(istock.com)

The future of e-discovery might be best be likened to a wedding. Although e-discovery has a past filled with confusion, complications and cost explosions, it seems to have finally found its perfect mate in big data.

There also are changes looming in federal and state regulations governing e-discovery, maybe even in Georgia, which so far has rejected any revisions to discovery-related sections of the state Civil Practice Act.

With cybercrime and data breaches on the rise around the world, corporations and law firms will step up security to protect their growing troves of electronically stored information (ESI).

The ground has shifted dramatically since 2006, when the Federal Rules of Civil Procedures set the first regulations for e-discovery and standards for ESI. Predicting where e-discovery will be a year from now is no easy task, say lawyers around Atlanta who are specialists in the field. But, for better or worse, changes are coming, and fast.

Marriage of e-discovery, big data

Jon Neiditz is a partner and the big data practice leader at Kilpatrick Townsend. Craig Cannon is the firm’s global head of e-discovery and information management team.

“When I came in, Jon was already here,” Cannon says. “We both knew we needed to get together pretty quickly.”

Cannon was focused on making sure data was accessible for litigation or using strategies to mitigate e-discovery impacts on clients. “Jon, on the other hand, was looking at data as something that could be used to help the business grow, for analytics purposes, for developing new products,” Cannon says.

Neiditz says he knew the marriage would happen.

“My whole thing has been information governance,” he says. “What we’ve seen is a confluence with regard to governance strategies and a confluence with regard to technology. So we begin to see the big-data tools coming into the e-discovery world and the interest in the use of predictive coding outside the e-discovery world. This is a new migration.

“These two parallel universes — big data and the predictive coding world. I’ve been waiting for these worlds to come together,” Neiditz adds.

To define big data only in terms of volume is a mistake, Neiditz says. You need to add two more V’s—velocity and variety.

“My favorite sentence to describe velocity is, ‘Would you cross the street based on information that was 5 minutes old?’ Information is coming at you really quickly, and you’ve got to process it in real time.”

Variety, he added, means that all sorts of data and sources of data that were previously unintelligible are now easily accessible. That can be a good or bad, depending on which side of the case you’re on.

Kilpatrick Townsend has a client going through such an exercise, Cannon says.

“It’s going to require Jon to help them with data privacy and security issues.” Cannon explains. “But then I have to prepare them and say, ‘Look, somebody’s going to want to have access to your database, and you should have a strategy in place for addressing that. Fishing in the big-data lake can get you a much bigger fish than you could possibly eat.”

Newlyweds adjust to life together

“We’re seeing a lot of our clients, particularly the big ones, looking at using big data as an option,” Cannon says. “The next 12 months will be more of an educational thing for corporations.”

The more a company understands its own flow of information management, the more it can control the cost of e-discovery when litigation arises, says Melissa Rogozinski, founder of ESI roundtable, which provides e-discovery CLE’s in several Southern cities, including Atlanta.

“Law firms with educated e-discovery practice groups are better suited to work with companies and in-house counsel to develop policies and build a collaborative team to implement and manage these strategies,” she says.

Cannon also sees growth in the number of lawyers who have MBAs and technology degrees. “You’ll see lawyers who don’t focus on the billable hour for the client,” he says. They will be more focused on the operational aspects from a technology standpoint—how do you do e-discovery, and how do you make it efficient for a client?”

That, Cannon says, also will result in continued growth in that area for law schools. “It really does require an understanding of the law and an understanding of technology.”

Internet-world security

K. Alex Khoury, a partner at Balch & Bingham and co-chair of the firm’s electronic discovery and data management group, says the future of e-discovery is in the present. Security is taking up a lot of his time, because cybercrime is on the rise.

Data breaches at Target, Neiman-Marcus, Michaels and eBay, plus the indictment of Chinese officials for spying on American corporations, has a lot of corporations, and their law firms, taking a harder look at data security, Khoury says.

“Law firms handle massive amounts of our clients’ confidential data and trade secrets in discovery, and yet, most firms have not invested as much in data security as the corporations they serve,” Khoury says. “As a result, data thieves are learning that law firms are typically soft targets that provide ‘back door’ access to valuable corporate data.”

The problem, Khoury says, is that law firms are not in the technology business and, with only a handful of exceptions, cannot invest the time and resources to stay ahead of the rapidly evolving world of cybercrime.

