Help! Legal is nn the Phone! E Discovery In House

1© Copyright 2009 EMC Corporation. All rights reserved.

Help! Legal is on the Phone! Bringing eDiscovery In-House to Reduce Costs, Maintain Control, and Mitigate Risk


Agenda

Getting Acquainted

eDiscovery Reality

Getting Started

New eDiscovery Capabilities

Summary

Q&A


Getting to Know You

What is your job function?

Do you already use email archiving?

Have you had to deal with a request for legal hold?

Are you familiar with the eDiscovery jargon?


What is eDiscovery?

Requirement that organizations of all sizes collect, preserve, review and produce information for legal and regulatory proceedings.

Current and reasonably anticipated Federal and State litigation

State and Federal regulators, IRS,

OSHA,SEC, NASD, FINRA, HIPAA, Data Privacy & Protection

Investigation AuditInternal and external audit

of books and records, Defense Contractor Audit,

Government Contract Audits.

PublicDisclosure

Federal, State and Local - Freedom of

Information Act, Open/Public Records

Acts

Litigation


eDiscovery and the FRCP

Electronically Stored Information (ESI) explicitly included– Management prior to discovery impacts costs of eDiscovery

Very early meet and confer

“Preserving” appears in the rules for the first time

Requirement to understand the sources of ESI

Less obligation to produce “inaccessible” content– Still may have to hold it (can be just as burdensome)

Limited “safe harbor” for good faith inadvertent destruction of content – Best protection through solid records management program, including litigation hold

Some protection for inadvertent waiver of attorney-client privileged materials

Need for transparency!


eDiscovery Reality

Information management challenges– Unstructured data piling up– No enforced policy, including disposition

and retention

eDiscovery issues– Massive cost and risk – Average cost of a single eDiscovery

incident is $1.5M*– Exposure of ineffective information

management

Spending inefficiencies– Many organizations are outsourcing– Recurring expense for every matter or

investigation

Economic implications– Economic conditions and litigation

frequency run counter-cyclical– As the economy deteriorates, lawsuits and

investigations increase

* Source: Dataquest Insight: Emerging E-Discovery Market Spurs New Content and Records Management Investments, Gartner Research, October 2006


Inefficient Information Management is Costly

Source: Gartner, E-Discovery: Project Planning and Budgeting, 2008–2011, February 2008

ROI FACTORS

Up to 90% of [stored] data is

redundant or out of date

Up to 50% of network drive

storage is consumed by e-mail files,

mainly PST and files from other systems

One GB of data can result in $18,750 in legal review costs

Cut IT and legal costs by 10–50% by

bringing outsourced solutions in-house


The Expense of eDiscovery

Process Step% of

Discovery Costs*

Description Average Cost of Outsourcing

28%Costs associated with document collection from inaccessible locations

Identification - $200/hrCollection –

$200+ /hr or$400+ /GB

20%Cost of holding massive volumes Unanticipated legal riskSpoliation risk

$100+ /hr or $5+ /GB

35%

Cost directly related to number of documents to review

Processing –$850+ /GB or $.03+/ pg

Review –$120+ /hr or $1,200+ GB/Mo

17%Cost of delivering ESI to various recipients on various media (e.g., CD, DVD, or paper)

$.06/pg$50+/load file$1,000+/GB

Produce

Collection

Hold

Inspect/Revie w

Source: Enterprise Strategy Group, 2007 and Gartner, 2007

*when proceedings or investigations involve the discovery of ESI


Legal Department Challenges

Difficult to identify or collect ESI

– Massive over-collection waste of resources, risky “pooling” of data– Substantial risk of “faux” eDiscovery

No Early Case review

– Data collection is time consuming– Data processing/culling does not occur until the opposing parties agree on the

scope

Significant expenses for legal review

– 1 GB equals approximately 50,000 files to review– Not enough attorneys to review the data– No way to review the data without possibly changing the metadata

Sanction risk

– Manual process leads to jeopardy– Difficult to meet deadlines and comply with legal obligations


As Economy Contracts, Digital Universe Expands

Expected to double in size every 18 months -- 5X as much digital information in 2012 – 487 BILLION GB!

Interaction between people via email, messaging, social networking grows by factor of 8

Amount of information considered compliance intensive (subject to rules) grows from 25% in 2008 to 35% in 2012

– Email archives– Financial– HR records– Litigation documents

The Enterprise Faces the Digital Universe


As Economy Contracts, Litigation and Regulation Expand

Regulatory investigations– Fallout from the financial crisis = enhanced regulation

Employee litigation – Layoffs generate lawsuits and investigations

Shareholder derivative actions– Reporting, drop in stock, financial crisis

Aggressive IP practices– Seeking additional revenue sources

CFO oversight– Weaker economy results in pressure on expenses - including legal

Sources: Forrester: “Trends 2009: eDiscovery”, Brian Hill, 1/15/2009“As companies increase layoffs, lawsuits are likely to follow”, Carol Williams, Los Angeles Times, 12/28/08

“As one outcome of the current macro-economic environment… expect more litigation and regulation in 2009.” Forrester

“A tidal wave of

wrongful termination

lawsuits is expected in

the coming months

…”Los Angeles Times


2009 by the Numbers

Source: Fifth Annual Litigation Trends Survey, Fulbright & Jaworski, Oct. 2008

Expect an increase in

litigation during 2009

(“large” companies)

$1B+ companies spending >$10M on litigation each

year (excluding settlements

and damages)

Have more than $20M at risk in

at least one case

(public companies)

Anticipate even more regulatory

inquiries and proceedings in

2009 (all respondents)


Two Years After FRCP Amendments…

“Companies Not Ready For E-Discovery”, http://www.informationweek.com/blog/main/archives/2008/09/ companies_not_r.html, posted 9/23/08 (Andrew Conry-Murray, Information Week). Survey from Oce Business Services.

State of Readiness = Unprepared

57% of law firms: clients not ready to find and produce information relevant to litigation

39% of in-house counsel: company not prepared for eDiscovery

Errors generate sanctions and headlines

Scenario 1

Lawyers for company produced small batch of relevant email about 10 hours before trial. U.S. District Court Judge Marilyn Hall Patel declares “heads will have to roll.” According to reports, the

punished company had reviewed terabytes of information for this case.

Scenario 2

Company hit with an $8.5M penalty for mistakes with its own discovery of email relevant to a patent lawsuit. As Federal courts emphasize the responsibility of parties to conduct thorough discovery

searches, more such mishaps are likely.

http://www.informationweek.com/blog/main/archives/2008/09/companies_not_r.html


How about You? Where would you put your organization with regard to litigation procedures?

“© AIIM 2009, www.aiim.org”

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

We have no policy to deal with litigation or legal discovery

A legal discovery process might require us to search back‐up tapes

A legal discovery is likely to show up gaps from deleted emails

We have a policy to deal with legal discovery that relies on manual processesWe can carry out legal discovery searches

across our email archiveWe can carry out a single legal discovery

search across all of our records repositories

We can set a legal hold on our email archive

We can set a legal hold on both active and archived emails

We can justify deleted emails based on retention policies

Our email deletion mechanism includes deletion from back‐up tapes

N = 1109

no policy to deal


How Long? Would it take you to produce all the organizational information related to a former custodian or constituent?

0% 5% 10% 15% 20% 25% 30%

less than 5 days

5‐14 days

15‐30days

31‐60 days

more than 60 days

N = 1109

*Source: AIIM Industry Watch “Email Management: The Good, the Bad, the Ugly”. © AIIM 2009, www.aiim.org

~30% would take more than 31 days for just

1 custodian


Based on 107 respondents. Source: ESG Research Report, 2007 E-mail Archiving Survey, November 2007

Beyond Email and Outside The ArchiveWhich of the following record types has your organization been asked to produce in a legal proceeding or regulatory inquiry?

File Server

Desktops

Email Server

Laptops

Includes Email residing on


eDiscovery and Records Information Management ROI

“Between 10% and 90% of what

[clients] have does not need to

be retained for any reason.”

Budget roughly $500,000 on IT

support for cases involving 10 or

more custodians and/or more than

three different systems

One TB of data can result in $18.75M in

legal review costs

Unprepared companies will spend 1/3 more on eDiscovery than those with

content archiving solutions.

RO

I Factors

“Organizations unprepared for e-discovery in 2009 will be at a disadvantage …open to potential sanctions from an increasingly technically literate U.S. judiciary. As defendants, organizations

need to respond quickly and effectively … As plaintiffs, organizations must have their ESI house in order and be prepared

for reciprocal discovery requests …”Gartner, “Reduce the Cost and Risk of E-Discovery in 2009”, D. Logan and J. Bace, 1/9/09


What If You Could…

Improve litigation effectiveness by producing relevant information quickly, accurately, and defensibly?

