Addressing Costs and Risks in Electronic Discovery

• Introduction• ESI and E-Discovery• The Electronic Discovery Reference Model

(EDRM)• EDRM

• Where are the costs?• Where are the risks?

• Best Practices

What Is ESI and Where is it?

ESI Location

Documents (MS Word, PDF), Spreadsheets

Computer Hard drive, File server, Email server (attachment to email), Cloud

Emails Computer hard drive, Email Server, Cloud

Text Messages Service provider (AT&T, Verizon, etc.), phone

Pictures, Videos Phone, Computer hard drive, server, Cloud

Bits and Bytes• Typical hard drive sizes: 320GB - 500GB• 1 GB = approx. 64,000 pages in Microsoft®

Word® or 100,000 emails • Tera=1 thousand GB (1,000,000,000,000)• Peta=1 million GB (1,000,000,000,000,000)• Exa=1 billion GB (1,000,000,000,000,000,000)• Zetta=1 trillion GB• Yotta=1 quadrillion GB

Why Is ESI Important?

Data is exploding at an astounding rate

•90% of the data in the world has been created in the last two years.1

•Multiple analysts have estimated that data will grow 800% over the next five years•Computer World states that unstructured information might account for more than 70%–80% of all data in organizations

Why Is ESI Important?

• From the dawn of civilization to 2003: 5 exabytes (5,000,000,000,000,000,000) of information; Today: 5 exabytes is created in just two days!2 And increasing…

• It was estimated that by 2012, the digital universe of data was to have grown to 2.72 zettabytes (ZB) and will double every two years to reach 8 ZB by 2015.

• For perspective: That’s the equivalent of 18 million Libraries of Congress. Billions of connected devices—ranging from PCs and smartphones to sensor devices such as RFID readers and traffic cams—generate this flood of complex structured and unstructured data*

Cost Of E-Discovery

•Sedona Conference Study (2007): $30,000/GB

•Gartner Group (2012): $18,000 /GB

•RAND Study (2012): $17,477/GB

Hypothetical

• 10 custodians: 30 GB (3 GB per custodian)

• 40 GB Network and other ESI

• Approximately 3,500 files per gigabyte

• 245,000 documents

Rand Study

Allocation of Costs

Hypothetical (cont’d)

• Collection: $10,000 ($500 per custodian + other)

• Processing: $23,750 (Approximately $300/GB)

• Review: $91,250 (Volume reduced during processing)

• Total $125,000

Rand Recommendations

• Adopt Computer Categorization to Reduce the Costs of Review in Large-Scale E-Discovery Efforts

• Improve Tracking of Costs of Production and Preservation

• Bring Certainty to Legal Authority Concerning Preservation

Where Are The Majors Risks In E-Discovery?

Analysis of 193 E-Discovery Cases involving a motion for sanctions:

•Information Management/Records Management: 97 cases•Identification/Preservation/Collection: 173 cases•Processing/Review: 9 cases•Production: 7 cases

Risks: Recent Cases

Day v. LSI Corp., No. CIV 11-186-TUC-CKJ, 2012 WL 6674434 (D. Ariz. Dec. 20, 2012)•Defendant failed to preserve:

– GC “willfully failed” in duty to preserve of key custodian

– Didn’t follow their own document retention policies•Result

– Partial default judgment– Adverse inference– $10,000 to Plaintiff to pay for additional legal

efforts

Risks: Recent Cases

Peter Kiewit Sons’, Inc. v. Wall Street Equity Group, Inc., No. 8:10CV365, 2012 WL 1852048 (D. Neb. May 18, 2012)•Defendant performed inadequate searches•Defendant wrongly discarded a relevant server•Result

– Defendant ordered to pay for forensic examination– Recommended adverse inference– Monetary sanctions

Risks: Recent Cases

Branhaven LLC v. Beeftek, Inc., ---F.R.D.---, 2013 WL 388429 (D. Md. Jan. 4, 2013)•Plaintiff guilty of wrongful certification pursuant to Fed. R. Civ. P. 26(g) and violations of Fed. R. Civ. P. 34(b) – format of production•Plaintiff certified they had adhered to the production protocol – when they had not•Plaintiff delayed production until a few days before 30 (b)(6) depositions•Plaintiff sanctioned for costs incurred to defendant

Risks: Recent Cases

Scentsy Inc. v. B.R. Chase LLC, No. 1:11-cv-00249-BLW, 2012 WL 4523112 (D. Idaho Oct. 2, 2012)•Court: Plaintiff’s document retention and litigation hold (verbal) polices “clear unacceptable”•Willing to recommend adverse inference or even dismissal if spoliation occurred•No written litigation hold•No formal document retention policies regarding file deletion

