those thousand or so sent messages, is a different proposition altogether.

In the most recent attempt to tame the ESI beast, Congress has proposed a new piece of legislation intended to perserve important emails needed for historical purposes.  The Electronic Communications Preservation Act, introduced by House Democrats, is intended to address the recent problem with missing emails and backup tapes from the Bush Administration.  NARA has concerns with the bill, however, and the Justice Department has its own set of issues relative to legal and regulatory preservation matters.  Congress would be well served in leveraging the substantial expertise NARA and the private sector have to offer in this area.  Taming the ESI beast is not something anyone has achieved with a great deal of success, to date, but it is clearly a major risk area that organizations and governments will need to address and mitigate for many years to come.

For more on this story, see FCW.com.

Rule 702 and the Reliability of Evidence Obtained through Concept and Other Automated Search Methodologies

After my longest stint of silence in the history of The Datakos Blawg, this important subject has awakened me from a protracted slumber. It’s good to be back!

The link below will bring you to a very important article (well, the topic is important at least).  The test of reliability under Daubert will be the key for determining whether new search methodologies will ultimately replace traditional attorney review as the means for discovery in respect of dealing with ESI. The development will affect the litigation support technology and law firm industries, inasmuch as the former will gain increasing market share from the latter if the information derived from concept search and other search methodologies are deemed reliable and admissible. 

We pledge to keep our loyal readers abreast of common law developments applying Rule 702 of the Federal Rules of Evidence to the reliability and helpfulness of evidence obtained through new search methodologies.

http://www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1202421351577

 

 

GCs: In-House Life Overloaded With Meetings, Bureaucracy

Katheryn Hayes Tucker
Fulton County Daily Report

Establishing trust with businesspeople is a key to success for a general counsel, according to a panel of GCs who offered advice and tips in a program for the Association of Corporate Counsel Georgia chapter last week at the Cumberland Maggiano’s Little Italy.

Keith Scott, senior managing attorney for Rollins Inc., parent of Orkin Exterminating, said when he joined the company 11 years ago, his first assignment was to spend a hot June day in Florida drilling holes in concrete to insert chemicals to kill termites. He said he quickly developed empathy for people working in other departments of the business.

Teresa T. Kennedy, assistant general counsel for Cox Communications Inc., said she studied the culture of the company and the different departments within it to learn how to communicate. She also learned to follow the word “no,” with “but…” and offer alternatives when she had a legal issue with a business goal.

* * *

For more see Fulton County Daily Report (via Law.com).

Senate Judiciary Committee Passes Evidence Rule 502

The Senate Judiciary Committee approved S. 2450 without amendment.  The bill would amend the Federal Rules of Evidence to add new Evidence Rule 502. See Library of Congress. 

The legislation addresses waiver of the attorney-client privilege and work product protection and is identical to proposed language approved by the Judicial Conference of the United States and submitted to Congress for its consideration in 2007.  Any new rule of evidence requires an act of Congress to take effect.  See 28 U.S.C. § 2074(b).  New Federal Rule of Evidence 502 is expected to become law in December 2008.

Amid scandal, NY archivist calls for better record keeping

BY JOSEPH SPECTOR
Albany Bureau

ALBANY — The state’s archivist warned Tuesday that New York may be entering the “digital dark ages” if it doesn’t better account for electronic records being produced at the state Capitol.

The strong message from Archivist Christine Ward came during a hearing by Senate Republicans on accusations that the Spitzer administration had deleted emails and other records pertaining to the so-called Troopergate scandal.

A Spitzer spokesman said all records have been retained.

The Senate Investigations Committee called witnesses to testify on whether emails and other electronic records could be easily destroyed or retrieved. Experts said that in most cases, records could be recovered through forensic technology.

But Ward gave the most compelling testimony, warning that in the electronic age it’s becoming increasing difficult to file documents in the state archives, which are kept in Albany.

For instance, she said advances have made it difficult to even access old technology, such as using old floppy computer discs. Moreover, information is often deleted inadvertently, she said. She called for new laws to better outline how public electronic records should be kept.

“We are faced with the very real possibility that much of our state’s modern history is in danger of being lost,” she said.

