The Electronic Information Explosion
Just a few years ago the concept of electronic or digital discovery was unknown as a general topic of conversation. But a critical phenomenon has been taking place in the last few years. While the numbers are very hard to pin down, the total number of electronic documents is growing at an exponential rate. Personal e-mail, as one example, now exceeds 40 billion messages a day and is expected to grow to 60 billion in the next two years. We are obviously in the grasp of an information revolution that is having a tremendous impact upon the legal profession. If you are a trial lawyer you now have to be aware of the fact that 95% of all documents created today are originally in digital form and are kept and stored in digital form. In the Healthcare industry for example there is a rapid movement toward keeping medical records only in digital form. Both cost saving and the Health Insurance Portability and Accountability Acts have driven that transition. For hospitals and doctors the impact of that change means reduced record keeping costs and better access to patient information. For lawyers engaged in personal injury cases, the switch to digital records changes many aspects of case management. For lawyers involved in commercial litigation the fact that most commercial records now exist only in digital form changes many other things as well. A few years ago, I wrote about the Enron litigation in which 50 million pages of documents were being processed as a part of the discovery in the civil litigation cases that arose from that debacle. That number was remarkable then, but today cases with more than 500,000 pages of discovery information are commonplace. Cases like Enron with 50 million pages or more are now not unusual and are called “Megacases”. Fifty million pieces of paper will fill 20,000 bankers’= boxes and pose a tremendous burden on the lawyers who must process that information. However, the burdens posed by the information explosion are not limited to litigation. Any business lawyer who advises clients large and small must now be aware of the existence of massive amounts of information stored on various desktop computers and servers controlled by those clients. That information serves many purposes and may be the subject of a document production request. It is vital, therefore, that special attention be paid to how those documents are kept and how and when they will be destroyed.
Document Retention and Destruction Polices
For a variety of reasons, not limited to the potential for litigation, every business must direct careful attention to the development of a written document retention and destruction policy. The necessity for such a policy arises not only in the context potential litigation but also in the regulatory context. The passage of the Sarbanes-Oxley act has imposed special obligations on many kinds of businesses. The long and short of it is that your clients must be aware of the critical need for the development and enforcement of written document retention and destruction policy.
Until recently, it was common for businesses of all kinds to keep every electronic document they had ever created or received because it is easier to keep everything than to be selective. In larger businesses, those documents get moved to backup servers and eventually to tapes or other storage media, but they are all there and can be accessed with a little effort. The vast bulk of that information is useless and some of it may be downright dangerous. For example, it has now become a common practice in litigation to produce massive amounts of electronic information in native electronic form in response to some discovery demands or regulatory actions by agencies such as the SEC or the Justice Department. Because the amounts of information are so voluminous the effort to sift through all of it prior to production may be monumental. The failure to undertake that task, however, may result in the inadvertent production of confidential or privileged information. There have been a number of cases recently holding that in some circumstances even the inadvertent release of privileged information as a part of a massive electronic document production can result in a waiver of the privilege. That is simply one example of the danger of continuing to keep electronic information without following a document retention and destruction policy.
Developing a Policy
The development of a written document retention and destruction policy must look at many things. Specific attention must be directed to things such as tax records, personnel records, Board meetings, press releases and marketing and sales documents. Particular attention must be paid to the need to segregate privileged documents and various types of intellectual property in order to avoid inadvertent release. It goes without saying that the development of such a policy is a difficult and time-consuming effort on the part of both the client and a lawyer who advises that client.
When a document retention and destruction policy has been adopted, evenhanded enforcement of the policy is critical. Who can forget the hapless Arthur Anderson lawyer who sent out an e-mail reminding everybody in the Enron case of the need to follow a document destruction policy that had apparently been ignored or forgotten? Of course, the e-mail was widely viewed as a request on the part of the lawyer to make sure that dangerous information got purged from the company files. That may or may not have been the intent, but the fact that the document destruction policy had not automatically segregated privileged or important documents and destroyed the remainder pursuant to an established schedule was the source of the problem.
There are many sample policies available on the Internet but they must be tailored to the specific needs of your firm or client. An excellent review of the many dimensions of the development of such a policy can be found at. http://tinyurl.com/7ysrt . A quick review of the details of the content of a basic policy will convince you that development will require focused attention and a lot of work! But it is a task that you must not put off until somebody asks to see your client’s hard drives in their search for electronic information!
Next month I will discuss the new upgrade (SP2) to Windows XP. I would appreciate any comments that any of you have on problems and issues that have come up in your installation of the upgrade. Just drop me a note at firstname.lastname@example.org . Thanks!