“This problem is compounded by the legal technology industry’s rush to market with new smartphone and tablet apps and other software solutions that promise to make our jobs easier but have not been adequately tested for security.”

Khoury says several attorneys in his office recently asked him to look into a cloud-based case management program they were interested in trying. “When I asked the vendor if they had a data-breach response plan and could I see it, their response was, ‘What’s that?’ Needless to say, I did not recommend the program.”

With e-discovery tools blooming and big data growing exponentially, trends related to legal e-security are starting to appear.

Firms that were flirting with internalizing the technology side of e-discovery—processing, culling and hosting—are abandoning that model, Khoury says, while corporations and e-discovery vendors are investing millions of dollars in state-of-the-art data centers and employing information security officers, network security and forensic specialists to protect data from outside threats.

“Unless [law] firms are willing to do the same, they may find clients increasingly unwilling to turn over sensitive data to them,” Khoury added. “Rather than make that kind of investment in security, I think most firms will outsource the handling and storage of sensitive data to vendors vetted for their security capabilities.”

Another trend is law firms buying data-breach insurance, Khoury says. “Corporations are buying it, reputable vendors are buying it and law firms that want to continue to handle their client’s data will have to buy it, too.”

Changing laws and legislatures

Alison A. Grounds is a partner at Troutman Sanders and managing director of the firm’s eMerge department. But at this year’s session of the Georgia General Assembly, she described herself as “the representative e-discovery nerd/guru.”

Grounds is a member of the Joint e-Discovery Task Force of the Georgia Bar and Georgia Chamber of Commerce, which formed two years ago to propose legislation on e-discovery reform. At least 44 states have adopted laws dealing with ESI, but Georgia has not.

The 2014 bill that was based on the task force’s recommendations revised numerous discovery-related sections of the Georgia Civil Practice Act. The bill struck a balance between the important role of discovery and the desire to keep litigation costs proportional to the nature of the dispute, Grounds says. It focused on proportionality, mechanisms for cooperation and guidance for e-discovery issues such as limiting burdens for nonparty discovery and providing a safe harbor and clear standard for awarding sanctions for failure to preserve ESI.

The bill largely mirrored existing rules at the federal level and language recently adopted by states such as Florida and North Carolina, Grounds says. “I provided testimony regarding the real-world implications of the bill on lawyers, clients and cases of all sizes from a unique perspective of actually living these issues daily.”

The legislation was amended in the House to remove the emphasis on proportionality and burden reductions and add provisions to increase the costs, burdens and risks associated with e-discovery, Grounds says.

“These revisions did not mirror any existing or proposed rules and allowed the strongest of sanctions for mere negligence without even requiring substantial prejudice,” Grounds says. “The net impact of these revisions to the original proposals was to increase the costs and burdens of e-discovery on all litigants by requiring over preservation and increasing downstream costs for collecting, filtering, reviewing, logging and producing ESI.”

With lobbyists from the state Chamber of Commerce on one side and the Georgia Trial Lawyers Association on the other, an amended bill passed the House but bogged down in the Senate and ultimately failed.

“We tried, but there were too many people tugging at what they wanted in the bill,” says Rep. Wendell Willard, R-Sandy Springs, chairman of the House Judiciary Committee and sponsor of the e-discovery bill.

Willard says he plans to wait and see what happens to the ongoing reform of federal rules on e-discovery, which are scheduled to be revised next year. Grounds says the Legislature needs to get back to the task force’s original recommendations.

“The proposed amendments to the federal rules have moved closer to passage and have been modified to strengthen the safe harbor and limits on severe sanctions,” she says. “A key solution is for Georgia to mirror the latest proposals to the federal rules.”

Meanwhile, federal case law on e-discovery is maturing, says Khoury. “More and more federal judges understand the practical and technical issues arising from discovery of electronically stored information, and, as a result, momentum is building behind the use of proportionality as a means to control the escalating cost of discovery.”

Georgia’s case law on e-discovery remains undeveloped, he adds, largely because the Legislature has been unable to pass e-discovery rules to guide the courts. As a result, he says, e-discovery in Georgia is unpredictable and varies greatly from judge to judge.

“The secret weapons against the escalating costs of e-discovery are communication and cooperation between the parties,” Khoury says, “and the proposed [federal] rule changes are intended to promote both.”

Sounds like wedding vows.