Last year, Spitzer aides were accused of compiling travel documents on Senate Republican Majority Leader Joseph Bruno’s use of a state helicopter, claiming he used the aircraft for political purposes.

While state Attorney General Andrew Cuomo and the Albany County District Attorney’s office found no criminal wrongdoing, Bruno and other critics have blasted the Democratic administration, and Spitzer suspended then-communications director, Darren Dopp, for his role in the scandal.

For more on this story, see pressconnects.com.

New niche for e-discovery: special masters

CORREY E. STEPHENSON

Dolan Media Newswires

BOSTON — The increased use of electronic discovery has resulted in a new set of practitioners: e-discovery special masters.

A special master is an officer of the court appointed to help with its proceedings, and may perform functions such as taking testimony or advising the court as a neutral expert.

“Essentially, you represent the judge and the court as an independent in evaluating technological disputes and electronic discovery issues,” explained Peter S. Vogel, chair of the Electronic Discovery and Document Retention Team and co-chair of the Internet and Computer Technology Practice Group at Gardere Wynne Sewell in Dallas.

Vogel, a partner at the firm, has worked on more than 20 cases with some form of an e-discovery special master.

The role varies, explained Judge Shira Scheindlin, a U.S. District Court judge in the Southern District of New York and the author of several seminal opinions on e-discovery, including Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

Courts can appoint an electronic discovery special master “for a narrow dispute, such as a privilege review, or a broader task like supervising all discovery,” she said.

Special e-discovery masters have become prevalent because over the last few years, “the level of technical detail simply outgrew what judges and counsel could comprehend,” explained Craig Ball, a trial lawyer and technologist in Austin, Texas, who has served as a special master in approximately two dozen cases.

“When neither the attorneys nor the court felt able to ask the right questions or understand the answers, that created the need for a technical special master,” he said.

For more see Daily Record.com.

Datamaps Mitigate Risk under the Federal Rules of Civil Procedure and Meet Evolving Attestation Requirements under Section 404 of Sarbanes Oxley Act

Employees perform,collaborate and execute tasks more efficiently when able to find the information they need when they need it; there are legal discovery cost savings to consider as well. The impetus for developing a so-called datamap comes from the Federal Rules of Civil Procedure, specifically the procedural requirements of Rule 26(f), which requires parties to discuss ESI (electronically stored information) at the outset of each case. The commentary to the new rule states in pertinent part that:

When a case involves discovery of electronically stored information, the issues to be addressed during the Rule 26(f) conference depend on the nature and extent of the contemplated discovery and of the parties’ information systems. It may be important for the parties to discuss those systems, and accordingly important for counsel to become familiar with those systems before the conference. With that information, the parties can develop a discovery plan that takes into account the capabilities of their computer systems. In appropriate cases identification of, and early discovery from, individuals with special knowledge of a party’s computer systems may be helpful.

It is easier said than done, but organizations need help with the design and development of a reliable process for understanding where information is stored.

Greenberg Traurig Freezes Equity Partner Pay, Cites Cost-Conscious Clients

By Debra Cassens Weiss

Equity partners at Greenberg Traurig won’t be getting an immediate pay raise because of a $10 million shortfall in year-end collections, driven in part by clients who want legal bills reduced.

A memo from chief executive officer Cesar Alvarez said the salaries would remain “at present levels until we get a better financial picture for 2008,” the Daily Business Review reports. Alvarez told the Daily Business Review that the firm is taking a cautious approach, a tactic that helped it weather past recessions.

The blog Above the Law first broke the news, posting two internal memos, one announcing the freeze and a second clarifying that it does not affect associates. The first memo said an increasing number of clients are asking for adjustments to hourly rates or bills and refusing to allow inexperienced lawyers to work on their cases.

The memo cited factors affecting the legal industry, including “a slowing economy, tighter credit markets that make transactions more difficult, a troubled housing market, a high level of consumer debt (over 50 percent of our economy is based on consumer spending), high gas prices, and significant cost pressures in the economy and by our clients.”

“The legal industry and our firm began to see the impact of these factors in late 2007,” the memo said. “In addition, costs in the legal industry, including our firm, continue to go up at levels that, in our opinion, are not sustainable. We can not control the legal industry, but we can control what we do in our firm.”