The EDRM Framework

Best Practices: Information/Records Management

• IM/RM Is Not matter-specific• Have a policy based on internal business continuity

needs, regulatory requirements, etc.• Make RM someone’s responsibility - even if it’s part-time• Leverage information in your RM to aid in litigation

readiness: where custodian data resides (datamaps)• Identify a litigation response team (LRT) - Legal, IT, HR,

management

Best Practices: Identification

• Communicate clearly who the custodians are and what kind of ESI is sought

• Reduce guesswork by asking for clarification• Meet and Confer.  Identify:

– Custodians - inner circle, peripheral– Candidate relevant ESI - emails, documents, date

ranges– Potential search terms– Production formats - how will each review produced

ESI

Best Practices: Identification (cont’d)

With internal Litigation Response Team (LRT)•Identify where relevant ESI may be•Use data maps from RM•Email, ESI on hard drives, network drives, document management systems, etc.•Determine preservation and collection strategy•Preservation may need to be ongoing•Does collection method need to preserve metadata?

Best Practices: Preservation

• Legal holds• Send notifications• Enforcing the holds• Remember to close

Best Practices: Collection

• Defensible collection - drag and drop copy may not be sufficient– Native productions– Metadata important: fraud– Contentious/high-profile– Dates/times are important– Employment

Best Practices: Processing

• Data: Technology• Information: People• Combination of Both: CAR/TAR

Best Practices: Processing (cont’d)

• Predictive Coding– Training– Testing– Execution

Best Practices: Review

• Have Review Manager be a part of the process from the beginning

• Better, Faster, For Less• Be Prepared

– Technical Issues– Downtime

• Spend to Save

Best Practices: Analysis

• Statistical v. Substantive• Reporting

– Custodian (Total docs <Reviewed> = To Be Reviewed)

– Reviewer (Docs/hours = dph)

– Other analytics (budget control etc...)

Best Practices: Production

• Likely convert to .tiff or .pdf for production       • Strategy: Why make it easier on other side?• Watch out for embedded files, hidden information etc...

Best Practices: Presentation

• Non-courtroom presentation (could include depositions)

• Document summaries, chronologies, witness/custodian memorandum, notebooks

• Courtroom presentation (could include depositions)

• Exhibits - Graphics, animations, etc.

Best Practices: Project Management

• Experience in E-Discovery project management– Attention To ESI handling throughout– Attention to audit trails and chain of custody

• Budget and Time Sensitive• Experience managing and motivating people

Transitioning between stages

• Information Management to Identification• Identification to Preservation/Collection• Processing to Review/Analysis

General Tips

• Consider hiring a consultant - may not need for every matter, but for big, complex ones or the first one, it may be a good idea• Process Improvement• Matter-specific• Scalability

General Tips

• Consider an agreed-upon ESI protocol - even something as simple as a checklist can help

• Estimating E-Discovery Costs (http://orangelt.us/estimator/pricing1.html)

Recovering E-Discovery Costs

• Document All Procedures• Demonstrate Efficiencies• Courts have allowed for recovery of imaging

costs when both parties had a mutually agreed protocol

• Courts are less open to re-imbursement for ESI searching and production

Wrap Up

Key Points

•Lower costs at preservation, processing and review

•Lower risks by focusing on transparent processes, sound ESI handling procedures and effective review management

References

1. Sure, information has value, but don't forget the risks By Deidre Paknad - Computer World May 7, 2013

2. Gartner Group

3. Rand Institute for Civil Justice, Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery by Nicholas M. Pace and Laura Zakaras (2012)

4. Big Data: The Next Ontier For Innovation, Competition, And Productivity - McKinsey & Company, 2011 Study

5. Herbert L. Roitblat, Search & Information Retrieval Science, 8 SEDONA CONF. J. 192, 192 (Fall 2007).

6. Will Uppington, E-Discovery 911: Reducing Enterprise Electronic Discovery Costs in a Recession, E-DISCOVERY 2.0, (Feb. 20, 2009, 4:40 PM), http://www.clearwellsystems.com/e-discovery-blog/2009/02/20/e-discovery-911-reducing-enterprise-electronic-discovery-costs-in-a-recession/.

7. Jardin v. Datallegro, Inc. 08-CV-1462-IEG, 2011, (S.D. Cal. Oct. 12, 2011

Written Materials

• Available at:• www.OneSourceDiscovery.com• www.ProTem.Pro

Contact

• Andy Cobb, PhD– andy@onesourcediscovery.com– 502-386-6797

• Erin Corken, J.D.– Erin.Corken@ProTem.pro– 310-213-2034