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e-Discovery Electronic discovery and information management are serious problems faced by all large corporate and government organizations today. Akerman has developed an interdisciplinary team approach employing new metric and litigation strategies to address these problems. The Akerman e-Discovery Team provides three types of legal services in this area. Case Support. First and foremost, our e-Discovery Team, including both attorneys and IT specialists, supports Akerman trial attorneys in the electronic discovery aspects of major lawsuits. This provides our trial attorneys with a significant competitive advantage in cases involving electronically stored information (ESI) and related issues. National e-Counsel. Our e-Discovery Team serves as national coordinating counsel to assist clients in the supervision of the e-discovery aspects of litigation pending around the country. Akerman attorneys work closely with in-house counsel to help manage the work of other law firms representing the company, appearing of record where necessary to advocate the company’s position on the preservation and production of ESI and other specialized e-discovery issues. Corporate Compliance. The Akerman e-Discovery Team consults on corporate compliance issues, including the development of electronic document retention policies, employee computer usage policies, system audits, software purchases, ESI storage design, and the formation of internal e-discovery response teams. We help clients to design and implement best practices for Information governance, and the identification, preservation, collection, processing and review of ESI. Our team provides the analysis and skills needed to control costs and manage risks. Specialized Team Approach to New Problems of e-Discovery Akerman has developed a specialized team approach to respond to new electronic discovery and information management issues. These ssues are a result of the dramatic transformation in writing and recordkeeping in the past two decades. The evidence needed to prove or defend a lawsuit is no longer found on paper, nor located in filing cabinets. Today, 98% of all writings are digital - zeros and ones - and typically are stored in a chaotic fashion in extremely computer systems and networks. Moreover, the volume of this ESI is staggering. The typical Fortune 500 Company has more information in its systems than the world's largest libraries. Even small and medium size companies may store the

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paper equivalent of billions of pages of documents. Further, the average employee now sends and receives 100 emails a day and attachments to email are widely used for document transmission and storage. Many organizations are also faced with problems of text mail, instant messages, voice mail, web or cloud computing, Wikis, Internet social media, Blackberries, iPhones, thumbs drives, and the like. New technologies constantly develop that transform and improve productivity, but at the same time challenge a company’s ability to preserve and collect evidence after notice of potential litigation.

As a result, attorneys today, especially those involved with litigation, must not only understand the law and the facts of a dispute, but also the organization’s computer systems and data retention practices. They must be technologists and have special skills to preserve, identify, collect, review, and produce ESI of all kinds. Above all, they need special skills in search and analysis of ESI. Without this IT and legal knowledge, the costs and risks of e-discovery can quickly spiral out of control as we have seen recently in many cases, including In re Fannie Mae Litigation, _F.3d_, 2009 WL 215282009, (D.C. App. Jan. 6, 2009) (non-party required to spend $6,000,000 to respond to a subpoena for email). These subjects have not traditionally been taught in law schools and are skills that most trial attorneys lack. As a consequence, for the past several years e-discovery has been excessively expensive and risk filled. So much so that in December 2006 and 2008, new Federal Rules of Civil Procedure and Evidence were enacted to try to address the problems created by the discovery of ESI. Still, these new tools will only work in the hands of skilled attorneys.

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Leadership in e-Discovery Akerman was one of the first law firms to recognize the scope of this problem and invest in a team of attorneys and techs who work only in this area. The e-Discovery Team members have devised strategies and methods to use the new rules to protect clients against runaway e-discovery costs. Teams, Metrics, and Strategic Cooperation Akerman has developed a threefold approach to control e-discovery costs and risks: teams; metrics; and strategic cooperation. Teams. First, we employ an interdisciplinary team approach in the rendition of our own litigation services. But more than that, as part of our corporate compliance services, we empower our clients by helping them to form their own interdisciplinary e-discovery response teams. Where needed, we also help train our client teams to perform many of the functions necessary to manage e-discovery internally. Trained teams have a proven track record of dramatically reducing the costs of e-discovery, some by as much as 90%. Clients who have already established e-discovery teams are assisted on an ongoing basis by our service as a team coach and national coordinating counsel. As national e-counsel, we advise on e-discovery related issues in all lawsuits, help maintain consistency and accuracy of positions, and appear in local courts as needed. As an e-discovery team coach, we assist our clients in improved designs of ESI preservation and collections systems, records management policies, ESI storage architecture, and the purchase of e-discovery related software and vendor services. Metrics. Regardless of whether or not our clients have established an internal team, we can help them to respond to litigation and other demands to preserve and produce ESI in a cost-controlled manner. We do that with our second approach of metrics and quality controlled project management services. A key ingredient of the metrics approach is use of an e-discovery cost estimator spreadsheet and related methodologies we have developed. Our metric systems allow for accurate projections of e-discovery costs before they are incurred and while there is still time to seek protective orders from the court. This estimation tool, when used in connection with other new IT/Law systems and methodologies that Akerman has developed, allows for timely opposition to excessive demands for production of ESI. Strategic Cooperation. The third prong of the Akerman cost and risk control system is strategic cooperation. We avoid unnecessary and costly disputes with opposing counsel on what should be, if properly understood, simple technical issues. Akerman thus follows the "Cooperation Proclamation" developed in late

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2008 by The Sedona Conference, of which Akerman is a leading law firm sponsor.

This cooperative approach has been endorsed by leading judges around the country and other e-discovery industry leaders. Cooperation on basic e-discovery issues is possible with understanding and technical competence. Strategic cooperation from a position of strength is a key component to cost containment and risk management. Our three-fold approach of teams, metrics, and strategic cooperation provides the solution your company needs today to the e-litigation issues of tomorrow. Call or write us for more information.

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Ralph C. Losey Shareholder

CNL Center II at City Commons 420 South Orange Avenue Suite 1200 Orlando, FL 32801-3336 Main: 407.423.4000Main Fax: 407.843.6610D irect: 407.419.8430ralph.losey@akerman.com

Practice Areas e-Discovery Commercial Litigation Additional Practice Areas Information Law, Government Fraud (Qui Tam), Information Technology Law Professional Experience Ralph C. Losey is a shareholder in the Orlando office of Akerman Senterfitt and Co-Chair of Akerman’s e-Discovery Team since 2006. Ralph is an Adjunct Professor at the University of Florida College of Law teaching electronic discovery and advanced e-discovery classes and the author of the American Bar Association's feature books on electronic discovery for 2008 and 2009: Introduction to e-Discovery: New Cases, Ideas, and Techniques, (ABA 2009); and, e-Discovery: Current Trends and Cases (ABA 2008). He is also the author of the well known law review article on the mathematics underlying e-discovery: HASH: the New Bates Stamp, 12 Journal of Technology Law & Policy 1 (June 2007), and more recently on the ethics underlying e-discovery: Lawyers Behaving Badly: Understanding Unprofessional Conduct in e-Discovery, 60 Mercer L. Rev. 983 (2009). He is also the author of a popular weekly blog on e-discovery, e-Discovery Team Blog, which now averages over 250,000 visits per year. Ralph entered private practice in Orlando in 1980. Prior to becoming a shareholder at Akerman, he was a shareholder with Subin, Shams, Rosenbluth, Moran, Losey and Brennan, P.A., where, in addition to practicing law, he was in charge of the firm’s computer systems for over 15 years. Ralph has a long history in commercial litigation in both state and federal court, with an emphasis on technology-related issues, ERISA disputes,

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and fraud. He has over 70 published decisions as listed below. His experience includes one of the largest e-discovery cases in Central Florida, involving the collection and analysis of large quantities of data from hundreds of networks located throughout the country. Ralph has unique practical experience as a computer user and programmer going back to 1978. He has worked with mainframes, minicomputers, Macs and PCs, utilizing all applications imaginable, and creating and designing software in the 1980's and Internet websites in the 1990's. Ralph was the first lawyer in Central Florida to have a computer on his desk, the first to use Westlaw, and the first lawyer in Florida with an Internet website. He was a pioneer in the field of Computer Law, dating back to the early 1980s where he developed special expertise in computer database protection, software licensing, and later, Internet law; see for instance, The Legal Protection of Computer Databases, Florida Bar Journal (1991). Ralph has also worked with high-tech start-up companies, where he helped develop a foodservice database which later became the industry (IDFA) standard. Ralph has been involved in technology disputes of all kinds, including the widely publicized case concerning the private collection and sale of a database of all Florida drivers license photographs: Image Data, L.L.C. v. Sullivan, 739 So.2d 725 (5th DCA 1999), and the recent e-discovery spoliation adverse inference decision, Optowave Co., Ltd. v. Dmitri G. Nitikin,, 2006 WL 3231422 and 2006 Lexis 81345 (M.D. Fla. November 7, 2006). He was also in the first group of attorneys to be certified by the Florida Supreme Court as a Mediator of Computer Law related disputes in 1989, and has extensive experience in alternative dispute resolution. Recognition Selected to Florida Super Lawyers (2009) AV Rated by Martindale Hubbell Certified Computer Law Mediator, Florida Supreme Court (1989) Certified Arbitrator, Orange County Bar Association Who's Who in American Law (since 1985) Published Books

Losey, Ralph; Introduction to e-Discovery: New Cases, Ideas, and Techniques, American Bar Association (2009).

Losey, Ralph; e-Discovery: Current Trends and Cases, American Bar Association (2008).

Losey, Ralph; E-Discovery, a Thompson West Report and Guide to the New Rules (compendium wherein Losey contributed the Chapter on "Metadata.") January 2008 - publication by Andrews Publications.

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Losey, Ralph; Your Cyber Rights and Responsibilities: The Law of the Internet, Chapter 3 of Que's Special Edition Using the Internet, (McMillian Publishers, 3rd Ed) 1996.

Published Articles

Lawyers Behaving Badly: Understanding Unprofessional Conduct in e-Discovery, 60 Mercer L. Rev. 983 (2009).

Losey, Ralph; HASH: the New Bates Stamp, 12 Journal of Technology Law & Policy 1 (June 2007).

Losey, Ralph; Protecting Your Intellectual Property Profit Magazine (1992).

Losey, Ralph; "The Legal Protection of Computer Databases," The Florida Bar Journal (1991).

Bruch Creates Split in Circuits On Standard of ERISA Appellate Review, The National Law Journal (1991).

Recent Classes/Seminars

New Developments and Ethics in e-Discovery; Florida Attorney General's Economic Crimes Unit Annual Conference (2009, Orlando).

e-Discovery and Electronic Content Management; EMC Annual Writers Conference on Electronic Content Management (New York City, 2009).

Information Management Panel; EDRM Search Project Panel; Introduction to EDD Panel; Litigation Support Leaders Conference (2009 Washington, D.C.).

Search Techniques Panel; Latest Cases Panel; Forms of Production Panel; Privilege, Conflicts and Professional Responsibility Panel. Electronic and Digital Evidence 2009 (2009, Texas State Bar).

Latest Cases Panel; Ethics and e-Discovery. ABA Techshow 2009 (2009, Chicago).

Electronic Records Management and e-Discovery; Two Day Presentation to NASA with Jason Baron (2009, Cape Kennedy).

New Trends and Cases in e-Discovery; Florida Attorney General's Economic Crimes Unit Annual Conference (2008, Orlando).

E-Discovery: An A – Z Workshop, West Legal Works (2008, Miami).

Managing Today's Discovery Process: The Evolving Role of the Paralegal & Litigation Support Professional, ALM Event (2008, New York City).

Presentation to In-House Counsel on Corporate e-Discovery Teams (2008, Jacksonville).

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E-Discovery Panel Presentation, Lex Mundi North America Regional Conference Presentation (2008, Miami).

Cutting Edge Developments in Search & Retrieval Technologies. Georgetown 5th Annual Advanced e-Discovery Institute (2008, Arlington).

Ethics and e-Discovery, Bench Bar Conference of Hillsborough County (2008, Tampa).

Ethics and Professionalism In The Digital Age, The Walter F. George School of Law (2008, Macon).

A Sedona E-Discovery Evening at the University of Florida, University of Florida (2008, Gainesville).

Viewing E-Discovery Through The Corporate Veil, The Masters Conference (2008, Washington, DC).

E-Discovery/Record Retention, Florida Hospital Association (2008, Orlando).

Corporate eDiscovery Teams: The New Gold Standard of eDiscovery Practice?, Legal IQ, a division of IQPC (2008, Atlanta).

Document Management & E-Discovery Corporate Counsel Forum, American Conference Institute (2008, New York City).

The Match Game: Searching and Sampling ESI. ALM Event (2008, Los Angeles).

E-Discovery Teams: The New Gold Standard, Harvard Club e-Discovery Program, ALM Event (2008, New York City).

In-House Counsel View of Corporate e-Discovery Teams (2008, Jacksonville Bar Assoc.)

E-Discovery Panel Presentation, Lex Mundi North America Regional Conference Presentation (2008, Miami).

E-Discovery and Computer Forensic Investigations 101: When Does Your Case Warrant the Full 'CSI' Treatment?, Moderator and Panelist, West Legal Works Webinar (December 12, 2007).

The e-Discovery Search Quagmire: New Approaches to Finding Relevant Needles in the Electronic Haystack, Moderator and Panelist, West Legal Works Webinar (December 5, 2007).

E-Practice in the Electronic Age, Speaker, Masters Conference, (October 25-26, 2007).

Introduction to e-Discovery, Florida Bar Association Seminar, Speaker (June 28, 2007).

Introduction to e-Discovery: Prosecutor's Version, Florida Attorney General Office Seminar, Speaker (June 27, 2007).

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What the New e-Discovery FRCP Means for Your Business", LiveOffice Podcast, Speaker and Panelist (June 7, 2007).

Emerging Standards of Metadata Production, National Webcast Seminar by Navigant Consulting, 2007.