Reduce the risk of spoliation (alteration or destruction of evidentiary ESI) by employing a proven litigation hold process for email and unmanaged data?

Lower legal costs with in-house, automated, repeatable eDiscovery processes?

Improve IT efficiency and reduce costs by establishing the business value of electronically stored information?


Getting Started

Litigation readiness

U.S. Federal Rules of Civil Procedure

(FRCP)

Expanding eDiscovery rules

worldwide

Security and privacyProtection of

corporate information

Limiting access

Industry regulations

Varied, numerous, and continuing to emerge

Regulation interpretation drives

policy

Corporate record keepingRecords and retention

management

Historical preservation/file plan

Massive information

growthUnsure about

information value (and risk)

Saving everything

Good Information Governance


Engage the Stakeholders … Get Cross-Functional

AuditCompliance

Records Management

BusinessComplianceBusiness Units

FinanceHR

TechnologyLegal

OGCInside Counsel

Outside Counsel

IT InfrastructureIT Applications


What Language are We Speaking?

Legal

FRCP/FRE

ESI

Legal Hold

Meet and confer

Custodian

Trusted custodian

Spoliation

IT

Active Directory

Fuzzy logic

SIS

Journaling

Boolean expressions

ASP, ISP, cloud computing


Respect the Motivation

Inside Counsel“Business Perspective”

Legal holds for individual custodians

Narrow view of relevant issues as stated in complaint

Provides too much or too little information

Centralize discovery to reduce review and production costs

Efficient business function dictates format of documents

Focus on finding ESI/hardcopy

Broad legal hold for business unit

Broader view of relevant issues aimed at winning case

Early case assessment to plan strategy

Spend what’s necessary to fulfill legal discovery obligation and litigate case

Produce document with consistent format

Establish clear chain of custody

Outside Counsel“Litigation Perspective”


Understand Your Litigation Profile Routine Matters

Characteristics ExamplesLimited business scope On-the-job injury

Most work handled by in-house admin staff HR matter

Work product may be reviewed by in-house counsel prior to submission to requesting partyShort timeframe; small number of custodians

Little or no day-forward collection/preservation

Short duration from notice to resolution

Other considerations– Average size

Number of investigators (3)

Number of custodians (10)

Duration (12 months)– Number per year (24)


Understand Your Litigation Profile Significant Matters

Characteristics ExamplesBroad business or revenue impact scope SEC investigation

Work may be split between in-house admin staff and in-house legal staff

Patent infringement

Work product may be reviewed by outside counsel prior to submission to requesting party

Executive misconduct

Reasonable timeframe; modest number of custodians

May require significant day-forward collection/preservation

Modest duration from notice to resolution






Understand Your Litigation Profile “Bet-the-Business” Matters

Characteristics ExamplesPotentially significant revenue impact Product liability

Potentially significant reputational impact Class action suit

Work may be split between in-house legal staff and outside legal counselWork product reviewed by outside counsel prior to submission to requesting partyLong timeframe; large number of custodians

Likely to require significant day-forward collection/preservation

Long duration from notice to resolution






eDiscovery SolutionsIdentify, Collect, Preserve,

ExportImmediate ROI

Information Management Solutions

Records ManagementEmail Archiving

Save money; improve eDiscovery (over time)

Information Management and End-to-End eDiscovery ROI – Reduce Risk; Improve Data Use

Collection

Preservation

Review Production Presentation

Processing

Analysis

IdentificationInformationManagement

InformationManagement

eDiscoveryProcess

SourcesThe Electronic Discovery Reference Model, www.edrm.net“What To Do About Discovery and Legacy Information Management in 2009, Gartner Inc., Debra Logan, 1/10/09

“IT organizations that have an electronic information inventory,

active policy management and archiving solutions,

and a repeatable process in place for e-discovery will

spend up to 50% less on e- discovery in 2009 than

those that do not.” Gartner, 1/09

http://www.edrm.net/


Policy Management Solutions

desktop

Email Policy Management and

Discovery SolutionsCollect and Hold Solutions Enterprise Records

and Policy Management Solutions

Secure Repositories

File share, email Other


Proactive Email Management

Key Capabilities• De-duplicated, full-text indexed archive

• Flexible search interfaces for users, Supervisors, and Administrators

• Flexible retention policies

• Preserve all relevant metadata

Tangible Benefits• Find messages quickly

• Cost effectively store messages for long- term retention

• Eliminate risk of unmanaged personal archives

“In the past it could have taken up to 40 to 50 hours to go through the tapes and search for large chunks of e-mail…for our legal counsel…Now that we have online access to these records, we can often pull up everything they need within 2 to 3 hours.

