On Dec. 1, 2006, new amendments to the Federal Rules of Civil Procedure (FRCP) that concern the legal discovery of electronically stored information went into effect. These amendments make all electronic information including image files, word processing documents, spreadsheets, e-mail, instant messaging, and even VoIP (voice over Internet Protocol) conversations such as Skype, subject to discovery procedures. If you are brought to litigation, not only will you need to produce this information in a required time frame, but you may also have to produce all of the metadata associated with each of these files.
Unlike Sarbanes-Oxley mandates, which targeted public companies, and HIPAA (Health Insurance Portability and Accountability Act) regulations, which pertained to healthcare organizations, these new e-discovery requirements will affect every business at some stage. With this in mind, does your business have the procedures in place to manage electronic content effectively throughout the enterprise? If you're like most companies, the answer to this question is probably no.
While many companies have implemented solutions to archive and manage important documents and even e-mails, these systems rarely encompass the entire enterprise, and even fewer have been extended to address instant messaging and other real-time communications. A survey released by Fortiva (an e-mail archiving software provider) shows that a whopping 94% of the IT professionals queried feel their organizations are not prepared to meet the new FRCP requirements.
Failure to comply with the new electronic discovery rules can result in fines, sanctions, and executive liability. So how can you begin to determine your current e-discovery readiness and put your business on a path to compliance? A good place to start is by reviewing your current IT infrastructure. There are many information management and ECM (enterprise content management) solutions on the market that help you archive, exchange, and retrieve data. You may have one or more of these applications in use at your organization. While many of these systems offer the ability to capture images and other file types, they may not be flexible enough to allow you to search, select, and extract the specific files and metadata requested for court presentment. Evaluate these systems, and check with your suppliers to determine if there are modules that can be added to enable these sophisticated e-discovery capabilities — if not already present in the existing solution.
Protecting yourself from being the next poster child for noncompliance should be only one of the drivers for reviewing and upgrading your technology investments. An equally important driver is ROI. A recent study by Cohasset and Associates found that for every billion dollars of revenue that a company generates, it will incur an average of $2 million to $4 million worth of discovery costs each year. Implementing the right mix of technologies (whether a new document management system, e-mail management platform, or enterprise search engine) can help you dramatically decrease the costs involved in the discovery process. The important thing to remember is that technology alone is not the answer. Technology must be combined with a system of sound policies and controls to ensure your e-discovery efforts are successful. To learn more about the e-discovery amendments to the FRCP, please visit the U.S. Court's Federal Rulemaking Web site at: www.uscourts.gov/rules.