Solving the e-Discovery Problem: a Practical Team Approach, Keynote Luncheon Presentation at the Association of Corporate Counsel, New Jersey Chapter, CLE on e-Discovery and Modern Records Management, 2007.

Rules and Ramifications of the New Rules of e-Discovery, National Business Institute Webcast Seminar on Electronic Discovery, 2007.

Myriad of Issues Created by the New Rules of e-Discovery, National Business Institute Webcast Seminar on Electronic Discovery, 2007.

ERISA and the New e-Discovery Rules, West LegalWorks 19th Annual ERISA Litigation Conference, 2007.

Introduction to e-Discovery, Florida Bar Association Seminar (2007, Orlando).

Introduction to e-Discovery: Prosecutor's Version, Florida Attorney General Office Seminar, Speaker (2007, Orlando).

What the New e-Discovery FRCP Means for Your Business", LiveOffice Podcast, Speaker and Panelist (2007).

Emerging Standards of Metadata Production, National Webcast Seminar by Navigant Consulting (2007).

Solving the e-Discovery Problem: a Practical Team Approach, Keynote Luncheon Presentation at the Association of Corporate Counsel, New Jersey Chapter, (CLE on e-Discovery and Modern Records Management 2007).

Rules and Ramifications of the New Rules of e-Discovery, National Business Institute Webcast Seminar on Electronic Discovery (2007).

Myriad of Issues Created by the New Rules of e-Discovery, National Business Institute Webcast Seminar on Electronic Discovery (2007).

ERISA and the New e-Discovery Rules, West LegalWorks 19th Annual ERISA Litigation Conference, 2007.

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Representative Clients and Industries Metropolitan Water District of Southern California Harris Corporation The National Companies Medical Staffing Networks Samsung Hartford Insurance CIGNA High Technology; Computer, Software and Internet Industries Insurance Industry Health Care Military-Industrial Bar Admissions Florida Court Admissions U.S. District Court, Northern District of Florida U.S. District Court, Middle District of Florida U.S. District Court, Southern District of Florida U.S. Court of Appeals, Eleventh Circuit U.S. Supreme Court Professional Memberships and Activities The Florida Bar The Sedona Conference American Bar Association Federal Bar Association Orange County Bar Association Community Involvement

Negro Spiritual Scholarship Foundation

Tee-Lo Junior Golf Foundation

Winter Park High School Crew Boosters (Past President 2001) Education 1979: J.D., University of Florida College of Law, Honors 1973: B.A., Vanderbilt University Institute of European Studies, Vienna, Austria, 1971-1972

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Published Decisions • Barron v. General Elec., No. 8:05-CV-1046-T-17MAP, 2006 WL 905514 (M.D.

Fla. 2006) • Baker v. Hartford Life and Accident Insurance Co., 371 F. Supp. 2d 1352 (M.D.

Fla. 2005) • Barchus v. Hartford Life and Accident Ins. Co., 320 F. Supp. 2d 1266 (M.D. Fla.

2004) • Belknap v. Hartford Life and Accident Ins. Co., 389 F. Supp. 2d 1320 (M.D. Fla.

2005) • Bird v. Eastman Kodak Co., 290 F. Supp. 2d 1117 (M.D. Fla. 2005) • Brevard Emergency Services v. EmCare, Inc., No. 6:04-CV-1892-ORL-28-

JGG, 2005 WL 1074272 (M.D. Fla. 2005) • Chilton v. Prudential Ins. Co. of Am., 124 F. Supp. 2d 673 (M.D. Fla. 2000) • Chiroff v. Life Ins. Co. of N. Am., 142 F. Supp. 2d 1360 (S.D. Fla. 2000) • Clermont Builders Supply, Inc. v. General Const. & Design, Inc., 423 So. 2d

518 (Fla. 5th DCA 1982) • Cohen v. Hardman, 416 So. 2d 498 (Fla. 5th DCA 1982) • Cook v. Theme Park Ventures, Inc., 633 So. 2d 468 (Fla. 5th DCA, 1994) • Crume v. Metropolitan Life Insurance Co., 417 F. Supp. 2d 1258 (M.D. Fla.,

Feb. 14, 2006) • Crume v. Metropolitan Life Insurance Co., 387 F. Supp. 2d 1212 (M.D. Fla.

2005) • Crume v. Metropolitan Life Insurance Co., 388 F. Supp. 2d 1342 (M.D. Fla.

2005) • Curran v. Abbott Laboratories Extended Disability Plan, 331 F. Supp. 2d 1376

(M.D. Fla. 2004) • Curran v. Abbott Laboratories Extended Disability Plan, 2005 WL 894840 at *8

(11th Cir. 2005), aff'g order granting summary judgment, 331 F. Supp. 2d 1376 (M.D. Fla. 2004)

• Diaz v. Verizon Wireless Employee Benefits Committee, et al., 222 Fed.Appx. 879 (11th Cir., March 15, 2007), aff'g order granting summary judgment, 2006 WL 2471517 (M.D. Fla., August 24, 2006)

• DiSanto v. Wells Fargo & Co. and Metropolitan Life Insurance Co., Case No. 8:05-cv-1031-T-27MSS (M.D. Fla., August 24, 2007)

• Dowling v. Metropolitan Life Insurance Co., 355 F. Supp. 2d 1311 (M.D. Fla. 2004)

• Dunn v. Harris Corp., ___ F.Supp.2d ___, 2008 WL 2370172 (M.D. Fla. 2008) • Earnest v. Metropolitan Life Ins. Co., 291 F. Supp. 2d 1327 (M.D. Fla. 2003) • Featherston v. Metropolitan Life Insurance Co., 389 F. Supp. 2d 1302 (N.D.

Fla. 2005) • Featherston v. Metropolitan Life Insurance Co., 223 F.R.D. 647 (N.D. Fla.

2004)

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• Fick v. Metropolitan Life Ins. Co., 320 F. Supp. 2d 1314 (S.D. Fla. 2004) • Fick v. Metropolitan Life Ins. Co., 374 F. Supp. 2d 1271 (S.D. Fla. 2004) • Fleming v. Metropolitan Life Ins. Co., No. 8:06-CV-88-T-23TBM, 2006 WL

709560 (M.D. Fla., March 16, 2006) • Ganceres v. Cingular Wireless Health and Welfare Benefits Plan for Non-

Bargained Employees, etc., et al., Case No. 3:04-cv-199-J-32-MMH, 2006 WL 2644919 (M.D. Fla. 2006)

• Hallford v. Metropolitan Life Ins. Co., 158 Fed.Appx. 198, 2005 WL 3159939 (11th Cir. 2005), aff'g order granting summary judgment, 367 F. Supp. 2d 1353 (N.D. Fla. 2005)

• Hufford v. Harris Corporation, 322 F. Supp. 2d 1345 (M.D. Fla. 2004) • Image Data, L.L.C. v. Sullivan, 739 So. 2d 725 (Fla. 5th DCA 1999) • Image Data, L.L.C. v. Sullivan, 745 So. 2d 567 (Fla. 5th DCA 1999) • Jordan v. Lakeland Regional Medical Center, Inc., 153 F. Supp. 2d 1333 (M.D.

Fla. 2001) • Kennedy v. Metropolitan Life Insurance Co., Verizon Claims Review

Committee, et al, 357 F. Supp. 2d 1346 (M.D. Fla. 2005) • Kirk v. Metropolitan Life Ins. Co., 331 F. Supp. 2d 1361 (M.D. Fla. 2004) • Lake v. Hartford Life and Accident Ins. Co., 218 F.R.D. 260 (M.D. Fla. 2003) • Lake v. Hartford Life and Acc. Ins. Co., 320 F. Supp. 2d 1240 (M.D. Fla. 2004 ),

aff'd per curiam, 126 Fed. App'x. 463 (11th Cir. 2004) • Lake v. Hartford Life and Acc. Ins. Co., No. 8:03-CV-237-T-26EAJ, 2004 WL

1253784 (M.D. Fla. 2004) • Lowe v. Telesat Cablevision Inc., 825 F. Supp. 1000 (M.D. Fla., 1993) • Lowe v. Telesat Cablevision, Inc., 837 F. Supp. 410 (M.D. Fla., 1993) • Mack v. Metropolitan Life Insurance Co., No. 06-14406, 2007 WL 1720471

(11th Cir. June 15, 2007) • Mack v. Metropolitan Life Insurance Co., 2006 WL 2052365 (M.D. Fla. July 21,

2006) • Metropolitan Life Ins. Co. v. Carter, No. 3:04-CV-668-J32HTS, 2005 WL

2810699 (M.D. Fla. 2005) • Metropolitan Life Ins. Co. v. Carter, No. 3:04-CV-668-J32HTS, 2005 WL

1668865 (M.D. Fla. 2005) • Meyer v. Hartford Life and Accident Ins. Co., 320 F. Supp. 2d 1256 (M.D. Fla.

2004) • Mutual of Omaha Ins. Co. v. Gold, 669 So. 2d 362 (Fla. 5th DCA 1996) • Mutual of Omaha Ins. Co. v. Gold, 681 So. 2d 1204 (Fla. 5th DCA 1996) • Mutual of Omaha Ins. Co. v. Wood, 679 So. 2d 69 (Fla. 5th DCA 1996) • Nicholson v. Ariko, 539 So. 2d 1141 (Fla 5th DCA 1989) • Nicholson v. Ariko, 565 So. 2d 843 (Fla. 5th DCA 1990) • Novak v. Irwin Yacht and Marine Corp., 986 F.2d 468 (11th Cir. 1993) • Onofrietti v. Metropolitan Life Ins. Co., 320 F. Supp. 2d 1250 (M.D. Fla. 2004) • Optowave Co., Ltd. v. Dmitri G. Nitikin, et al, 2006 WL 3231422 and 2006 Lexis

81345 - Case No. 6:05-cv-1083-ACC-DAB, Doc. 90 (M.D. Fla. 2006).

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• Parness v. Metropolitan Life Ins. Co., 291 F. Supp. 2d 1347 (S.D. Fla. 2003) • Providence v. Hartford Life and Accident Insurance Company, 357 F. Supp. 2d

1341 (M.D. Fla. 2005) • Rementer v. Metropolitan Life Ins. Co., No. 6:04-CV-1148-ORL-22-JGG, 2006

WL 66721 (M.D. Fla. 2006) • Revello v. Life Insurance Company of North America, No. 6:03-CV-1787-ORL,

2004 WL 1253887 (M.D. Fla. 2004) • Riccard v. Prudential Ins. Co., 307 F.3d 1277 (11th Cir. 2002) • Ridge v. Hartford Life and Acc. Ins. Co., No. 8:03-CV-1871-T-26EAJ, 2005 WL

889964 (M.D. Fla. 2005) • Ridge v. Hartford Life and Acc. Ins. Co., 339 F. Supp. 2d 1323 (M.D. Fla. 2004) • Sarasota Cloth Fabric & Foam, Inc. v. Benes, 502 So. 2d 1354 (Fla. 5th DCA

1987) • Sarasota Cloth Fabric & Foam, Inc. v. Benes, 482 So. 2d 574 (Fla. 5th DCA

1986) • Sejdic v. Group Long-Term Disability Plan for Employees of Homeside

Lending, Inc., et al, 348 F. Supp. 2d 1313 (M.D. Fla. 2004) • Shaler v. United of Omaha Life Ins. Co., 718 So. 2d 953 (Fla. 5th DCA 1998) • Shaw v. Connecticut General Life Ins. Co., 353 F.3d 1276 (11th Cir. 2003) • Shideler v. Connecticut General Life Insurance Company, et al, 563 So.2d

1082 (Fla. 5th DCA 1990) • Snider v. Cingular Wireless Health and Welfare Benefits Plan for Non-

Bargained Employees, etc., et al, Case No. 3:04-cv-198-J-32-MMH, 2006 WL 2400952 (M.D. Fla. 2006)

• Thomas v. Lockheed Martin Information Sys., 155 F. Supp. 2d 1316 (N.D. Fla. 2001)

• Torres v. Pittston Co., 346 F.3d 1324 (11th Cir. 2003) • Walker v. Connecticut General Life, 4 F.3d 999 (Table) (11th Cir. 1993) • Wall v. Pennzoil-Quaker State Company et al, 358 F. Supp. 2d 1169 (S.D. Fla.

2004)

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Nine Essays on e-Discovery

e-Discovery: Current Trends and Cases (ABA 2008) Excerpts from the book by Ralph C. Losey

Weekly Blog: e-Discovery Team www.ralphlosey.wordpress.com

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Nine Essays on e-Discovery 1. Top Ten Reasons e-Discovery is a Major Headache for Most

Companies and Lawyers 2. Introduction to the Problem of e-Discovery and the

Interdisciplinary Team Solution 3. When and Why Should You Start an e-Discovery Team 4. e-Discovery Teams: Self-Organization and Development of

Evidence Preservation Protocols 5. What Game Does an e-Discovery Team Play? 6. e-Discovery Teams Can Meet the Challenges of the

“Zubulake Duty” and Control Excessive Costs 7. Practice Under the New Rules: An e-Discovery CLE by BNA 8. The Sedona Conference Releases Two New Must-Read

Commentaries on "Email Management" and "Legal Holds" 9. Rule 37(f) Safe Harbor Requires Routines That Most

Companies Lack

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Top Ten Reasons e-Discovery is a Major Headache for Most Companies and Lawyers Most corporate counsel agree that Electronic Discovery is the major problem in litigation today. Here are the Top Ten reasons: 1. The costs to preserve, find and review electronic evidence, including emails, are astronomical and getting worse every day. See Eg., Kentucky Speedway v. NASCAR, 2006 U.S. Dist. LEXIS 92028 (E. D. Ky. Dec. 18, 2006) ($3,000,000 in expenses in 5 months for e-discovery alone). According to an unconfirmed report by a Microsoft insider, it now spends an average of $20 million per case. It is no surprise that e-discovery is now the hot field for entrepreneurs, and that it has mushroomed into a $2 billion a year industry.

