ESI Discovery Strategies on the Rise – Is Your Company a Have or Have Not?

What’s your ESI discovery strategy? Will it work when it needs to? If you’re not sure about the answers to these questions, you are not alone – but you may be taking unnecessary risks. Developing an ESI discovery strategy requires pre-defining a systematic process for identifying, preserving, collecting, analyzing, filtering, processing, reviewing and producing ESI in preparation for or in response to litigation, investigations or regulatory matters. For the fourth consecutive year, Kroll Ontrack has conducted a survey of IT and in-house counsel addressing how they are managing ESI preparedness and response to litigation, regulatory matters and internal investigations, with its findings presented in an annual ESI Trends Report.[1] Over the past decade, electronic discovery has rapidly evolved and many organizations remain under-prepared to implement sound ESI discovery strategies.

It is not all doom and gloom – marking a positive shift, over half of the companies surveyed had an ESI discovery strategy in place for responding to litigation or investigatory matters, which is an increase of 13 percent from 2009. However, 27 percent of in-house counsel and 18 percent of IT were unaware whether such policies existed, which is disconcerting since legal is likely to be responsible for policy implementation. A comprehensive ESI discovery strategy requires the ability to swiftly implement a legal hold while also protecting potentially relevant data. Without the right people involved, organizations may be unprepared to face legal risks when it comes time to respond to requests for ESI.

Simply possessing a policy is not sufficient. Just as with emergency procedures and drills, testing and tweaking ESI discovery strategies could go a long way toward increasing the effectiveness of the process when the time comes to actually put it to use. However, compared to 2009, fewer respondents believed their organization’s ESI discovery strategy is repeatable and defensible, and only 38 percent of respondents had tested their policies. The survey also indicated that legal is less likely than IT to know whether their company has tested its policy, raising the same concern as above – without the key players involved, the strategy is less likely to succeed.

Despite the gap in awareness between IT and legal, corporations are exerting more control over the discovery process and are shifting the roles IT and legal are expected to play. Only 4 percent of companies believe the CIO/IT alone should manage discovery strategy, compared to 20 percent in 2009. In addition, more respondents indicated a cross-functional team should share discovery strategy responsibility, while 44 percent of respondents indicated that discovery strategy should be a shared function of both legal and IT. This marks an increased realization that the complexities of ediscovery require dual expertise and thus, collaboration of multiple departments.

In addition, most organizations – almost 80 percent in the U.S. – have now created and implemented a document retention policy, and enforcement has become a largely routine practice. Systematically retaining and disposing of a company’s documents is important for managing data storage, and an effective policy is critical for regulatory compliance, investigations and litigation preparedness and response.

Turning to information management technology and strategy, many companies have adopted comprehensive archiving technology to manage data storage and execute document retention schedules. This technology enables organizations to adjust the parameters as needed, and ensures that the document retention policy is applied consistently. Nevertheless, executing a document retention policy poses many significant challenges which require the coordination of an organization’s people, infrastructure and processes. Even though over half of companies tend to agree their archiving solution is successful and defensible, experts suggest that reality may paint a somewhat different, less optimistic picture because many of these companies are not fully implementing or optimizing the tool’s functionality.

Finally, implementing an archiving solution and effective document retention policy is just one step toward minimizing the time and money spent on decreasing data volumes which translates into less money spent on document review. Organizations can and should take additional action to reduce costs and time spent on legal discovery matters. Early case assessment (ECA) technology has proven vital in the management and reduction of costs associated with discovery, particularly with regard to document review and production. ECA technology is also useful in enabling companies to make sound and defensible decisions, and has proven to reduce data stores and decrease the cost and time spent in document review. Still, only 29 percent of respondents have used ECA technology despite the fact that document review continues to generate the bulk of discovery costs. Thus, many more companies could benefit by getting on board.

In sum, the findings in the Fourth Annual ESI Trends Report indicate that organizations have come a long way, but there is much to be learned and plenty of action to be taken. While the past decade marked an unprecedented transition in the way companies deal with discovery, more changes are sure to come. Thus, not only is it important to get up to speed, but it is critical to consistently stay abreast of changes in technology, case law and best practices for ediscovery in the corporate world.