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For lawyers, preservation of data used to mean identifying and saving only those documents that might be relevant to a case. But in light of the severe sanctions for spoliation of evidence � witness the demise of Arthur Andersen � as well as the proliferation of vast and vaguely understood masses of electronic data, it is not surprising that lawyers today are quick to counsel clients to save everything. However, trying to save everything can actually undermine a company’s ability to defend itself in litigation, as well as balloon litigation budgets. Attorneys often mistakenly see backup tapes as a simple way to preserve evidence. They’re wrong. Actually, the primary purpose of data backups is disaster recovery, not evidence preservation. “Disaster” in this context means a wide variety of events that can cause a computer system to fail, from a minor event such as a disk-drive failure or a software glitch to a catastrophic event causing the destruction of a large amount of a company’s electronic data. Typically, when critical corporate databases fail, the business is able to quickly restore the lost data from backups. Tape systems used for disaster recovery often maintain multiple data backups on a daily basis, so that when a problem is identified, the system can be restored to the point in time just before the problem surfaced. To meet these disaster recovery requirements, the backup set is kept to a manageable size, typically just a week or two. By contrast, litigation can require the retention of relevant data for many years. Maintaining backup management databases and media for so long a time can create serious logistical problems and place heavy demands on the company’s computer systems. Preserving all backup tapes can require extensive modification of the entire backup system and, in some cases, the establishment of separate tape pools, tracking databases, and server hardware for long-term storage. THE COSTS OF COMPLIANCE Viewed in this light, a request from your counsel, your opponent, or the court to save all backup tapes suffers from a fundamental flaw: the goal is to preserve evidence, but complying with the request requires much more. It requires the corporation to change the very way it manages a key component of its computer system, the backup process. The request focuses on a specific technology rather than on its real goal, the preservation of evidence. Few attorneys know how computer systems work in large corporations or understand the sheer volume of data involved. They can easily fail to take into account just how much time and money it can cost the complying party to save all its data, to say nothing of the drain on the company’s human and physical resources. The hard reality is that IT departments have finite resources to achieve their basic mandate � keeping the organization’s data and systems running and secure. When counsel directs an IT department to radically alter its processes to preserve all data, the added burden can quickly exhaust system resources and incur additional media and storage costs. Many people assume that making a backup is simply a matter of running a backup program and copying data onto tapes. But corporate IT departments can be responsible for hundreds or even thousands of computers holding terabytes of data; in addition, they are responsible for guaranteeing disaster recovery for complex systems that companies, customers, and others depend upon for crucial information. To meet these responsibilities, large corporations have backup systems that include large servers, robotic backup silos, and other technology. Often data is spread across many tapes, and sophisticated database programs are needed to track the data. These systems are constantly rewriting and reusing tapes and updating the databases. Suddenly asking a corporation to “preserve all backup tapes” can quickly overload the database servers and tape silos, requiring unbudgeted investments in hardware and software systems. Evidence must be preserved, but not in a way that frustrates efficient discovery. Tapes contain enormous amounts of duplicate data, with the relevant and non-relevant data intermixed, making it difficult to identify and review the relatively small amount of data that’s important to the litigation. In the end, most of the data retained on tapes is never used in litigation and simply adds to the costs. A save-everything order can also create the need for more IT people to reconfigure the system and manage additional tapes. This, in turn, means either hiring more people or diverting people from other tasks (not easy when you consider that overburdening computer support staff is a key reason for system failures). If the matter proceeds to discovery, it gets even more expensive. Collecting, analyzing, and restoring archived electronic data and then providing platforms for its review is not cheap. For example, while the cost of a backup tape may be small ($20-$200), forensically restoring that tape or extracting data without restoration can cost several hundred dollars or more. Large organizations can generate thousands of these backup tapes in a short period of time, each containing the equivalent of millions of pages of data. Depending on their data backup protocol, they may recycle some or all of these tapes at fixed time periods. When a corporate backup system is doing its job, a single backup may require hundreds of tapes. If that multi-server backup needs to be searched and reviewed in response to litigation, then additional resources must be brought in to support the continued operations of the company. Because searching and selection of data cannot typically be done on active corporate servers, the company must either utilize unused processing capacity (a rare commodity) or hire third-party vendors such as electronic data discovery experts and that can be costly. And a sweeping preservation order virtually guarantees that much of the data on the backup tapes will be irrelevant to the suit. Yet someone has to bear the cost of determining that fact, and the burden is often shouldered by the complying party. And that’s not even addressing the cost of the teams of junior attorneys and paralegals who will have to review all the documents. In fact, some attorneys push for data preservation orders as part of their litigation strategy, knowing that the sheer cost of complying with a such an order can tip the dispute into settlement, regardless of the merits of the underlying case. So, how can you sidestep a proposed sweeping preservation order and counsel a company on how to preserve potentially relevant data � without crippling operations, incurring unnecessary costs, or running the risk of sanctions? A POLICY FOR RETAINING DOCUMENTS Proactively establishing and using a document retention policy can protect the company if and when it faces litigation. Here are tips for developing such a strategy: 1. Identify potentially relevant data and map its location throughout the organization. Know how and where data is stored and/or archived, and determine the best way to access and preserve it. 2. