2009 Predictions And Trends Article

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2009 Predictions and Trends Guest Blog by Sonya Sigler, General Counsel and V.P. of Business Development of Cataphora, Inc.

When a new year rolls around, people immerse themselves in making resolutions they have little chance of sticking to or they make predictions about the year to come. I am going to stay away from making resolutions about weight loss that I won’t keep and, instead, focus on trends and predictions about eDiscovery for this coming year. Cooperation (and Collaboration) A trend that emerged in the latter half of 2008 and is gaining momentum right now is Cooperation. [Note: I have lumped cooperation and collaboration together because one leads to the other.] Cooperation among lawyers, even while being adversaries, is a hot topic right now. There are many indicators of this cooperation as a trend, but there are three examples that are fairly illustrative of it. First, The Sedona Conference® has issued its new Sedona Conference Cooperation Proclamation, which, as of September 30, 2008, had been endorsed by 24 state and federal judges from coast to coast. This document basically takes us back to the basics of why we have the Federal Rules in the first place (see Rule 1), which is to exchange/share information and prevent evidentiary surprises at trial. I think the trend is going to quickly expand beyond the judges to include more practitioners and, more heartening, to include the clients. Corporations are going to sign on to this Cooperation Proclamation in droves and, at the same

time, they will expect their outside lawyers to do so as well. A prime indicator of this trend was that there were more in-house lawyers at the Sedona Conference Annual Meeting in Palm Springs this November than at any other meeting of Working Group 1. If you are in-house counsel, I highly recommend getting involved with this working group and coming to the mid-year or annual meeting. In-house input is extremely important and is a voice that can be drowned out easily by the defense bar voices. So, the bottom line is that the clients are getting wise to the costs associated with not cooperating and will start requiring their outside counsel to support the Cooperation Proclamation and act accordingly, on their behalf. Two cases that need to be highlighted as a part of this cooperation trend are Judge Grimm’s Manica opinion from October (see Ralph’s Prior blog for more detailed info) and U.S. Magistrate Judge Deborah A. Robinson’s default sanctions award, in Moore v. Chertoff, Civil Action No. 00-0953, dated December 17, 2008 (also see her detailed opinion of the same day on the discovery violations in the discrimination case that led to this severe sanction). The Opinion by Judge Paul Grimm for Mancia v. Mayflower Textile Services Co., Civ. No. 1:08-CV00273-CCB (D. Md. October 15, 2008) highlights cooperation as it is mandated by the Federal Rules - it isn’t even about electronic discovery per se, just discovery. It talks about playing hide the ball and making things difficult for the other side and basically comes out on the side of common sense. Don’t just copy a set of interrogatories — do your job and tailor them to the case and situation AND keep in mind what is at stake. Is it bet-the-company litigation or is it $1M — act accordingly, cooperate accordingly. Judge Grimm is a wise man and practitioners would do well to read his opinion. I think it is the first of many by other judges that will say the same thing - something akin to what we all learned (or were supposed to learn) in Kindergarten: “Play Well With Others.” The second case I want to highlight under the cooperation trend/prediction, Moore v. Chertoff, is a recent case about the Secret Service and its hiring practices. Judge Robinson harshly worded opinion of December 17, 2008 was just the latest in a case first filed in 2000 that already had nine orders to compel and three sanction orders. It seems that it is taking the Secret Service a long time to “get the memo” on cooperation. Under the magistrate’s sanction, the Secret Service (which says it will appeal the order) will be barred from presenting its own evidence or witnesses when the lawsuit goes to trial and is limited to cross-examination of plaintiff witnesses. That is a harsh penalty for not cooperating. Unfortunately, I think we will see more sanctions orders like this before we start to see genuine cooperation. Controlling Costs 2009 will bring a laser-like focus on cutting costs. With the general economic malaise and uncertainty until the actual change in Administration, corporations are going to look at many, many ways to cut costs. Litigation is an easy target (and a big one too). Given the volume of data and the expense of reviewing documents and specifically, reviewing for privilege, corporations are looking for ways to cut costs throughout the litigation process. An article citing a recent industry study reported that “one-third of in-house counsel at companies with more than $1 billion in annual revenue reported that 20 percent or more of their yearly litigation spend was eaten up by preproduction privilege reviews. For one of our respondents, that translated into an expense of $3 million to $5 million on a single case.” That is ridiculous and corporations shouldn’t be paying that kind of money to review for privilege (see Use Technology to Your Advantage below).