2. The unacceptably high risks of losing a case, or being forced to settle a case because of e-discovery, rather than the merits. The mistakes in e-discovery are pervasive and often disastrous. The biggest of them all is the Coleman v. Morgan Stanley case in Florida, which resulted in a $1.5 billion verdict. Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., 2005 WL 674885 (Fla.Cir.Ct.. 2005) (although the decision has preliminarily been reversed, the Florida courts are not through with this yet). Also see: GTFM, Inc. v. Wal-Mart, 2000 WL 1693615 (S.D.N.Y. Nov. 9, 2000), (sanctions); Exact Software v. Infocon, 2006 WL 34999992 (N.D. Ohio) (Dec. 5, 2006) (more sanctions); Phoenix Four, Inc. v. Strategic Resources Corp., 2006 WL 1409413 (S.D.N.Y. 2006) (still more sanctions).

3. Electronic records are easy to destroy or alter, but the bad emails and instant messages never seem to go away! The smoking guns in court rooms today are found in computers, not filing cabinets. In fact, 98% of all business records are now electronic, and 80% of them are never converted to paper or other tangible form. So if you don’t look for the ESI, you will miss the key evidence.

4. The amount of electronic information stored by most corporations today is staggering. In the Enron case, they found twice as much information stored in its computers than in the Library of Congress; over 78 billion pages. As of 2006, the world is sending 60 billion emails per day. The volume makes it impossible to retrieve and review everything in most large cases today, and nearly impossible for anyone not an expert to find the needles in the haystack.

5. The computer systems and information storage systems have become extremely complex. It is difficult for any one expert to understand it all. The

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complexity makes mistakes almost inevitable, and explanation to supervising judges and magistrates near impossible.

6. Most companies do not have functional ESI management policies. If they do, they are not monitored, much less enforced. With thumb drives and online accounts today so commonplace, most companies have no idea where all their business records and communications really are, even if they know where they are supposed to be.

7. There have been so many mistakes with e-discovery in the past several years that many judges and magistrates are now upset. They will no longer tolerate mistakes. As one judge puts it the “pure heart, empty head” defense will no longer work in his courtroom. Most judges today are reacting by imposing high standards and duties upon the parties and legal counsel. See eg. Zubulake v. UBS, 229 F.R.D. 422 (S.D.N.Y. 2004) (”Zubulake V”) as discussed further in the blog “Duties” page above.

8. The New Federal Rules of Civil Procedure make the problem worse by accelerating all deadlines and prohibiting the avoidance of e-discovery issues until the end of a case. The only way to comply with the new rules is to be extremely well prepared, even before a law suit is filed, and that requires tech-savvy legal counsel, and well-prepared litigants.

9. Most lawyers and law firms are unprepared for e-discovery. Attorneys need to know the basics of information management and computer technology to handle e-discovery issues correctly, but in point of fact, most do not. They do not even like the subject. As everyone in the profession knows, most trial lawyers are big talkers, not geeks. If a law firm does have one or two attorneys with some computer-tech expertise, they are typically the youngest with little or no litigation experience.

10. Most corporations and in-house legal counsel are unprepared for e-discovery. They may have fine IT departments, and great inside legal counsel, but the two departments speak very different languages and do not work well together.

In my opinion, the only viable solution to the problem of e-discovery is for a company to create its own internal e-discovery readiness response team (”team”). The alternative of delegating everything to expensive e-discovery vendors, and dozens of outside counsel around the country, has been tried and does not work. Of course vendors are still key, and so are outside counsel, but the corporate client needs to be in charge of its own destiny. The internal e-discovery team is the best hope to reduce costs, manage risks, and better control quality.

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The team is composed of in-house attorneys, IT personnel and management. It rests on the three pillars of law, information science, and technology. The team functions to implement litigation holds, collect data within the timeline of new rules, retain e-discovery vendors, supervise local counsel, and improve electronic records systems. A few companies have done this already and it works: Cisco, Pfizer, Halliburton, and Merrill Lynch, to name a few. But experience shows it is hard to get law and IT to work together and communicate. Most companies want and need outside help to set up their team. That is where I come in, and the services of my law firm. We make the team happen. Our e-discovery program is unique because it is designed to empower the client by helping the company to start and run their own team. We serve as team coach and trainer. The client is the owner, and has its own captain. Just like a coach sometimes has to step up and argue with the referees, we also sometimes appear in court when necessary to advocate the team’s position, and assist local counsel on these issues. In that sense, we also serve as a national e-counsel. It is a challenging service, but one we love to perform!

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Introduction to the Problem of e-Discovery and the Interdisciplinary Team Solution Litigation today is more expensive and risk-filled than ever before, but not because of run away juries or expensive trials. Although these possibilities remain as real threats, in fact 98% of all federal court cases are resolved without trial. Litigation today is difficult primarily because of discovery. In the areas of commercial and employment litigation, discovery can involve forced disclosure of massive amounts of internal, otherwise secret, business records and information. The most burdensome discovery today is for email and other electronic documents located on a litigant’s computers, so called “electronic discovery” or “e-discovery.” The costs associated with ”needle in the haystack” type e-discovery requests can be enormous, sometimes far exceeding the total amount in controversy. These same issues also apply to state and federal government investigations where no suit has been filed. The problem of e-discovery reached such epidemic proportions that on December 1, 2006, the Supreme Court promulgated New Rules of Civil Procedure for all federal courts to follow to try to address these issues. The new rules govern what is referred to as electronically stored information (ESI), which includes not only all computer files, but all other electronic information, such as voice mail and videos. Although the rules clarify certain issues, they also impose very stringent time requirements that most U.S. businesses and other large organizations are ill prepared to meet. The new rules, combined with the new email and Internet-oriented culture in both business and society, create serious information management difficulties for everyone. For example, the rules now require companies to preserve and produce within 100 days of the commencement of a lawsuit all potentially relevant ESI within their employees’ computers and other storage devices (such as thumb drives and cell phones), no matter where they are located. Strict compliance is starting to be enforced as judges across the country go on record as stating that the "pure heart, empty head” defense will no longer be tolerated in the area of e-discovery. All litigants are now subject to severe penalties for the accidental deletion of ESI that might be relevant to a lawsuit or government

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investigation. Liability may accrue even if the ESI is lost before notice of the suit or investigation, if a court later determines that the proceeding should reasonably have been anticipated. Penalties will almost certainly accrue if the destruction of ESI occurs after the suit is filed. The $1.5 billion verdict against Morgan Stanley in the Coleman case in Florida, even though preliminarily reversed on other grounds, shows how important effective preservation procedures have become. So too does the well known Zubulake case in New York against the Swiss bank, UBS Warburg, which resulted in a $28 million dollar jury verdict for sexual discrimination. UBS Warburg lost the case in large part because of sanctions for missing emails, and not the actual merits of the case. In a world where one hundred billion emails are sent daily and most large corporations have more information stored on their computers than the biggest libraries in the world, the accidental loss of ESI can easily occur. The Zubulake and Coleman cases show that these mistakes can be very costly in the U.S. judicial system. In my opinion, the only effective solution to this problem is the formation of internal, corporate e-discovery teams. My law firm’s e-discovery department is dedicated to assisting companies to carry out this task. Although the function of the team is primarily legal, the teams are necessarily multidisciplinary, comprised of representatives of IT, management and law. The multidisciplinary team approach to e-discovery unquestionably works, but it is also true that these teams are difficult to setup, train, and function effectively. The cultures of these three groups, even within an otherwise close-knit company, are very different, and so too are their languages and gestalt. Members of the team need to be carefully chosen and rewarded for participation. But the most important components for success are training and group work on a detailed, specific set of tasks. The group work establishes the common language and understanding that will eventually bring the members together and allow them to function as an effective team.

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When and Why Should You Start an e-Discovery Team? Should every organization have an e-discovery team? If a company has only a few computers, say less than 100, or rarely gets sued and has less than 3 lawsuits going at a time, then it does not need one. It is probably cheaper to just hire outside counsel and vendors to handle e-discovery cases when they occasionally arise. But for everyone else, especially in these times of cost-cutting budgets, it is a necessity. That is because, as my friend Ed Foster likes to say, "it can save your company boatloads of money!" It saves on outside counsel fees and e-discovery vendor costs. It also saves on inflated settlements to avoid the expense, hassle and risks of e-discovery. Yes, a corporate e-discovery team does cost some money to setup, but as Benjamin Franklin said: “An ounce of prevention is worth a pound of cure.” Today millions of British pounds and U.S. dollars are being spent on e-discovery cures. This expense is a harsh reality of litigation. So too are the risks, mistakes and sanctions that frequently occur when a company puts its fate in the hands of ill-prepared legal counsel or profit-motivated vendors. Even in the best of circumstances, it is all too easy for a medium or large size company to burn through a few million dollars in e-discovery expenses in just a couple of months. See Kentucky Speedway, LLC v. NASCAR, 2006 U.S. Dist. LEXIS 92028 (E. D. Ky. Dec. 18, 2006). The solution is for a company to take control of its information and its e-discovery activities, and not ignore the problem or over-delegate it to others. This means forming an internal e-discovery team. But don’t just take Ed Foster’s word for it. Ask the people and companies who have already formed e-discovery teams. For instance, ask Jeff Ghielmetti of Cisco Systems, who has more experience at this than anybody. Jeff often tells the story of how Cisco established the first internal corporate e-discovery team after the stock market crash of 2000-2001. At that time, Cisco was hit with a flood of litigation, often involving millions of pages of electronic documents. One of the first cases came with a $23,500,000 bill for e-discovery! Cisco could not continue at that kind of burn rate, so out of necessity they decided to try something new, and go in-house. For help they turned to Jeff, a Cisco engineer, not a lawyer, but

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he had the full backing of Cisco’s forward-looking (a/k/a “desperate”) legal department. Under Jeff Ghielmetti’s direction, Cisco turned away from the traditional model of hiring law firms and e-discovery vendors to manage their data preservation, collection and analysis, and they started to do it themselves. Cisco set up the first internal, multi-disciplinary corporate e-discovery team. It also developed its own proprietary software and computer systems to help the team perform its tasks. Jeff reports that Cisco’s program has been a huge success, not only in cutting costs, but also in better management of risks. According to Cisco’s case study, “Cisco has been able to reduce its discovery costs by approximately 97 percent-for an overall reduction in litigation expenses of 64 percent.” Those are pretty impressive numbers. For detailed information on the Cisco team and the centralized Storage Area Network (SAN) it developed for e-discovery, see How Cisco IT Uses SAN to Automate the Legal Discovery Process. If you don’t want to take both Ed and Jeff’s word for it, then you could also ask Laura Kibbe. She is the young attorney who helped Pfizer form its first e-discovery team in 2005. As a result of her work, Laura was named one of four of Corporate Counsel Magazine’s trailblazers in 2006. The magazine article on Laura summed up the benefits of her work:

Why pay millions for an in-house e-discovery system when, as most companies do, you can outsource the work? Simple — farming it out to law firms and consultants, all of whom really want the job, can cost even more. Especially when you are an oft-sued drug company like Pfizer. In just one year, Kibbe says, the new system saved “multiple millions of dollars,” and served up several side benefits. She gave Pfizer a “repeatable process” that can find and extract information quickly. Pfizer GC Allen Waxman is proud of what Kibbe has accomplished in just under two years. Her response team, Waxman says, has reaped “substantial efficiencies and added effectiveness.” . Probably the best thing Kibbe brings to the tech table is the fact that she’s a lawyer who has to use the system. That means that she doesn’t need to rely on outside firms, who sometimes make promises to produce data that their client can’t keep. This way, Kibbe can make sure that what Pfizer tells one court it can or can’t do remains consistent in all courts.

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You could also ask Kevin Esposito, the Pfizer attorney who is the current director of its e-discovery team. I have written about him before as one of the lead speakers at the ABA 1st Annual National Institute on E-Discovery. He is adamant that the key to significant costs savings in the long run is to spend the time and money up front to develop an effective e-discovery team. He states this requires careful mapping of all a company’s data, and establishment of sound processes and procedures for preservation, identification and collection. You could also ask Jonathan Eisenberg of Merrill Lynch. He co-heads its Global Litigation department and supervises its e-discovery team. Jon realized that Merrill Lynch should begin to take e-discovery in-house when he saw how many of his experienced outside counsel were becoming ineffective in securities cases because of the complexities of e-discovery. The attorneys were experts in securities law and litigation, but not in e-discovery. Merrill Lynch responded and now has a well-developed team that performs most of the e-discovery work itself, instead of relying on its outside counsel or vendors. Jonathan describes an eight-step process that Merrill Lynch developed to manage e-discovery:

1. Established a full time in-house interdisciplinary team of legal and IT professionals dedicated to electronic discovery, i.e., formed and funded an e-discovery team. 2. Established detailed litigation hold procedures that were later refined and improved over hundreds of cases. Jonathan describes this key process as having seven steps: a) ID the custodians; b) inventory and map the data sources, which takes many months the first time through; c) send written notices and reminders to all impacted employees; d) monitor and enforce compliance with the lit-hold; e) interview the key players; f) collect the discoverable information; g) export data for production to outside counsel. To that list, I would add the imposition of automated software holds and suspension of usual document retention procedures. 3. Rewrote and implemented an aggressive document destruction policy. In my experience, this is a very challenging and time-consuming process, especially if a company does not already have an effective electronic document retention policy in place.

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4. Purchased and refined custom search software to quickly locate electronically stored information across all of their systems that might be relevant to a particular case. 5. Developed a system and software tools to process all ESI and filter out all duplicates and other obviously non-responsive data before export to vendors for further processing and analysis. 6. Purchase and use what Jonathan calls Encase-type software tools to image and search for non-email ESI. 7. Located and trained a pool of reliable contract lawyers to review pre-productions. 8. Trained several of their IT technicians to be forensic experts.

If Ed, Jeff, Laura and Jonathan’s references were not enough, you could also ask James Wright. He is the project manager who leads Halliburton’s team. Jim has a PowerPoint online that lists some of the key points on e-discovery teams. The presentation, which I have heard and previously written about, begins by summarizing some of the benefits of taking e-discovery in-house.

Why should corporations participate in e-discovery? 1. Corporations own all the risk of litigation and pay all the costs. 2. It’s just not a paper world anymore: data volumes changed everything. 3. Corporations know their e-data better. 4. E-Discovery management is inconsistent among law firms. 5. Law firms risks & incentives differ from corporations: law firms have a more conservative methodology towards discovery; a de-facto disincentive exists for data reduction.

The fifth point made by Halliburton’s team captain is two-fold. First, law firms are naturally more cautious in making decisions and will always err on the side of

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including more data in the preservation, collection and review set. Secondly, there is a “disincentive,” which Jim in person bluntly calls a conflict of interest, for law firms where attorneys are paid by the hour to review documents they decide may be responsive. He implies it’s like hiring the fox to guard the hen house. Vendors are of course in the same position, since most charge by the megabyte of processed data. And if all that were not enough, you could also ask Patrick Oot, the young but senior counsel at Verizon who leads its new e-discovery team. Patrick says that:

Managing electronic discovery is probably a number-one initiative at all legal departments. Depending on the volume of litigation an organization has, this can be one of largest line items in your [legal] budget.

Patrick reports that his team approach is keeping vendor prices very competitive and Verizon’s overall e-discovery costs are now under control. Still, you need good vendors and outside counsel to represent you and handle much of the work. Patrick complains about staffing and observes that it is difficult to find experienced senior e-discovery counsel at many law firms. He urges law firms to invest in their own e-discovery teams so that they can better assist their clients’ teams.

The culture at many law firms dictates electronic discovery counsel and director positions as nonpartner track positions. Although firm culture is shifting, many firms fail to place leadership emphasis with true decision-making power on this crucial position. It takes months to find a solid project management candidate. Firms need to re-educate their teams.

As an e-discovery attorney in a law firm myself, a partner by the way, I could not agree more. All of the outside consultants with real expertise in the area agree with the need for e-discovery teams, at least the ones not employed by some of the smaller e-discovery vendors. In fact, Ben Hawksworth of Ernst & Young calls the internal corporate team approach the new “holy grail” of e-discovery. Still not convinced? Then it is unlikely that more references will persuade. To be honest, most companies are not moved by reason to form an e-discovery team, they are moved by experience, bad experience. Typically, a team is not formed until after a bad case. By that time, boatloads of money have already been spent

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for fees, costs, and a settlement with the plaintiff. The size of the loss in one case is typically far more than the total cost of team formation. Remember, Cisco was motivated to start the first e-discovery team by a $23,5000,000 bill. This tendency of large organizations to ignore the advice of Ben Franklin makes the plaintiff’s bar quite happy, and more Zubulake type judgments happen every day. I hope that does not happen to you, but without an effective team in place, it is very likely. It is just like Robert D. Owen, the Co-Chair of Fulbright & Jaworski’s e-discovery group, likes to say: instead of taking the time to get prepared, many companies have decided to play “the e-discovery lottery. They have decided to take the chance that they won’t be hit. It’s a gamble.” I agree completely with Bob. Many companies are gambling a boatload of money they won’t be the next Morgan Stanley or Qualcomm. It’s a bad bet. The only thing uncertain is the size of the boat and when it will sink.

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e-Discovery Teams: Self-Organization and Developmentof Evidence Preservation Protocols The preservation of discoverable electronically stored information (ESI) in litigation is a core activity of any e-discovery team. It is also a key component of risk management. Obviously, if you do not preserve electronically stored information, and it is deleted, then you will never be able to find it or collect it, much less review and produce it. Just ask the Bush White House about that; they failed to preserve over five million emails. The whole nine-step e-discovery process depends upon proper preservation. So too does risk management. Unless you are the White House, your failure to preserve after notice is a sure road to sanctions. Risk control in e-discovery begins with the routine employment of effective litigation hold procedures. This is the best way to minimize the chance of inadvertent or intentional destruction of relevant electronic records. This is a difficult task in the best of circumstances. Intel’s email preservation losses in the AMD antitrust case demonstrate that. Intel was trying to implement a very complex litigation hold procedure to preserve relevant evidence, but despite strong efforts by its team, it lost thousands of emails. The loss was caused by a number of mistakes, including design flaws in the notice and collection procedures, and the failure to suspend an automatic file deletion program for certain key witnesses. Spoliation was also caused by the simple human error of forgetting to look at a second tab of an Excel spreadsheet listing more key custodians. Even when no human errors are made and the system design is near perfect, spoliation can still occur for a variety of reasons. For one thing, even though a suit may already have been filed, you still may not be able to determine what ESI is relevant and should be preserved, and what isn’t. Under today’s liberal notice pleading rules in federal court, it can be difficult, some might say impossible, to know exactly what ESI should be preserved and who should be notified of the preservation obligation. Pleadings can be so vague that the scope of a litigation hold is frequently a guessing game, especially at the beginning of a case when the duty to preserve is triggered.

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The typical analysis to determine preservation scope is threefold: (1) what is the subject matter of the discoverable ESI that should be preserved; (2) who are the witnesses and custodians who may possess or control the discoverable ESI; and (3) what is the time frame of the discoverable ESI. In many lawsuits, it is not obvious from the pleadings what the dispute is really all about and what subjects could be relevant. In fact, most disputes usually morph a few times and develop new issues as the facts and law are better understood by the parties and the court. This kind of subject matter and issue determination must be performed right after a suit has been filed. At this point, the defense lawyers may know little or nothing about the case beyond what is stated in a complaint. Even worse, the preservation duty may be triggered even before a complaint has been filed, when it is reasonably certain that litigation is likely. At that point, it frequently requires a crystal ball to try to guess all of the issues in a case. It is often just as speculative and risk filled to try to determine who the witnesses may be in the case, and what additional employees or third parties may be custodians of discoverable information, even though not direct witness. Even the time component may be vague, and you may not be sure how far back in time you should go, or how far forward. You could say why not just call opposing counsel and find out, but that presupposes a knowledgeable and cooperative adversary. In reality, it rarely works that way. If and when they do return your call, which may be days or weeks later, and you are in fact given “advice,” it is often deliberately overly burdensome and oppressive, and you are sorry you asked. Gamesmanship is still very much alive and well in the adversary system. In view of the importance of proper preservation to facilitate justice and avoid sanctions, and the inherent difficulties of guesstimating scope of discoverability at the beginning of a case, the development of good preservation protocols is a prime directive of every e-discovery team. Internal corporate teams must try to set up systems that will mitigate against these inherent uncertainties and risks. But does this mean it is the first thing a new team should focus on? Should the team begin its work by developing final protocols in this area? Should the top priority be development of procedures for rapid response to litigation by preservation notices, suspension of automatic file deletion programs, and the like? No! The development of formal hold systems is important, but the first task of a team must be to self-organize. You have to have a team before you can play the game, much less win it. This means finding the right team players. It also means having them come together and attain a certain level of training and cohesion. Only then can they take on a play as complicated and important as litigation holds. The team must also secure adequate funding and senior management support for the team mission. It has to be a team of winners with a promising

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future, not a dead end. Only after these preliminary organizational steps have been taken can the team function effectively. Recruiting the right team members is more difficult than most people think. So too is securing upper management buy-in and budget approvals.

Team staffing requires careful selection of compatible people from three different sectors: law, IT, and management. The three-part nature of the ideal team is shown in the diagram to the left by IBM, with management referred to as “business.” IBM consultants, like almost everyone else in the field, advocate for internal e-discovery teams. The IBM white paper "The Impact of Electronically Stored Information on Corporate Legal and Compliance Management," advises companies to:

Have a plan and a process for discovery of ESI that you can improve over time. Understand your end-to-end process from discovery to production and the implementation of “holds.” This encompasses methods and practices that make sense for your organization, understanding where technology is needed to facilitate or improve process efficiencies or quality of results, and identifying which specific technology capabilities are required to make your end-to-end process effective. It is best accomplished through a cooperative effort among legal, IT, and the line of business (LOB) organizations (see above figure).

You can have a team with just lawyers and techs. The first e-discovery team by Cisco in 2001 started that way. But today, most agree you should also have a management/business component in the core team. They can come from one or more of several different departments, including records management, HR, Finance, Risk Management, Compliance or Operations. There are many different variations. It all depends on the particular organization, its structure and corporate culture. IBM explains that the line of business members are needed to assist legal and IT to “set and manage the business priorities; establish the policies and best practices; and, enforce the organizational compliance.”

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The culture of business, law and IT are very different. That is why careful selection of candidates from each sector is important. Not all in-house lawyers are cut out to work with computer techs. He or she may be a good lawyer, but computer-phobic. They went to law school precisely because they hated computers, math and science. The same applies to IT personnel. Many dislike lawyers, or are not comfortable with any kind of people activities. They would rather work on code for hours than attend a meeting. That is, after all, why most of them went into that field. Management types drafted into this project may have similar prejudices and see this as a dead-end assignment. They hear that it has something to do with records management, lawyers and IT, and their eyes glaze over. So, believe me, finding the right people for an e-discovery team is not easy. You should not simply pick the people who appear to have some time right now to work on this. Their aptitude and cultural readiness is more important. Most companies do not have interdepartmental teams, so there will be little precedent for this kind of cooperative endeavor, and high turnover at first is not uncommon. For all of these reasons, significant time has to be spent on education at the beginning of the group’s existence. That is why my involvement in a team is usually front loaded, and my time lessens as the team self-organizes and becomes fully functional. At the beginning, it is important to be sure everyone has a rudimentary understanding of the e-discovery process and the mission and future tasks of the team, including the need to design and implement good preservation protocols. These protocols and other projects will allow the team to better manage the high risks of litigation. They will also save the company boatloads of money, as I have previously blogged about, from reduced e-discovery costs. The first members of a team typically consider whether additional team members are needed. There should be at least two representatives from each of the three sectors, and frequently more than that, depending on the size of the organization, its history, and the complexity of the organization. A team needs enough members to accomplish its goals, but not so many as to become cumbersome and unworkable. If a team must have many members due to the complexity of the organization, then it usually breaks down into sub-groups. When that happens, the initial education, communication and cohesion process becomes much more challenging.

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After a team is fully formed and operational, and everyone is fully briefed and understands its missions and upcoming activities, one of its first tasks is to address litigation hold and collection procedures. Still, at this point, you are not yet ready to design final preservation and collection procedures. For most teams, that is still a year or so away. Instead, you create interim protocols. Some companies have some kind of identification, preservation and collection system in place, even if it is not in writing. Typically, it involves preserving computer files by telling employees to look through their computers for relevant files, and when found, save a copy onto a central location, usually a server. When there is already some kind of system like this in place, the team begins by studying the current procedures and looking for areas that need improvement. Usually existing systems fail to cover all ESI, fail to preserve metadata, fail to authenticate with hashing, and are otherwise of questionable legal validity. They are also usually not well documented, hard to follow, and fail to address many common contingencies. More often than not, there are no protocols at all. Lit-holds have only been dealt with on an ad hoc basis by a number of different people, each with their own ideas on how to go about it, and what the law requires. There you basically start from scratch. But whether you already have written procedures in place, or are designing them for the first time, in either case you are only going to be able to create interim preservation procedures. Final procedures come much later in the work of the e-discovery team. The procedures, even the interim procedures, must comply with the current laws. For instance, it is probably not legally sufficient to simply send employees an email telling them not to alter or destroy relevant files, and then hope for the best. Much more follow-up is required. Otherwise, if a mistake is made, and ESI is destroyed or altered, the company could face severe sanctions. See Cache La Poudre Feeds, LLC v. Land O’Lakes Farmland Feed, LLC, 2007 WL 684001 (D.Colo. March 2, 2007) and my prior blog on this case. For this reason, as a

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best practice, many companies are now moving to automated systems that supplement employee compliance. Also, as Zubulake V teaches, reasonable lit-hold procedures should include direct interviews with the key players in litigation. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y.2004). Also see the blog "Duties" page. The hold procedures, even the interim procedures, must also be designed to cover all potentially discoverable information maintained by the organization, even the .PST files that some pack-rat employees may have all over the place. Sometimes the preservation obligation may include back-up tapes, sometimes not. It depends on the computer systems and the particular case. Most of the time it will not be required. The hold and collection procedures must also be capable of preserving at least some of the ESI metadata. In some instances, it may not be acceptable to have employees copy files to a centralized repository, as that act in itself will change the file date metadata. As this work begins, the team will become painfully aware of a number of deficiencies in existing systems, including problems with permitted computer use policies, retention policies, and computer systems. There is usually a lack of information about exactly what information the organization has, and where it is all located. [It is, in effect, a lack of system metadata, data-about-data.] Most companies have only a vague idea of what they know, and who or what knows it. Few have complete, up-to-date knowledge of where all of their electronic information is stored. If you do not know what information you have, nor where it is all located, how can you possibly preserve it, much less produce it as required by law? This common deficiency must be addressed early on by the team. They must take a complete inventory of existing ESI and map it. Then they need to classify the ESI accessibility according to Rule 26(b)(2)(B). When the team looks, they always find that the organization has far more information stored in its systems than management realized, and that much of it is unneeded and should have been destroyed long ago. So then the team works on rehabilitating the organization’s overall electronic records management, and moves on to destruction of unneeded ESI according to Rule 37(f). The many deficiencies in existing systems, coupled with the stringent requirements of the law, end up forcing the team to design hold procedures that are difficult to follow, time consuming, expensive, and disruptive. That is because they must work with what they have, and what they know. Frequently it is chaotic. For instance, each employee may or may not have their own email archives, PST files. These files may be located on desktop PCs, laptops, thumb-drives, or CDs kept at home. Some employees may have multiple PST files, all of which now need to be searched and protected from alteration. Some may have none, but they may use their personal email accounts for work from time to time. The process of studying current practices and computer storage systems, and trying

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to design standard hold procedures that will preserve all discoverable ESI, will inevitably highlight the need to change existing systems so that better, more efficient, hold procedures can apply. The team will not want the stop-gap procedures to be permanent. They are, after all, the people who must follow these protocols and implement the lit-holds. Most teams will recommend adjusting future IT purchases to include preservation criteria, typically adding or improving archiving and indexing software. It may also mean purchasing new software specifically designed to implement and manage litigation holds. The process usually requires a radical overhaul of existing document retention policies and practices, and a tightening of permitted computer usage. After the new policies and systems are in place, the team can then design a final protocol for preservation and collection. It will be far better than the patchwork program first developed, and far less likely to fail and expose the company to sanctions as in the Intel case. It will also be far easier for the now matured team to operate, and to realize significant cost savings in the subsequent steps of ESI collection, analysis, review and production.

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What Game Does an e-Discovery Team Play? Hide the ball is certainly not the game for an e-discovery team to play. Some people think that is what discovery is all about, and in the world of paper discovery, years ago, there was some truth to that. But not today, and certainly not in electronic discovery. It may be tempting to some, but if you play hide the ball in e-discovery, and get caught, you may not only lose the case, but you may lose your job, and maybe even your license. It is never worth it, just ask Qualcomm’s lawyers. Instead, an e-discovery team plays a series of games that culminates in throwing the ball to the other side, not hiding it. Before you can get to the final throwing step of production of electronically stored information (ESI), there are a series of preliminary games to be played. Here is how I summarize the e-discovery team playbook:

• Find the Ball • Save the Ball • Pick up the Ball • Shrink the Ball • Clean the Ball • Aim the Ball • Throw the Ball

The first game of find the ball is called the identification step in the standard industry language of the Electronic Discovery Reference Model (EDRM). By looking at the standard EDRM model below you can quickly see how each game represents a basic step in the EDRM.

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Find the Ball Finding the ball is far easier said then done. For most companies, the problem derives from storing terabytes of data. Imagine a string of warehouses storing a billion basketballs, and you have to search through and find the one ball among them autographed by Michael Jordan. Unless the team is well established, you probably do not have an accurate, detailed, up-to-date map of all of the warehouses. You probably have only a vague idea where this one basketball might be located. It might be somewhere in a centralized bin, or in any one of dozens of other locations, including closets in employee homes, or off-site Internet storage lockers. It might even exist only in a shrunk down version, hiding in the pocket of one of a thousand employees; perhaps in their thumb-drive, or iPhone. Moreover, ever day a thousand basketballs are destroyed (hopefully not the one with Jordan’s autograph), and twelve hundred new ones are added. Yes, it is a very challenging game indeed. To make matters worse, you are never sure exactly what balls you are looking for, especially when the game first begins. You may have to guess, from a vague complaint, what balls are relevant. As I have written before, this is one of Anne Kershaw’s pet peeves, and rightfully so. Under federal notice pleading rules, very few details are required in a complaint to state a cause of action. So defense counsel is often left speculating what ESI will be discoverable and relevant in a new case. Still, you have to start making educated guesses to try to find the right batch of balls. From the large selection first identified, you will eventually throw a few to the other side. The way most teams do this is to analyze the dispute to try to determine what the issues will be in the case. This gives you a general idea of the types of balls that may come into play. Then you start to determine a general time line; hopefully the potentially relevant balls will be constrained by time. You may be able to know, with some certainty, that balls made before or after a certain time are not relevant and need not be searched. An e-discovery team will also try to limit the search to balls made or stored by certain "key players." These are the people in your company that are likely to be involved as witnesses in the lawsuit. The team’s search should be focused on the storage bins of these key players. Save the Ball After playing find the ball, the next game is save the ball. Here the team devises ways to preserve most of the balls identified as potential evidence in the last game. Again, this can be a very challenging game, especially when your company has many different auto-destruct routines in place (and most companies do). If you think it is easy to stop all of these programs, just ask Intel. They thought they had stopped deletion of excess email for all the key players in the anti-trust case against AMD, but in fact the janitor programs remained in place for the most important players, including the top officers of the company. Their email was deleted for years after the case was filed. They tried to play a

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very complicated game of save the ball, but failed. For a better idea of just how difficult this game can be, check out Intel’s report to the supervising district court judge on their failed attempts to preserve evidence. This mistake has supposedly already cost Intel millions of dollars to correct by forcing them to go to their backup tapes to find the deleted emails, and the meter is still running. AMD is, of course, claiming that the error was intentional. They would like the court to enter sanctions for spoliation and turn this mistake into an outright win of the whole case. So make no mistake about it, save the ball is one of the most important games an e-discovery team plays. As I have discussed before, that is why most e-discovery teams focus on this game as soon as the team is formed, and look for ways to improve their company’s litigation hold procedures. Pick Up the Ball Again, this game sounds easy enough, you just collect the relevant ESI from the data you have identified and preserved. Seems easy, but it is not. There are tricks and traps here aplenty. If you are not careful, you could collect too much or too little. Generally you do not want to simply pick up all of the balls you have saved. That will make the next games too expensive. You want to screen out the ones that are unlikely to be needed, and probably are not relevant at all, but were preserved just in case. You want to preserve more broadly than collect because you never want to play save the ball twice in the same case. Not only is that kind of do-over expensive, but it may be futile because, in the meantime, routine processes may have deleted many balls not saved in the first pass. You also do not want to pick up too few balls, and leave behind many that are directly relevant and should later be thrown to the other side. That kind of careless collection can also be expensive. It can force you into an expensive do-over, and open you to charges of hiding the ball. See Eg. Court Disapproves Defendant’s “Hide the Ball” Discovery Gamesmanship. Careless collection often occurs if the team simply delegates this function to the key witnesses, and does not properly supervise or follow-up on their ball-picking efforts. The same comment holds true to the two prior games of ball identification and preservation. The team cannot over-delegate its responsibility to key players and then just hope for the best. These are their games, and the team must take responsibility to see they are played correctly. That is the whole purpose of an e-discovery team. For that reason, in most cases it will not suffice to simply send out a preservation letter to the key players which describes the dispute, and then leaves it to them to find the relevant balls for themselves, save them, and pick them up. Without help and supervision from the team, the key players may not know which of their computer files are relevant, they may not know how to properly preserve this ESI, nor how to collect it. They are sure to make mistakes. Thus, when the key

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players in a company are called upon to take part in the games, which in itself makes a lot of sense, since they should know their own information better than anyone else, they should be given expert help and advice from the e-discovery team. In other words, it is perfectly all right for the team to delegate some of this work to the key players in the litigation, but the team must still supervise and follow-up. Ultimately the team should be responsible, since they are trained and more experienced in collection than the key players. The team should have personal meetings with the key players and closely monitor their activities. In many cases, the team should also implement certain safeguarding mechanisms to supplement the key players’ efforts, such as automated copying and keyword searches. Another common mistake made in pick up the ball is to carelessly change the ball in the very process of picking it up. You could, for instance, change the metadata of a file, such as information as to when it was last viewed, saved, or revised. This is an especially high risk when the team attempts to rely upon key players to pick up the ball for them. Although this probably will not matter in most cases, in some cases, such as stock backdating cases, this might be very important. As a general rule, the team tries not to change the ball too much by the act of picking it up. The team may later strip a file of all or part of its metadata on purpose, if that facilitates later cleaning or throwing, especially if the metadata is not important in the case, or not wanted, but they never want to do it accidentally. A final common mistake, one of my pet peeves, is to neglect to hash the ball when you collect it, and properly preserve and tie the hash into each ball thereafter. I have described the process of using hash mathematics to authenticate ESI at length in my law review article, HASH: The New Bates Stamp, 12 Journal of Technology Law & Policy 1 (June 2007). I also provide an overview of the subject in this blog. The team may already have hashed files as part of the preservation game; but if not, it is essential that they now be hashed at the collection stage. Hashing provides a unique identifying alphanumeric value for each computer file collected. This hash value can be later checked to prove that the file has not been altered since it was collected. This is a key step in ESI authentication to allow for admission into evidence at a hearing or trial. In most cases, hashing should be a normal part of ball pickup. Shrink the Ball Shrink the ball is the game where the team can save the company a lot of money. Thus, from a financial perspective, it is the most important game of all. In this culling step, you process the ESI to eliminate as much

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duplicate and irrelevant information as possible. Here good software and automated process are critical; so too is careful strategic thinking, The goal is to significantly reduce the amount of ESI that must be reviewed and cleaned in the next steps. Thus, for instance, at the end of the last game you may have identified and preserved 1,000 gigabytes (1 terabyte) of ESI, and collected 500 gigabytes. To give you some idea of the amount of information we are speaking about, in some circumstances the 500 gigabytes may be equivalent to 500 truckloads of paper. It would cost a small fortune for teams of lawyers to read that much paper. We are talking about years of billable lawyer time to read that much data. It would also be a colossal waste of time because they would end up reading the same document dozens, if not hundreds of times. So it is critical to aggressively eliminate the redundant and immaterial ESI in this processing stage. In many cases the 500 gigs can be cut down to 100 or 50 gigs, resulting in tremendous savings in the expensive review games to come. Clean the Ball Here is where the big bucks come in, the cost to review the data for privileged, confidential, and irrelevant material. Still, most internal corporate e-discovery teams will not clean their own ball, they will hand it off to their caddy to do it for them, typically their outside legal counsel. A few of the more mature and well organized teams have started to review their own data, and clean the ESI themselves. They have teams of contract attorneys they employ to do this work at reduced rates, some even send the data to lawyers in India for review. But for most teams, this is advanced play that they do not have the time or skill to attempt. This is a very important and risky step in the EDRM process and companies want to be sure it is done right. You review the truckloads of email and documents that have not already been culled out in the prior games so that you can remove the files that do not have to be produced. The last thing you want to do is produce privileged materials to your adversary. You need to clean your production of these secret files and produce a log of them instead. Even with a clawback agreement, an accidental disclosure can still result in waiver of your privilege to third parties. You also want to be sure the ESI review catches all confidential materials, and that they are produced with appropriate markings and confidentiality agreements. Trade secrets can be lost forever if they become a public record by filing with a court. Aim the Ball Now we come to the lawyerly game of aim the ball where the ESI is analyzed to see how it fits into the case at hand. Here lawyers and paralegals tag each file to an issue, typically using review software. They also make final decisions as to whether and how information is responsive to discovery requests, or otherwise

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must be produced (or not). The files are categorized and rated for importance. Is this email a smoking gun that could kill your case, or is it merely of marginal relevance to a secondary issue? You hbetter find this out, and fast, as to eachcomputer file you are about to disclose to the other side. If your analysis of the information to be produced shows you have a strong case, you will approcase far differently than if your analysis shows you will surely lose when all of thecards are put on the table.

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Obviously this analysis stage requires the sure hand and steady aim of trusted outside counsel assigned to defend or prosecute the case. Still, the legal members of the team should assist and be involved in the analysis and evaluation of the merits of the case. This game concludes with final decisions by legal counsel on what should be produced and what should be withheld. These decisions must be rational and made in good faith. If analysis shows you have a losing hand, you had better fold early before the other side realizes your position. You cannot do like Qualcomm and decide to withhold evidence just because you don’t like it. You can see where hiding the ball got them - they lost the patent they sued to enforce, they paid over eight million dollars in fees to the other side, their general counsel resigned in disgrace, and their outside counsel are now fighting to retain their licenses. When you are a plaintiff and find yourself in this position, you do not file the suit to begin with or, if you discover it in midstream, you should dismiss and cut your losses. The same applies when you are in a defense position. It is not an option to try and hide the evidence that will hurt your defense. You must instead try and make the most of it and settle as best as you can. That is how the American system of justice works and all teams have to play by these same fundamental rules. Voluntary disclosure may not be the rule in the rest of the world, especially the civil law countries in Europe, but that is how the game is played here. If you are defending or prosecuting a case in the U.S., you are going to have to reveal your data to your adversary, even if that kills your case. Throw the Ball The last game is the culmination of all the rest. The analysis game resulted in final decisions on what files to be produced. Now you actually make the production. Throwing the ball is not really all that hard, so long as you enlist the aid of WORMs. No, not the creepy ckind, but the “write once, read many” times kind, such

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as optical discs, CDs or DVDs. The ESI on these media cannot be altered after written onto the discs, thus providing you, and the receiving party, with a certainamount of protection that the files will not be accidentally altered. Worms help theparties maintain a permanent record of the ESI produced.

Another tricky aspect of production is deciding the form of production. Do you produce in native format with full internal metadata retained, or do you produce in a TIFF or JPEG format with a load file ready for import into review software? This should have already been worked out with opposing counsel as part of the Rule 26(f) conference, or the original production request; but if not, you have to make these decisions now. Take the time to clearly mark and label the production media. One thing I hate is a CD production with no writing on it, or just indecipherable handwriting. Write out a full description of the CD and the date of production and name of the case. Think of chain of custody issues and do not forget to make multiple copies. Another thing I have noticed lately is the use of paper labels on CDs. That’s ok, but beware of labels that peel off. As a safeguard, it is better to use ink jet printers that print directly on the CD, instead of glue on labels. If you must use adhesive labels, put some kind of writing directly on the CD itself, just in case it peels off somewhere down the line. Finally, if you use TIFF or other image type files where you affix Bates stamp type markings to identify individual ESI files, please consider adding a truncated hash value to the file ID. As discussed in HASH: The New Bates Stamp, this will facilitate both identification and authentication, and allow for easier comparison with the native originals. Concluding Thoughts These games are difficult. Much like golf, it is not a game of perfect. Mistakes are inevitable. Even Tiger Woods messes up from time to time, and does not win them all, so why should you be any different? Document your efforts, play it safe, and use redundant systems whenever economically feasible. Thus, when a mistake is later discovered, you may be able to cover it with a backup system. Or, if that is not possible, you can at least show to the supervising judge that you made good faith, reasonable efforts. The judge should understand and cut you a break, maybe even give you a mulligan. If the judge does not realize that mistakes are inevitable, he or she simply does not understand the game. Then it is up to you to explain it to them, or hire an expert who can.

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e-Discovery Teams Can Meet the Challenges of the “Zubulake Duty” and Control Excessive Costs United States District Court Judge Shira A. Scheindlin, one of the leading jurists in the field of electronic discovery, is credited with first establishing what has become known as the Zubulake duty. Judge Scheindlin (shown right) contends that all attorneys who litigate have an affirmative duty to understand their clients' computer systems sufficiently to know where all of the potential electronic evidence is stored. Judge Scheindlin even specifies how she eoutside counsel to fulfill that duty. She requires them to speak directly with the key players inlawsuit about their computer files and other electronic documents. She also requires them tspeak directly with their clients' IT personneabout their data retention architecture, policies, and practices. This duty presents a challenge of epic proportions to most attorneys litigating cases today.

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Judge Scheindlin stated this principle in the most famous e-discovery case of all, Zubulake v. UBS, 229 F.R.D. 422 (S.D.N.Y. 2004) (Zubulake V). Here are Judge Scheindlin's actual words on the subject in Zubulake V:

Counsel must become fully familiar with her client's document retention policies, as well as the client's data retention architecture. This will invariably involve speaking with information technology personnel, who can explain system-wide backup procedures in the actual (as opposed to theoretical) implementation of the firm's recycling policy. It will also involve communicating with the "key players" in the litigation, in order to understand how they stored information.

Zubulake Duty Started in New Jersey We refer to this obligation as the "Zubulake duty" because it first became widely known in this decision. See: E-Discovery: Current Trends and Cases (ABA 2008) at pgs. 55-65. Also see: E-Discovery Team Blog - Duties Page. But the truth is, it could probably also be called the "New Jersey duty" because it was required by local rule in New Jersey district courts even before Judge Scheindlin's Zubulake opinions. L.Civ.R. 26.1(d) of the Local Rules of the U.S. District Court, District of New Jersey. The New Jersey local rules states:

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Prior to a Fed.R.Civ.P. 26(f) conference, counsel shall review with the client the client's information management systems including computer-based and other digital systems, in order to understand how information is stored and how it can be retrieved ... including currently maintained computer files as well as historical, archival, backup and legacy computer files.

The New Jersey rule also requires counsel to locate an "IT witness":

Counsel shall also identify a person or persons with knowledge about the client's information management systems, including computer-based and other digital systems, with the ability to facilitate, through counsel, reasonably anticipated discovery.

The federal courts in the rest of the country have uniformly followed the lead of New Jersey and Judge Scheindlin on these requirements. In most district courts today, and a growing number of state courts, attorneys are not permitted to just rely on the assurances of senior management and in-house counsel concerning e-discovery compliance. They are supposed to personally verify that all discoverable electronic information has been identified, preserved, gathered, and produced. The district court judges and magistrates today demand that the attorneys who appear before them have enough technical competence, somewhere on their litigation team, to know where the electronic evidence is located and how to preserve, collect, and present it in court in a forensically sound manner. Attorneys, especially outside counsel of record, are required to understand their client's computer architecture, policies, and actual practices, both company-wide and user-by-user. Ignorance of the technology is no defense. Martin v. Northwestern Mutual Life Insurance Company, 2006 WL 148991 (M.D Fla. Jan. 19, 2006). (Magistrate rejected the attorney's excuse of "computer illiteracy" as "frankly ludicrous.") This is a huge challenge for most attorneys; but especially for experienced litigation attorneys who have been trained in the "paper chase," and typically have little, if any, specialized computer skills. Trial Lawyers Unprepared to Fulfill the Zubulake Duty Most trial lawyers lack the necessary skills and knowledge to fulfill the Zubulake duty. They do not have a clue what data retention architecture even means, much less how to speak the "heavy geek" needed to talk to their client's IT department. As a result, in today's world one of three things generally happens:

1. Trial lawyers ignore the Zubulake duty, putting themselves or their clients at risk when e-discovery problems develop, and it is revealed that they have not done their job. See Eg.: Phoenix Four, Inc. v. Strategic

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Resources Corp., No. 05-CIV-4837, 2006 WL 1409413; 2006 U.S. Dist. LEXIS 32211 (S.D.N.Y. May 22, 2006) (Defendant and its lawyers each sanctioned and ordered to pay $22,581 a piece for breaching the Zubulake duty and failing to find "hidden server partitions" containing crucial evidence, a failure which the judge described as "gross negligence," but which I contend, most trial lawyers do not even begin to understand); Louis Vuitton Malletier v. Dooney & Bourke, Inc., 2006 U.S. Dist. LEXIS 87096 (S.D.N.Y. Nov. 30, 2006) (Attorneys depend on the client's IT personnel to collect evidence from a database, and they do not supervise nor understand; the corporate IT staff is untrained in e-discovery and they mess it up, fail to produce relevant email, and the result is sanctions).

2. They go through the motions of trying to fulfill that duty, and do a poor job,

usually by assigning the tasks to the youngest associates in the blind hope that kids who grew up with computers might innately know how to do this (they don't). When e-discovery problems develop, and they often do, the results are only slightly better than when the duty is ignored altogether. Diabetes Centers of America, Inc. v. Healthpia America, Inc., 2008 U.S. Dist. LEXIS 8362, 2008 WL 336382 (S.D. Tex. Feb. 5, 2008) ("Plaintiff’s counsel conceded at the hearing that the task of searching plaintiff’s records for relevant emails in response to defendants’ discovery request was entrusted to a junior associate. It is apparent that the associate worked with little or no direction or supervision. The search terms used by the associate were inadequate — they did not even include the term “phone” — and, as a result, she failed to locate or perceive the significance of the emails about which defendants now complain."); Danis v. USN Communications, Inc., 2000 WL 1694325 (N.D. Ill. 2000) ($10,000 fine imposed against CEO personally when the young general counsel he hired to supervise ESI preservation was grossly negligent).

3. They delegate the duty to others who claim expertise in this area and

hope for the best. Typically this means they either bring in specialized co-counsel to handle the e-discovery aspects of a case (although very few such attorneys exist today, and so this "gold-standard" option is now limited), or they hire consultants or e-discovery vendors to help them with the technical facts, and sometimes also the strategies, and try to handle the legal issues themselves (since by law consultants and vendors are not permitted to provide legal advice).

Recipe for Crushing e-Discovery Expenses Today, the situation of marginal competence and over-delegation leads to two things. First, an unnecessarily adversarial approach to e-discovery; and second, excessive vendor input and control over the amount of Electronically Stored

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Information (ESI) that needs to be reviewed in any one case. These two factors, in turn, significantly increase the costs of e-discovery to the point that the costs are turning parties away from the courts. Defendants are forced into extortion type settlements and plaintiffs are forced into ADR (alternate dispute resolution) systems, such as arbitration, where all discovery is prohibited or severely limited. Marginal Competence Works Against New Cooperation Paradigm When a trial lawyer does not fulfill the duty, or just delegates it without real understanding of the processes involved in the overall e-discovery work, in other words, all nine steps of the standard electronic discovery reference model (EDRM) he or she will not understand that the "business as usual" adversarial model is counter-productive in e-discovery. They will focus only on American Bar Association's Model Rule of Professional Conduct 1.3 on diligence, and ignore Rules 3.2, 3.3, and 3.4 on expediting litigation, candor, and fairness. (I recently discussed this at length in my blog article "Lawyers Behaving Badly.") They will not appreciate or understand how cooperation and transparency can significantly reduce e-discovery costs and are thus in their clients' best interest. This is something that the Sedona Conference is now focusing on. I recommend that readers look further into their important new work in this area: The Sedona Conference® Cooperation Proclamation which I have discussed before in my blog article Hospital Defendants Martyred in the Cause of Cooperative e-Discovery. Over-delegation to Vendors Drives Up the Costs Another factor impacting e-discovery costs is the natural tendency of e-discovery vendors to increase the amount of ESI collected and processed for review in a case. When inexperienced trial attorneys hire vendors to help them, they typically buy these services as uninformed, or at least under-informed consumers. They do not know the right questions to ask, much less strategies, to minimize data review. They are easy to doubletalk and dazzle with technical lingo. Often, they fall for hype and over-promises. Typically this leads to dissatisfaction at the end of a project and so the trial lawyers chooses a different vendor for the next project. Also, they tend to blame the vendor for any mistakes that happen in the e-discovery process. This explains why law firms usually do not work together

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with the same vendor on multiple projects as part of a team. Most trial lawyers today do not understand the technical processes involved in e-discovery, nor even the specialized law of e-discovery. As a result, they are easily convinced to err on the side of over-collection and review of too many computer files. This poor strategy is also profitable for law firms, so you do not see much push-back. After all, this over-review generates very profitable work for teams of law firm associates or contract lawyers. No one complains, except for the clients who pay the bills. The trial lawyers then blame the judges and the new rules, saying they, not them, are to blame for the excessive costs. This is a common practice that is totally inappropriate. I have written about this before in "Trial Lawyers Turn a Blind Eye to the True Cause of the e-Discovery Morass." The truth is, the bills are too high because the lawyers are untrained and working without the proper support of IT. This uninformed-consumer, over-collection, excessive review model prevalent today suits the typical vendor's pricing model. They typically charge on a per gigabyte basis. For that reason, some vendors encourage this kind of overuse of their services, or at least, they do not direct uninformed consumers to a more reasonable model. After all, they sometimes convincingly argue, it is safer to review too much than to risk sanctions for missing key evidence. Also, the vendors would have to stray too far into the area of legal advice and legal strategies to forcibly redirect the trial lawyers. They are not permitted to do that. This provides them with a perfect cover to stand back and get paid for the over-conservative, over-collection of ESI. Some vendors even exploit the fears, inexperience, and lack of knowledge of their customers to fulfill their duties to their shareholders to maximize profits. To date, e-discovery vendors have no code of ethics, and, unlike lawyers, they are not subject to professional regulation or oversight. It should be pointed out, however, that the EDRM group is working on developing a voluntary code of ethics, and, of course, most vendors are honorable people. Call For a Change to Avoid Crushing Expenses The situation described has to change. We can no longer afford to continue with the same paradigm. We must begin to envision and implement a different model. Analysis of the problem suggests the answer. The only viable solution is the team approach where technology savvy lawyers, e-discovery technicians, trial lawyers, clients, records managers, and vendors all work together to fulfill the Zubulake duty. This is an interdisciplinary model where the technical fields of law, information technology, and information management each contribute. At a minimum, a person from each of these three fields must be included on a good e-discovery team. Then, they must all be taught a base level of competence in the other two fields. Finally, all three have to be taught the specific issues of law and

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technology that are unique to e-discovery. I will elaborate on the team solution later in this article, but first I will address two "beg the question" type "avoidance-solutions" to the problem. The Duty Will Not Just Go Away and Should Not Be Shifted to the Parties The first avoidance type solution to this fundamental problem is to simply get rid of the duty altogether. Under this argument, New Jersey, Judge Scheindlin and the dozens, if not hundreds, of judges who have adopted this doctrine are simply wrong and appeals courts should reject the tenet. They argue that it is unfair to impose such duties on attorneys. The parties who own the data should be solely responsible. That argument is not likely to be accepted by the courts because discovery has traditionally been the joint responsibility of the parties and their lawyers. In fact, some e-discovery issues have always been the sole responsibility of attorneys as officers of the court, for example legal objections to discovery. That is the reason many types of discovery responses must be signed by the attorney. That is also why it is well established that both litigants and their attorneys can be sanctioned for the failure to supervise discovery. Metro. Opera Ass'n Inc. v. Local 100, Hotel Employees and Restaurant Employees Int'l Union, 212 F.R.D. 178, 218-219 (S.D.N.Y. 2003). This is based upon the practical reality that "discovery is run largely by attorneys, and the court and the judicial process depend upon honesty and fair dealing among attorneys." In re September 11th Liability Insurance Coverage Cases, 2007 WL 1739666 (S.D.N.Y. June 18, 2007). To date, no judge (to my knowledge) has rejected the imposition of the Zubulake duty upon the counsel of record, nor listened favorably to an argument by an attorney that he or she just assumed that their client did the right thing without asking, much less counseling them about it. The logic behind the duty is too compelling. It makes sense for lawyers to be responsible to search out and find the evidence. That is, after all, the job of trial lawyers, not the parties, unless they are unrepresented. It makes sense to have a party's lawyer take reasonable steps to try and prevent their client's destruction of evidence. On the other hand, I will concede that there are situations where a lawyer has made reasonable efforts, and has thereby fulfilled the Zubulake duty, but the client was untruthful or grossly negligent. In these circumstances, when ESI is lost or withheld, the client alone should be sanctioned. Lawyers are not insurers of their clients' actions, nor should they be. Parties to litigation must be responsible to meet the Zubulake duties too. It is their data and their lawsuit. Another slightly different argument is to accept the duty of lawyers to make reasonable efforts to satisfy Zubulake duties, but try to handoff the duties from outside counsel to in-house counsel. This is an attempt to shift the duty from the

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officers of the court, the trial lawyers who appear of record to represent parties in litigation, to in-house lawyers. Of course, this argument only applies when the parties are big enough to have their own law departments. But when they do, some argue that the duty should not still be imposed on outside counsel. One such commentator is Thomas Y. Allman, who was himself an in-house attorney for many years. He thinks that outside counsel should be able to rely upon the representations of their clients that e-discovery has been handled properly. He contends it should be sufficient for in-house counsel to speak to the IT personnel, and relay pertinent points to outside counsel. Many in-house counsel agree with Tom on this point, and certainly it has merit and can reduce costs. But in my view, this proposed modification to the Zubulake duty is unlikely to be accepted by the courts. Judges want the attorney with these important evidence preservation and collection responsibilities to appear before them; in other words, to be a counsel of record in a case. By doing so, they subject themselves to the ethical obligations and duties of an officer of the court, not to mention personal jurisdiction of the court to sanction them for misconduct, including violation of the Zubulake duty. In-house counsel do not appear of record in cases and so they do not assume the same ethical duties and responsibilities. Also, the court lacks personal jurisdiction over in-house counsel. They only have jurisdiction over the company. This means the judge can only sanction the corporation, not the in-house counsel personally. Tom has written a short article on this subject, arguing that outside counsel should be excused of these duties and instead be allowed to rely on their clients' in-house counsel do it for them. The article was recently published in Law Technology News, "Pandora's Box: Compliance Quagmires Can Alienate Legal Teams," 15 Law Technology News No. 8 at pg. 26 (August 8, 2008). Here is an excerpt from Tom's interesting article:

The implication -- when applied literally to clients with significant in-house e-discovery capability -- is that retained counsel may not rely upon the reasonable assurances by a client about discovery compliance. However, entities that can afford to do so are increasingly responding to electronic data discovery demands by designating in-house teams to be responsible for accomplishing the task of EDD management in a cost-effective and compliant manner. ... The quest for a single best practices rule, focusing on a duty to supervise by retained counsel, is understandable, but misplaced.

Aside from the anticipated opposition to this proposal from the judiciary, I think the timing of this proposed shift is all-wrong. It goes against the grain of recent

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experience in e-discovery where parties to litigation have often shown a need for independent outside counsel to act as a guardian of proper conduct. Many people, even large corporations, can get caught up in the turbulence of litigation. One of the important roles of outside counsel is to serve as a kind of ethical gatekeeper and restrain the impulses of some clients to win a case at all costs, even if it means bending the law, or even lying to opposing counsel or the court. The Qualcomm v. Broadcom case, which is still in progress in San Diego federal court, shows the importance of ethical outside counsel. It shows how bad it can get when outside counsel do not fulfill the Zubulake duties and instead rely on in-house counsel to do it. Qualcomm, Inc. v. Broadcom Corp., 2008 WL 66932 (S.D. Cal. Jan. 7, 2008); Qualcomm Inc. v. Broadcom Corp, No. 05-CV-1958-B(BLM) Doc. 593 (S.D. Cal. Aug. 6, 2007) (two of several relevant orders entered in this case). Qualcomm is an unfortunate situation where outside counsel's over-reliance on in-house counsel led to unethical behavior and outright fraud-on-the-court. Although Tom Allman's position may someday prevail, to date there is no court decision criticizing Judge Scheindlin's ruling, nor even an order allowing the handoff of the duty to in-house counsel. In view of the chilling lessons of Qualcomm, none are likely soon - no handoffs, no passes, no punts. For the time being, the placement of the Zubulake duty remains squarely on the shoulders of outside counsel, and then secondarily upon the litigants themselves. The Team Solution to the Zubulake Duty The days of a lone trial lawyer preparing for trial by himself, with perhaps a few trusty associates to assist, are over for all but small cases. That was the nineteenth century model followed by Abraham Lincoln and his associate, William Herndon. It worked well enough through most of the twentieth century too, although the numbers of lawyers involved in bigger cases began to increase steadily in the second half of the last century, as did the addition of private investigators to the lawyer team a la the Perry Mason model. But this limited team started to become inadequate in the 1990s when clients started

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to switch to computers for creating and storing documents and other evidence. By now, in late 2008, the old solo trial lawyer or one-dimensional small team model is obsolete in most cases of any significant size. The only viable model to meet the Zubulake duty is through larger scale teams that incorporate computer and other technical specialists as key members of the team. I call this new paradigm the "CSI" type team, after the popular television program, where technical specialists encompassing a wide variety of disciplines are used for forensic investigation to solve crimes. The trial lawyer today needs to be a part of a larger team, a key part to be sure, but not a one-man team as in Lincoln's day. Trial lawyers need to retain and rely upon lawyers specializing in e-discovery, their own computer science specialists (i.e. - law firm techs), their own favored e-discovery vendors and consultants, and ideally their client's own multidisciplinary litigation readiness team. This CSI/ESI-type team model frees trial counsel to do what they do best -- try cases, and not mess around with computers. Also, and somewhat unexpectedly, the larger multidimensional team reduces the total cost of litigation by maximizing efficiencies and driving down e-discovery expenses. Although there are more individual professionals billing time on a case, they require less time overall to do the work. They are specialists in niche areas and can do the work much more quickly and effectively. Most importantly, the team is an informed consumer of e-discovery services and as such is well positioned to control costs. Although there is some territorial type of resistance by the trial bar to this proposal, once they try it (or it is forced upon them by the client), they see how well it can work and are pleased. It alleviates them of the burden to try to learn IT systems, and pretend like they know what they are doing in this new area of the law. The truth is, the IT systems of most large companies are so complicated, that only an attorney who specializes in this area of law can do it properly, and even then they need the support and contributions of other non-lawyer team members who are specialists in various technologies. This is a highly arcane area, and lawyer dabblers, as well as IT dabblers, often get themselves (and

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their clients) into deep trouble before they even realize what happened. The curing of mistakes is a very expensive process, not to mention a way to lose an otherwise winning case. The e-discovery teams in law firms, and in companies often subject to litigation, can act together to efficiently meet the Zubulake duties and thus significantly reduce the costs and risks of e-discovery. The efficiency is maximized for larger companies when they have their own internal e-discovery team that works with the team of their outside counsel. When there is an internal corporate team in place, outside counsel can then more efficiently discharge their duties, and focus on their specialty skills of supervision and communication to the court and opposing counsel. The efficiencies are further maximized when corporate counsel uses national or regional discovery counsel to coordinate the activities of local counsel and appear where necessary to discharge the Zubulake duties. Specialty discovery counsel become familiar over multiple cases with their clients' ESI storage architecture, employee practices, and the data itself. The learning curve for any one case becomes far less. The same holds true with the corporate utilization of national or regional e-discovery vendors. Just like specialty legal counsel, the vendors can act more efficiently in any particular case when they already know the client's systems and practices from multiple past cases. Where possible, the outside specialty legal counsel and select vendors can also serve directly on the corporate readiness and response teams. This dual role improves knowledge and communication, and thus maximizes cost reduction and risk management. Although this is ideal, in truth, very few vendors and even fewer attorneys are qualified to serve on both teams in an effective and impartial manner. That takes not only extensive knowledge and experience in both law and technology, but also maturity and leadership skills to operate effectively in the two types of teams, both law firm and corporate. Long Term Impact of the Team Approach The multi-specialty team approach to e-discovery, an approach which includes vendors and their products where needed, will, in time, overcome the situation prevalent today of marginal competence and over-delegation to vendors and consultants. As the law firm teams and corporate teams train and become skilled players, they will come to understand that the only way to win this game is through the Sedona approach of cooperative and transparent e-discovery. Experience shows that this move from an unnecessarily adversarial approach to e-discovery will, in itself, lead to significant cost reductions. The second factor driving excessive e-discovery costs, which is seldom spoken about but well known to industry insiders, is the unsophisticated e-discovery buyer. The naive lawyer or naive corporation purchaser of e-discovery vendor

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services often not only pays too much, but also usually over delegates to vendors. Without an expert team, it is typical for parties in litigation and their attorneys to rely too much on vendor input and control as to the amount of ESI that needs to be reviewed and produced. The new teams will not only know how to control that, but when vendors are a part of the team, and better assured of longer lasting relationships, they will be less likely to fall for this temptation. Over time, different types of e-discovery vendors are likely to participate on e-discovery teams. At first, especially when larger projects and cases are involved, the full service type A-Z vendors will predominate. As the teams mature and begin to take more of the functions of e-discovery in-house, they will rely less and less on service vendors to do the work for them. They will not only handle the preparation and enforcement of litigation holds, which is the first and most basic function of any e-discovery team, but also move on to collection and processing the ESI themselves. Some internal corporate teams will mature to the point where they even conduct their own ESI review. This requires a lot of time, experience, and commitment. They will then transmit the culled data set to the outside counsel members of their team for final analysis and preparation of privilege logs and productions. Of course, since outside counsel is still responsible for supervision of discovery, including signing discovery responses, and the Zubulake duty, this must be done with their close supervision and fully integrated teams. As the teams mature, they will, I predict, redirect their vendor purchases from e-discovery service companies, who typically charge on a project by project per gigabyte basis, to e-discovery software companies. The software companies license a product that can be used by the team, typically without limits or regard to the number of gigabytes or terabytes of data involved. All educated teams know that the highest costs in e-discovery are from review. They also know that the best ways to control these costs are by: (1) reducing the amount of ESI to be reviewed, which is done by aggressive culling and advanced search techniques; and, (2) faster and better review tools. This means that products that search and process ESI so as to reduce volume, coupled with products that speed up the actual review process itself, will be in high demand by tomorrow's review teams. It seems to me that the winners in the vendor circle of tomorrow will be the companies that provide software and other tools to empower e-discovery teams to play the game better. Aside from the processing and review types of software mentioned above, other types of software that will be in high demand for teams are litigation hold and collection type software. These are the tools that e-discovery teams need and want.

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There will still be a place for A-Z service providers, especially for big cases where a team does not feel up to it because of the complexity and risks. Also, non-team players, lone trial lawyers, and novices will still need their care and assistance in every case. But the trend is clear. The direction for both law firms and corporations is towards self-sufficient, well-trained, interdisciplinary teams. It is a good move. When done properly, with the role of counsel of record preserved, the teams will not only satisfy Judge Scheindlin's Zubulake duty, but also realize significant cost savings.

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Practice Under the New Rules: an e-Discovery CLE by BNA I attended a BNA/Kroll event in Orlando recently called: “Practice Under the New E-Discovery Amendments: the battleground of conflict; the promise of resolution.” Basically, the CLE tried to define the impact of the new rules on business and litigation in America, and in the process provided many excellent, advanced practice tips. The speakers included Judge Hughes, whose "Top Ten Tips" I featured in another essay; another magistrate in N. J. District Court, Judge Ronald Hedges; Magistrate Judge David Waxse of Kansas City who decided Sprint v. United; Judge James Rosenbaum, a District CJudge John Carroll, a former magistrate in District Court in Alabama, now a law professor at Cumberland. These are among the preeminent e-discovery specialists on the federal bench, who have been studying and speaking ondiscovery issues for years. Their view from the bench was very enlightening

ourt Judge in Minnesota; and

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Stwo in-house counsel, Jonathan Eisenberg of Merrill Lynch and James Wright ofHalliburton. Actually, Jim is not an attorney, he is a project manager who serves as the leader of Halliburton’s e-discovery team. Under his guidance, Halliburton has established one of the most advanced e-discovery teams in the country. Jim provided a wealth of practical insights on the team procprocedures, noting among other things that the biggest cost in e-discovery is attorney review of documents. That, in his experience, ranges in cost from $5to $10.00 per file. For that reason he manages the initial filtration of documents very aggressively to try to cull down the number of files toreviewed. He noted that outside counsel may not be as motivated to do ssince they are the ones performing and billing for these services. Jim mentiosome new software tools and strategies to help keep the numbers down, including “clustering” search technologies, enhanced janitor software built the document creation, and early agreements with opposing counsel on restricted date ranges, searches and file type exclusions. Ufield, providing a sharp contrast to their competitors such as UBS Warburg andMorgan Stanley. Jon’s promotion and development of an internal e-discovery team arose out of his observation that in-house counsel without expertise in thiarea were rendered ineffective in modern securities cases. Now, under his leadership, Merrill Lynch carries out what he described as an eight step proc1) litigation hold procedures; 2) custom search software; 3) filtration before export

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to vendors; 4) document destruction policy; 5) dedicated in-house electronic discovery team; 6) Encase type software tools to search for non-email ESI; 7)pool of reliable contract lawyers to review pre-productions; 8) in-house forensicexperts.

onathan then went on to provide detail on the litigation hold procedures his team

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inally, he mentioned a software program that both Merrill Lynch and

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Jhas developed. This is a seven-step process: 1) ID the custodians; 2) map the data sources; 3) send written notices and reminders; 4) monitor and enforce compliance; 5) interview key players; 6) collect information; 7) export data forproduction to outside counsel. On the key mapping step, he noted that it takesmany months to do properly, and is impossible if you wait do this in response to case. Like every other speaker at the CLE, he emphasized that it is impossible to do e-discovery perfectly, that you should expect mistakes, and document a good faith effort. FHalliburton use to automate the litigation hold process: Atlas LCC by PSS Systems. It is tied into the HR databases, and notifies and implements diretransfers of data by custodians. It also keeps a record of the whole process anso facilitates documentation of efforts and up to the minute status reports.

