Q&A: What To Know About E-Discovery

What technologies aid in e-discovery?
William Lyons, chairman & CEO, AXS-One: In e-discovery, there's been a gradual transformation in both the technologies used and the way in which they're used. Traditionally, this has been a reactive function — in response to an e-discovery request, corporations reached into their backup vaults, fished out backup tapes, identified a list of Electronic Evidence Discovery (EED) vendors, and outsourced the job to one of them. EED companies in turn used proprietary tools to ingest and troll through the data and develop an appropriate response. Even when done right, the process was tedious, labor-intensive, and expensive. It's also error-prone, in an area where even minor mistakes can expose corporations to severe legal damages.

What's different now is the emergence of archiving, which provides a proactive solution to the problem. In addition, to handle the high volume of data that typically exists, solutions have to be highly scalable and offer a cost-effective way to add more hardware resources. And since searches have to be accurate and provide meaningful hits, full-text indexers and the associated search engines have to be flexible and feature-rich. These search engines should support high-level conceptual searches and allow you to hone in on the results. To facilitate long-term storage and fast access, CAS (content addressed storage) devices have also emerged as a cost-effective alternative for storage.

Bill Thornton, VP of business development, Surety: With the recently amended Federal Rules of Civil Procedure (FRCP), where native electronic files are not only discoverable but must be authenticated for admissibility purposes, data authentication technologies are rapidly becoming an important aid in e-discovery. Trusted time stamps are becoming more valuable to litigation support companies that have to eliminate doubt that e-records could have been mishandled in the discovery process.

What special expertise should an ECM VAR have to offer e-discovery solutions?
Lyons: Ultimately, it's all about accuracy: All the technical skills required — and there are plenty — must support the need to accurately search for, find, and retrieve all of the information required from a huge data set. To do that, the VAR must understand data encryption and decryption technologies, as well as be familiar with protocol-level security features such as secure sockets and https. Access protection can be achieved through username and password; this can be implemented in several ways depending on the level of protection required. To do this right, make sure the vendor understands the alternatives for password protection and the implementation of user-based access control mechanisms.

Remember, it's not just about throwing content at the parties involved; downstream data processing operations require the VAR to understand data redaction, so that data that falls outside the requested information can be protected. Packaging the data to deliver to opposing counsel while preserving its fidelity requires the VAR to understand output data formats such as pst, nsf, and zip files.

Thornton: ECM (electronic content management) VARs most certainly should be able to demonstrate to their customers the advantage and utility of being litigation-ready before e-discovery solutions are warranted. That is, VARs should be able to assure their customers that throughout each electronic record's chain of custody, its authenticity can be proven and legally defended. By the time e-discovery hits an enterprise, too many variables could affect an enterprise's ability to legally defend its evidence, such as rogue insider tampering and spoliation, record alteration during technology infrastructure upgrades, and/or a false reliance on the integrity of people, processes, and systems to secure records.

Are e-discovery sales opportunities increasing for VARs?
Lyons: The environment is certainly ripe for a major expansion in implementing technologies that aid in e-discovery. In particular, revisions to the FRCP will unquestionably have a major impact on the way organizations manage electronic data. Making these technology investments was always a wise move; in the current regulatory context, it's a mission-critical priority.

Archives must now accommodate all types of digital data and keep them in the context of the original applications. In other words, the original fidelity of the data has to be maintained along with extensive audit trails and robust reporting features to prove that the data has not been tampered with. The audit capability, in turn, has to be backed up with tamperproof media. The onus is heavily on the companies themselves to do things right ahead of time, not only when they're called on during litigation.  

Thornton: Absolutely, they are increasing. With more than 93% of all business records in native electronic format (Source: ARMA [Association of Records Managers and Administrators]) and with the recently amended FRCP in December 2006, sales opportunities for VARs will increase exponentially over the next several years. According to a Socha-Gelbmann survey, the e-discovery market was $1.8 billion in 2006 and is projected to grow to $2.4 billion in 2007.

Are there any new developments in e-discovery that VARs should be aware of?
Lyons: There are always regulatory revisions that VARs need to monitor, but again, we believe the most important ones right now are the Dec. 1, 2006 amendments to the FRCP. These affect almost every organization in the United States and beyond. They introduce a new category of business records described as Electronically Stored Information (ESI) and provide detailed processes that organizations must follow in the event of federal civil litigation. As a result, it's now more than just a 'good idea' for companies to have complete control of data (both paper-based and electronic) and be able to access it quickly and accurately.

Thornton: Yes. E-discovery does not have to be a reactive exercise. Companies that invest up front in technologies and processes that track, preserve, and authenticate electronic records in their daily recordkeeping regimens can mitigate tremendous risk and save huge downstream e-discovery costs when litigation occurs. There are 'litigation-readiness' products on the market today that proactively address these issues, and they complement the reactive e-discovery solutions and services that companies buy today when they get into legal trouble.

Are there any specific types of companies that VARs should target for e-discovery solutions?
Lyons: While each industry poses unique challenges, all types of companies — regardless of vertical market, size, location, etc. — are subject to litigation and must have the ability to respond to e-discovery requests. Just as VARs need to understand how companies differ by industry, size, and employee strength, they need to understand that many issues related to e-discovery are common.

Thornton: VARs should focus on the highly regulated, highly litigious markets where electronic record admissibility is most important. We see three market segments in particular where e-discovery requirements are growing: manufacturing, life sciences, and financial services. In the areas of manufacturing and life sciences, intellectual property (IP) litigation is driving a considerable amount of e-discovery where IP ownership and idea date of creation are often challenged. In financial services, we see an increasing need to prove integrity of an electronic record throughout its chain of custody, whether it is a brokered transaction, an electronic contract, or an electronically processed claim.

What kinds of objections should VARs expect to encounter from end users when pitching e-discovery solutions?
Lyons: Stand-alone and outsourcing EED companies are often finding themselves out of favor, because they can't always meet the strict requirements of timeliness.  What companies need to do most is be proactive and archive data as soon as it's identified as a corporate record. This line of reasoning makes it an easy and more compelling case to pitch (and adopt) the solution.

Thornton: In many instances, enterprise customers view e-discovery solutions as a reactive requirement. That is, they typically buy when they enter into a litigation hold. For the most part, companies view e-discovery as a solution or service they would need if and when they enter into litigation.