Costs can be controlled in any number of ways (in fact, I do a 1-2 hour CLE on this topic; feel free to contact me if you are interested in doing this at your law firm or corporation) and should be scrutinized from the beginning of any litigation. The GIANT elephant in the room is that law firms get paid a ton of money to do document review and they don’t want to give up that cash cow. Well, I have seen many corporations over the last few months send out RFPs to 1) consolidate their litigation among law firms who are cost conscious (even to their own detriment given the review cash cow I already mentioned) and 2) consolidate the work among a group of preferred vendors. Both of those tactics are successful ways to control costs. I think corporations are also taking back control of their litigation to minimize the spiraling costs of discovery and to really control the decision-making about the litigation (when to settle, when to fight to the end, etc.) Two other ways to control litigation costs are to define a repeatable process and to assign a team who is responsible for that litigation. Defining a repeatable process is hard work, but can be very rewarding in terms of peace of mind, sanity, and lower costs. A repeatable process can include any part of the discovery (or litigation) process: from how you collect data, to how your data is de-duplicated, to how the data is reviewed (or not), to how the data is produced. If you have any of these parts of the process defined up front (or the corporation does for you), then there is a lot less wasted time, fewer periods of indecision, and less running around like a chicken with your head cut off! Repeatability also means more defensible, which is also showing up as an issue addressed in the courts - is your process defensible (see Ralph’s blog on Judge Facciola’s opinion in O’Keefe). Assembling a cracker-jack team is a great way to control costs; the team is familiar with your data, with your process, your outside counsel, your preferred vendors, your way of doing things, and above all else, is familiar with your business. The team isn’t always going to be the same size - the size of the team will depend on the size and magnitude of your litigation. The bottom line for controlling costs is to understand what you are buying (from vendors and outside counsel) and what you are not buying, as well as understanding the value of what you have bought. Effective Information Management Litigation is no longer a silo function in companies. Litigation is being looked at as a whole with document retention, document (or records) management systems, litigation hold requirements, and compliance requirements. At the heart of the issue with any of these functional areas is the management of information can you find what you want, when you want it? Most of the time the answer is no. I have to spend way too long looking for it, if I ever find it (just look at your inbox to test this belief). IT people may become a litigator’s new best friend - can they speak intelligently about the data, how it is kept, where it is kept, and how accessible it is or isn’t? These are all traits that now matter in litigation. Data maps showing a corporation’s data can go a long way to help your litigation team be prepared for a meet and confer. All of this rambling is really a long-winded way to say: who manages and how you manage your information are of paramount importance now. Cases and court opinions are catching up to real life. I think corporations and their outside counsel took a wait and see attitude with the change in the Federal Rules. Now that the new rules have been around for two years, more and more lawyers and judges are getting comfortable with them (and they have even realized that the sky didn’t fall, as predicted by some). The impact of the rules is catching up to real life in terms of the opinions of Judges; i.e. text messages are now discoverable - weren’t they always??? — Flagg v. City of Detroit, 2008 WL 787061 (E.D. Mich. Mar. 20, 2008). Given that almost all information starts out as electronic now and that the volume of data is ever expanding given the cheap cost of storage - we have to find better ways of searching and retrieving the right information. Most cases come down to a handful of important documents - finding that handful of important (or hot or smoking) documents quickly and efficiently, not to mention cost effectively, will be what drives most decisions this coming year. Use Technology to Your Advantage

Use Technology to Your Advantage

There are so many new technologies (and old ones resurfacing in the litigation context) in this area, that it is impossible to keep up with them all. Every vendor sounds like the other - just walk the halls of LegalTech and you will find that every vendor says they do it all when it comes to electronic discovery. I find it hard to believe that a coding and scanning vendor is a forensic expert (but I’ll leave that to you to decide). Educate yourself as to what tools and technology are out there and how they are best used. I was asked by a lawyer at a very large law firm while I was giving presentation on search & retrieval technologies why one would use clustering, if the cluster isn’t what you want to see - that illustrated my point perfectly - you wouldn’t. Clustering technologies have their uses, but it may not be the “use” you need at the moment. Use the right tool for the right problem, not one tool for every problem. I am seeing law firms license software (that has one purpose) and use it for all clients for all matters because they have paid a hefty licensing fee and now are trying to get a good return on their investment — this may be doing their clients a disservice if it doesn’t fit their needs for that particular litigation. Using the right tool for the right problem is easy to say, but much harder to do, because you often don’t know what problem you have until you poke around in the data a little bit. If you have keyword culled out most of the data, you will never really know what technology would best suit your problem because you will most likely not figure out your problem. It will have been culled out prematurely. So that brings me to my next point in using technology to your advantage - is keyword search dead? Keyword search is good if you want to look at a slice of data in time versus find everything related to a topic or the context of a document. Keyword search can be over-inclusive or under-inclusive depending on the keywords you are using in your search. For a more comprehensive discussion on keyword search and other search and retrieval methodologies, see the Sedona Conference’s Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery (August 2007). (For more information, I also do a CLE on these alternative approaches to keyword search). Can you just walk in to a meet and confer with a key word list and hope that your opponent will agree with it? Unlikely. Even judges are cautioning against this tactic. Saying - if you do that, you must live with the results. See Henry v. Quicken Loans. Given the Blair & Maron study (David Blair & M.E. Maron, An Evaluation of Retrieval Effectiveness for a Full-Text Document Retrieval System, 28 Com. A.C.M. 289 (1985)), I can’t believe law firms are still advocating that, and corporations are still paying, humans to review documents (for relevance or privilege). [Note: Ralph explains the study and comments on the Sedana Search & Retrieval paper in one of his prior blogs.] Technologies are available to minimize the number of relevancy and privilege decisions a review team needs to make. Making 4,000 relevancy calls certainly sounds a lot better than making 4,000,000 relevancy calls. One of the tools that can be used to do this is referred to as automated review or technology enhanced review. The graphic illustrates what this process looks like:

Methods like this technology enhanced review method can and should be used for e-discovery and judges have alluded to their acceptable use in various opinions. See Judge Facciola’s comment about “where angels fear to tread” in his O’Keefe opinion and you will see what I mean; or you can see one of his prior cases for his first hint that concept searching may be a better way to go than keyword search. I also spoke to Judge Grimm while at the Sedona Working Group 1 meeting in November and I asked him (only halfjokingly) when he was going to come out with an opinion that said these tools were OK to use and he said “I thought I already had.” See his Victor Stanley opinion. Another thing that I am seeing that is causing a lot of confusion in the market place is the use of word analytics. What does it mean? Well, a good lawyer answer would be, “it depends.” Analytics can mean what you want it to mean, kind of like statistics. Analytics can be the analysis of data from a counting perspective - how many files, what file types, what were the words used in the data set (an index), etc. And all of these things can be graphed so that they look nice (and visual learners can grasp the meaning more readily than reading all of that text and numbers). But is that really what is meant by analytics??? “Real” Analytics involves computationally difficult modeling, which isn’t quick or easy. So, look under the covers when vendors tell you they do analytics to see what type they are really talking about. (See Competence below) So, the bottom line for using technology to your advantage is that there is a lot out there, and it is a lot of technology that lawyers may not be familiar with (who knew you needed to be a statistician? I thought I went to law school so I didn’t have to do this math stuff? Isn’t that what you are thinking right now?) So, be creative in your problem solving and see what technology you can use to your advantage to save you (or your client) a ton of money. Industry Turmoil Litigation Support has always been a fractured industry: it is full of regional companies that blow-back or scan and OCR documents, or mom and pop type outfits that can help copy documents when you are in a bind, but they cannot handle large cases or electronic data. Over the last few years, shops that do coding and scanning have tried to convert themselves to a technology company by licensing dtSearch (or other search technology) to keyword search electronic data. This is not meant to cast aspersions on companies doing this, since they need to find a new sustainable business model to survive in an ever a changing industry. Over the last few years, many new companies have emerged that have written their own software or licensed someone else’s and have applied the technology to electronic documents.

Companies are being acquired left and right; lit support companies AND law firms are going out of business left and right. As an example, companies in risk management see the connection to litigation and have bought companies on the litigation side. Acquisitions are difficult in the best of circumstances. Integration of the technology and the people is difficult even when both companies want the deal to happen. I was at Intuit when we were acquiring a company a month and some acquisition integrations were easier than others. And the integrations are time consuming and de-focusing from the core business. Sometimes it can take a year before the merged company regains its focus. I think the lit support market (or litigation market) is fundamentally relationship based, which many software companies entering this space don’t realize. Currently, the relationship matters more than having the best technology. The litigation market will move slowly away from a purely relationship-based business because the effective use of technology will require it, but this change will take a few years. Despite these happenings, this industry will continue to be fractured - we are trying to solve many complex problems all at the same time - which means that it will take awhile to sort it out and find a solution that fits litigation, compliance, records management, governance, and risk management. I am not sure that it will even happen. Finding a one-size fits all solution is a tall order and no one company (or law firm, for that matter) can currently do it all. All I can say is - when hiring outside law firms, or any vendor — do your homework, check references, ask about future plans, exit strategies, profitability, etc.; no question should be off limits when so much is at stake in a litigation matter! Lots of carcasses will litter the roadside of the litigation support industry this year; you don’t want your law firm or vendor to be one of them. Competence

I tried to keep this list down to five major trends/predictions, but this one is too important to not have it’s own section: competence. I think Ken Withers speech at Georgetown’s Advanced eDiscovery Institute this November was spot on when he suggested that there are too many lawyers who think they know how to litigate in this “electronic” day and age. They may know how to litigate, but they don’t know how to find the information, review it effectively, and keep out privileged information in a cost effective way. Competence - in knowing where to look for information, what types of information, how to analyze it, etc. - are all skills that lawyers (or someone on their staff or team) need to develop in order to be truly competent. You may not find all of these skills in one person, but surely you can assemble a team to be competent in all of these areas. I would dearly love to see more effective use of

tools and technology, so that lawyers could spend less time reviewing documents and drafting privilege logs! I think lack of competence has led to some disturbing behavior and, as a General Counsel, I hope that this behavior doesn’t become a trend. The sometimes contentious relationships between in-house and outside counsel is worsening. Examples of this range from Zubulake, where in-house counsel simply sent an email and hoped that a litigation hold order is followed - they have to proactively follow up on that litigation hold order - to Qualcomm, where sanctions and fines resulted because they played hide the ball, to suits between vendors and the people who hired them (Sullivan & Cromwell suing EED, for example). These are trends and happenings that I would like to see end. See the Cooperation section above. I want to end by saying this is a fascinating industry and is a time of turmoil so — Get in, hang on, it’s going to be a bumpy ride in 2009. This entry was posted on January 1, 2009 at 3:27 pm and is filed under New Rules, Review, Search, Spoliation/Sanctions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “2009 Predictions and Trends” 1.

Rob Robinson Says: January 2, 2009 at 9:15 am

Excellent and Thought Provoking Post. As I work for a vendor in this space, I might suggest the quickest way to get past some of the vendor challenges (i.e. over-representation of capability - overrecommendation of non-essential features) is to both educate oneself on what you really need - and to question the vendor in detail about what they can do with thier technology vs. what they can aggregate using others people’s technology. Many times vendors (in all tech areas - not just legal technology) spend more time sharing with customers “how to build an elegant and fail-safe watch” when all the customer really wants is to “know what time it is”. Again - excellent post - and thanks for taking the time to write and post it. Rob Robinson OrangeLT 2. 2009 Electronic Discovery Market Trends - E-Discovery Forum Says: January 10, 2009 at 8:21 am

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Sedona Principles, 2nd Ed.

1. Electronically stored information is potentially discoverable under Fed. R. Civ. P. 34 or its state equivalents. Organizations must properly preserve electronically stored information that can reasonably be anticipated to be relevant to litigation. 2. When balancing the cost, burden, and need for electronically stored information, courts and parties should apply the proportionality standard embodied in Fed. R. Civ. P. 26(b)(2)(C) and its state equivalents, which require consideration of the technological feasibility and realistic costs of preserving, retrieving, reviewing, and producing electronically stored information, as well as the nature of the litigation and the amount in controversy. 3. Parties should confer early in discovery regarding the preservation and production of electronically stored information when these matters are at issue in the litigation and seek to agree on the scope of each party’s rights and responsibilities. 4. Discovery requests for electronically stored information should be as clear as possible, while responses and objections to discovery should disclose the scope and limits of the production. 5. The obligation to preserve electronically stored information requires reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation. However, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant electronically stored information. 6. Responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronically stored information. 7. The requesting party has the burden on a motion to compel to show that the responding party’s steps to preserve and produce relevant electronically stored information were inadequate. 8. The primary source of electronically stored information for production should be active data and information. Resort to disaster recovery backup tapes and other sources of electronically stored information that are not reasonably accessible requires the requesting party to demonstrate need and relevance that outweigh the costs and burdens of retrieving and processing the electronically stored information from such sources, including the disruption of business and information management activities. 9. Absent a showing of special need and relevance, a responding party should not be required to preserve, review, or produce deleted, shadowed, fragmented, or residual electronically stored information.

10. A responding party should follow reasonable procedures to protect privileges and objections in connection with the production of electronically stored information. 11. A responding party may satisfy its good faith obligation to preserve and produce relevant electronically stored information by using electronic tools and processes, such as data sampling, searching, or the use of selection criteria, to identify data reasonably likely to contain relevant information. 12. Absent party agreement or court order specifying the form or forms of production, production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form, taking into account the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case. 13. Absent a specific objection, party agreement or court order, the reasonable costs of retrieving and reviewing electronically stored information should be borne by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business. If the information sought is not reasonably available to the responding party in the ordinary course of business, then, absent special circumstances, the costs of retrieving and reviewing such electronic information may be shared by or shifted to the requesting party. 14. Sanctions, including spoliation findings, should be considered by the court only if it finds that there was a clear duty to preserve, a culpable failure to preserve and produce relevant electronically stored information, and a reasonable probability that the loss of the evidence has materially prejudiced the adverse party. Copyright © 2007 The Sedona Conference®. All Rights Reserved. Reprinted courtesy of The Sedona Conference®. Go to www.thesedonaconference.org to download a free copy of the complete document for your personal use only.

MUCH DATA DO YOU HAVE? CD = 650 MB = 50,000 pages. DVD = 4.7 GB = 350,000 pages. DLT Tape = 40/80 GB = 3 to 6 Million pages. Super DLT Tape = 60/120 GB = 4 to 9 Million pages. *************************** Page Estimates: 1 MB is about 75 pages; 1 GB is about 75,000 pages (pick-up truck full of documents). Aver. pgs. per email: 1.5 (100,099 pages per GB). Aver. pgs. per word document: 8 (64,782 pages per GB). Aver. pgs. per spreadsheet: 50 (165,791 pages per GB). Aver. pgs. per power point: 14 (17,552 pages per GB). *************************** For the average .PST or .NSF Email File: 100 MB .PST file is 900 emails and 300 attachments. 400 MB .PST file is 3,500 emails and 1,200 attachments. 600 MB .PST file is 5,500 emails and 1,600 attachments. A 1.00 GB .NSF file is 9,000 emails and 3,000 attachments. A 1.5 GB .NSF file is 13,500 emails and 4,500 attachments.

*************************** Note: Many variables will affect ALL of the actual numbers above, including especially large image and video files, and recursive files. *************************** Bits and Bytes Sizes: •8 bits are equal to 1 byte (one or two words), •1,024 bytes are equal to 1 kilobyte (KB). •1,024 kilobytes (KB) are equal to 1 megabyte (MB or Meg). •1,024 megabytes are equal to 1 gigabyte (GB or Gig) (truck full of paper). •1,024 gigabytes are equal to 1 terabyte (TB) (50,000 trees of paper). •1,024 terabytes are equal to 1 petabyte (PB) (250 Billion Pgs. of Text). •1,024 petabytes are equal to 1 exabytes (EB) (1 000 000 000 000 000 000 bytes).

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