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The Sedona Conference Releases Two New Must-Read Commentaries on “Email Management” and “Legal Holds” The Sedona Conference has done it again and group-written two more excellent guides: one on legal holds, and the other on email management. Both were just released for public comment and may be downloaded from the Sedona website for personal use. The Sedona Conference Commentary on Legal Holds: The Trigger & The Process (AugusPublic Comment Version) provides much-needed guidance on an issue very troublesome to most large organizations: when and how to preserve ESI for purposes of litigation. I

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those issues, is divided into two parts: The “trigger” and the “legal hold.”

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The basic principle that an organization has a duty to preserve relevant information in anticipation of litigation is easy to articulate. However, the precise application of that duty can be elusive. Everyday, organizationapply the basic principle to real-world circumstances, confronting the issue of when the obligation is triggered and, once triggered, what is thscope of the obligation. This Article, intended to provide guidance on

Once again, this is a group effort by a special committee of The Sedona Conference called the “Working Group on Electronic Document Retention and Production.” The Working Group includes many well-known experts on this tricktopic. Under the guidance of the group’s editors, Conor Crowley, Eric Schwarz and Gregory Wood, thec These are common-sense-type principles that will, I predict, be acceptable to most companies, although still challenging for many to implement. It is also that these guidelines will often be referred to by courts when reviewing thereasonability of a party’s legal hold activities in litigation. If you can show that your organization made a good faith effort to follow these guidelines, tyou will be in a strong positioa

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The eleven guidelines include advice and language such as:

1 - notice of a “credible threat” of litigation as the trigger of the duty to reserve;

ation” of a written policy as key factor to show reasonableness and good faith;

e 3 - the need for established procedures to report potential litigation reats;

line 6 - the need to issue a written legal hold notice in most circumstances; nd,

or legal holds, once issued, to thereafter be “regularly onitored.”

ely the onsideration of the amount in controversy and related factors.

rcumstances nd the amount in controversy are factors that may be considered.

l who still routinely make

utrageously overbroad preservation demands.

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” factor. I think this is just a mistake that will be leaned up in the final draft.

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accessible, does not mean that it is outside of the scope of a duty to preserve.

Guidelinep Guideline 2 - the “adoption and consistent implementa Guidelinth Guidea Guideline 7 - the need fm Guideline 8 - provides important input on the scope of a hold, including the key ”proportionality” criteria that I have written about before, namc Guideline 7: In determining the scope of information that should be preserved, the nature of the issues raised in the matter, experience in similar cia The proportionality factor in determining the proper scope of a hold is oftenoverlooked, especially by some plaintiffs’ counseo The comments to guideline 7 also point out that accessibility is another importafactor to consider in determining the proper scope of preservation. In fact, the wording of guideline 7 in the commentary is slightly different from the wording quoted above that appears at the beginning of the document. They both begin the same, but the version in the comments sections ends with ”accessibthe information” as a factor that may be considered, instead of the first stated ”amount in controversyc The comments do, however, make clear that the issue of the costs and burtry to preserve certain types of data, including, as the comments mention, “voicemail and instant messaging” should be considered. In my view, this means that in many circumstances, not-reasonably-accessible ESI does not need to be preserved. The Sedona comments to guideline 7 do not, however, go quite thatfar. They instead make the point, which is not necessarily contrary because is dependent on the facts, that just because a type of ESI is not-reasonably-

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We all agree that it depends on the circumstances. In some circumstances, the inaccessibility of ESI will take it outside of the scope of preservation, but in some circumstances it will not. In my view, the general bias should be to exclude not-reasonably-accessible ESI from preservation. As I have mentioned several times previously in this blog, I think Judge Schiendlin got it right in Zubulake IV when she held:

The scope of a party’s preservation obligation can be described as follows: Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure the preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes, for example, typically maintained solely for the purpose of disaster recovery, which may continue to be recycled on the schedule set forth in the company’s policy. (emphasis added)

Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003). Backup tapes are, of course, a prime example of not-reasonably-accessible ESI. Guideline 8 is the most detailed guideline: A legal hold is most effective when it:

(a) Identifies the persons who are likely to have relevant information and communicates a preservation notice to those persons; (b) Communicates the preservation notice in a manner that ensures the recipients will receive actual, comprehensible and effective notice of the requirement to preserve information; (c) Is in written form; (d) Clearly defines what information is to be preserved and how the preservation is to be undertaken; (e) Is periodically reviewed and, when necessary, reissued in either its original or an amended form.

Guideline 8 comes with a sample Certification of Completion document (Appendix B) designed to serve as a checklist for the recipient to confirm that he or she has complied with a hold notice. It requires the recipient to certify to the general counsel’s office that they have searched a long list of locations where responsive ESI might be located, including the LAN server for their office, laptop and office computer, email, home computers, Blackberries, email trash bin and desktop recycle bin, “removable storage media, such as disks, CDs, DVDs, memory sticks, and thumb drives,” and “files of any administrative personnel working for me.” Many companies will dislike how extensive and complete this list is, especially the inclusion of home computers, removable storage media and secretarial ESI. The commentary softens the blow somewhat by clarifying that this is not a form;

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it is only a sample, and may not be appropriate for every case. Still, this long list could put a huge search burden on many employees that is not appropriate for many cases, and so this aspect of the commentary is likely to be controversial. Another controversial aspect of guideline 8 is its placement of the burden for search and preservation upon the individual employees themselves, instead of on the company, its IT department or automated procedures. This let-the-employees-do-everything procedure has been the norm in the past, but is beginning to be challenged by many courts, especially where there is inadequate follow-up. See Cache La Poudre Feeds, LLC v. Land O’Lakes Farmland Feed, LLC, 2007 WL 684001 (D.Colo. March 2, 2007) and my prior blog on the subject "Litigation Hold Is Not Enough: Sanctions Imposed Under Rule 26(g) for Negligent Collection and Preservation." Email Guidelines The second commentary on email is a short gem edited by Thomas Y. Allman, The Sedona Conference Commentary on Email Management: Guidelines for the Selection of Retention Policy (August 2007). The commentary begins with a flurry of statistics showing the prevalence of email today, citing to one study estimating that 183 billion email messages a day were sent in 2006. This is quite a bit larger than the previous estimates I have seen of 60 Billion a day. Whatever, it is huge, and getting bigger every day, and everyone knows the strongest ESI evidence is usually an intemperate email. See my prior blog "Top Corporate Officers Continue To Write Embarrassing Emails." That is why most litigation today correctly focuses on email, and why this email commentary is so important. The Sedona working group on email was able to agree on four general guidelines: Guideline 1 - email retention policies should reflect the input of functional and business units through a team approach and should include the entire organization including any operations outside the United States. As the name of this blog indicates, "e-Discovery Team," I obviously think they have it right to emphasize the need for the team approach in forming policies of any kind, not just email. The commentary explains that this should be an interdisciplinary team including legal, IT and management, including “records management, compliance, finance and representatives of major business units.” The commentary also mentions that the internal corporate team may want to utilize outside counsel, consultants and vendors. They also recommend that:

A fully engaged responsible person should be appointed to lead the team to work closely on implementation, including recommendations on budget

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or funding decisions as well as monitoring the program after implementation.

The next guideline points to the obvious need to understand the actual practices of the organization, as opposed to its written rules on emails, since in most organizations there is a gap between the two that the team needs to address. Guideline 2 - the team should develop a current understanding of email retention polices and practices actually in use within the entity. The commentary includes a list of useful questions for the team to ask to explore the organization’s actual practices. The third guideline states: Guideline 3 - an entity should select features for updates or revisions of email retention policy with the understanding that a variety of possible approaches reflecting size, complexity and policy priorities are possible. The commentaries on guideline 3 point out that it is usually difficult to reach consensus between the different needs of the groups represented in the team, and suggests open discussion of the differences as the best approach. See Osterman, “E-Mail Archiving Dependent upon Corporate Culture,” Network World (March 22, 2005) (describing the resolution of competing views of legal counsel who preferred to purge and a compliance officer who preferred to save email). To help the team reach a consensus, the guidelines include an appendix with two opposite email policy statements. Policy 1 is based on a “short default retention strategy” where emails are only retained for a short period (e.g., 30-90 days) and thereafter are automatically deleted. The user can only avoid this deletion “by taking explicit, affirmative actions” such as moving the email to a dedicated storage area. The other opposite policy 2 is based on an “indefinite default retention strategy.” In this policy, email is retained on active servers for a time, and then “moved automatically to tiered storage and retained indefinitely” or some other specified period such as three to five years. The fourth guideline states: Guideline 4 - any technical solutions should meet the functional requirements identified as part of policy development and should be carefully integrated into existing systems. Most e-discovery teams studying these issues find that some kind of software and hardware purchases are needed to implement their recommended email practices. This guideline addresses this reality, and counsels the importance of carefully integrating the new purchases into existing systems. The commentary

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notes that there are many different software and hardware solutions offered by competing vendors to solve these problems, and no one approach is superior. The commentary then provides a list of practical issues to consider when evaluating competing vendor proposals. Every e-discovery team in America struggles with email issues and all will benefit from these pioneering guidelines.

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Rule 37(f) Safe Harbor Requires Routines That Most Companies Lack New Rule 37(f) creates a “safe harbor” for a company to destroy ESI as part of its routine electronic records management practices. Unfortunately, this harbor is beyond the reach of most companies because they lack established routines for ESI retention and destruction. The rule states:

(f) Electronically stored information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.

The routine good faith operation of an electronic records storage system can be proven by reference to a company’s written records retention policy. That is the document, usually very long and complicated, that tells you when to save records, and for how long, and when to delete them. If the deletion of ESI was in accordance with the company’s written manual on the subject, then you may be able to prove the loss of evidence was the result of routine and good faith operations. This assumes, however, that: a) the company has such a manual; and, b) the book is routinely followed. In reality, a company’s records retention policies are often ignored, and seldom enforced. That makes the routine needed for Rule 37(f) safe harbor protection a difficult element for most companies to prove. There are many reason for this, including that the records manual is usually too long and incomprehensible, and everyone finds this whole subject too boring and unimportant to deal with. So people just do what they want with the records they control. This seems to be especially true of IT employees, who, it seems, frequently follow their own rules based on the “we know better principle.” For instance, the book may say to recycle backup tapes every three years, but in reality you may have tapes going back for decades. The tapes are probably unlabeled, and no one has any real idea what is on them, much less how to restore them. Still, the company may have to produce these tapes someday, and pay experts a small fourtune to restore them to try to find missing evidence.

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In the event a written records retention policy is not uniformly followed, a court will look to actual practices of a company to determine its “routine, good faith operation. ” Although a written manual will have consistent operation procedures specified, when you turn to actual practices by employees in a large company, consistency is rare. What is routine for one part of the IT department may be different from another part. It is worse when comparing individual employees, some of whom may be organized pack rats, and keep everything, and others may delete everything as soon as they read it. Playboy Enterprises, Inc. v. Welles, 60 F.Supp.2d 1050 (S.D.Ca. 1999) (Playmate explained that she had no emails to produce because she always deleted an email right after she read it.) The result is that it is hard, if not difficult for most companies today to take advantage of the “safe harbor” provided by Rule 37(f). They cannot do so because they do not have routines. About the only thing that is likely to fall within the purview of the rule for most companies is the automatic “janitor” programs that delete things without need for any human intervention at all. For instance, if a file is not used within a set time period, it will be automatically deleted. In fact, this is a common practice for ESI, but impossible for paper records. (Xerox has, however, recently invented a new kind of printer and paper wherein the document automatically erases itself after a few days.) Even in the case of automatic ESI destruction, the defense will only work if the electronic janitor did its job before the human in IT was, or should have been, told by legal that there was a lawsuit brewing, and the auto-destruction routines should be placed on hold. If a litigation hold was not implemented when it should have been, then the practice lacks the good faith needed for the safe harbor, even if it has the routine. This is made clear by the rules commentary, which states:

The good faith requirement of Rule 37(f) means that a party is not permitted to exploit the routine operation of an information system to thwart discovery obligations by allowing that operation to continue in order to destroy specific stored information that it is required to preserve. When a party is under a duty to preserve information because of pending or reasonably anticipated litigation, intervention in the routine operation of an information system is one aspect of what is often called a “litigation hold.”

As mentioned, unlike paper records, ESI can automatically throw itself away. This distinction between paper and electronic records is the genesis behind Rule 37(f). The commentary to the new rule, which is quoted in full in the above blog page on Rule 37, explains the difference between paper records and ESI this way:

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The “routine operation” of computer systems includes the alteration and overwriting of information, often without the operator’s specific direction or awareness, a feature with no direct counterpart in hard-copy documents. Such features are essential to the operation of electronic information systems.

On the other hand, if paper evidence is destroyed, it is frequently evidence of culpable conduct. For instance, one tech company apparently began preparing for patent litigation by getting rid of evidence that might make its cases more difficult. Rambus, Inc. v. Infineon Tech. AG, 220 F.R.D. 264, 284 (E.D. Va. 2004); Rambus, Inc. v. Infineon Techs. AG, 155 F.Supp.2d 668, 680-83 (E.D.Va.2001); Rambus, Inc. v. Infineon Techs. AG, 222 F.R.D. 280, 286 (E.D.Va.2004); Samsung Electronics Co., Ltd. v. Rambus, Inc., 439 F.Supp.2d 524 (E.D.Va., July 18, 2006). The company began its records destruction campaign by establishing a new records “retention” policy. It began to implement the new policy with what it called “Shred Days,” where, I kid you not, they gave every employee a burlap bag to fill up with papers to be shredded, followed by pizza parties. They managed to destroy 2.7 million pages of documents this way, but the strategy failed in the end, and resulted in spoliation sanctions instead.