— Director of IT, Cascadia Capital


EMC SourceOne for eDiscovery

EMC SourceOne Email Management helps mitigate cost and risk of eDiscovery• Centrally manage e-mail

• Consistently enforce retention and disposition

• Metadata proves authenticity

EMC SourceOne products and solution for eDiscovery • Reduce time and cost associated with

eDiscovery

• Bring more of the process in-house

• Create repeatable business practices

Manage information effectively for proactive litigation readiness


EMC Offerings mapped against the EDRM

Collection

Preservation

Review Production Presentation

Processing

Analysis

IdentificationInformationManagement

SourceOne Discovery Collector

EMC Global Services & Partner Service Providers

EMC Storage

InformationManagement

eDiscoveryProcess

SourceOne Email Management and Discovery Manager TechnologyPartners

SourceOne Email Management


Comprehensive identification and collection•High-volume search of archive•Search against custom metadata

Consolidated preservation•Consolidate into legal hold folder•De-duplication and full text indexing•Chain-of-custody preservation

Effective culling with matter specific tagsFlexible export•Variety of formats•EDRM XML standardDownstream savings•Less content to outside counsel•Repeatable business process

EMC SourceOne Discovery Manager Discovery of Email Within the Archive

Secure matter management• Simple wizard-driven interface• Security at matter level• Matter lifecycle management


EMC SourceOne Discovery Manager Repeatable business process in action

Matter “areas” for easy organization

of data

Configurable display for easy sort, filter, and step through

results

Preview pane for quickly “reviewing” search results and

establishing matter relevance


EMC SourceOne Discovery Manager Collection and Preservation

Search history captured and viewable by investigators

Comprehensive statistics to

monitor investigation


EMC SourceOne Discovery Collector Discovery of Content Outside the Archive

• Index and classify content in-place• Retain and delete content

according to policy

• Vigorously tested• Integrated with EMC infrastructure

EMC Infrastructure

• Gain insight into sources of electronically stored information

• Reports enable early case assessment to determine merit

• Purpose-built for eDiscovery• Defensible processes

• Ability to address content inside and outside the archive

File Server

E-Mail Server

Desktops

Document Management

Archives

• Indexing appliance; quick to deploy• Less content sent for processing and

review• Fast return on investment

Rich eDiscovery Features

Policy Management Early Assessment

Complements Archiving

EMC Proven Solution Fast Time to Value


Discovery Collector

EMC SourceOne Discovery Manager and EMC SourceOne Discovery Collector

Efficient and complementary– Address content inside and outside

archive– Improve information management

Index and classify data

Create or enforce policy

Tiered storage based on value

Rapid time-to-value– In-house eDiscovery

Quick-to-deploy appliance

Defensible process

Information governance – Enterprise strategy– Modular approach

Leverages EMC infrastructure– Delivers price/performance leadership

Files, emails, and other content

outside the archive

File servers

Desktops

E-mail servers

Archives

SharePoint

Email living in the Archive

EMC SourceOne Email Management Archive

Discovery Manager

EMC Infrastructure


Straightforward ROI

“MarketScope for E-Discovery Software Product Vendors”, Gartner, Inc., 12/17/08.

“The payback period for an eDiscovery investment is very short, on the order of 3-6 months after implementation takes place.”


EMC SourceOne for eDiscovery Benefits

Respond cost-effectively to eDiscovery requests.Implement a repeatable business process that minimizes eDiscovery and compliance costs.Enforce information management policies for both email and unmanaged data scattered outside the archive.

Take the next stepSet up a product demo Request an ROI/TCO analysis www.EMC.com/SourceOne

http://www.emc.com/SourceOne


Summary

Get prepared.

Involve all the stakeholders in the process.

Tailor the solution for your needs … not just litigation … but cost savings and business productivity, too.

Work on the process as much as the technology.

Think good information governance.

Think EMC SourceOne solutions.


Get Involved with EMC CMA Communities

Why should you join?

Collaborate and share best practices

Shape the direction of future EMC products

Network with innovators across the globe, 24/7

Join now by going to: community.EMC.com/go/Documentumcommunity.EMC.com/go/SourceOnedeveloper.EMC.com/Documentumdeveloper.EMC.com/XMLtechcommunity.EMC.com/community/labs/d65

Help! Legal is nn the Phone! E Discovery In House

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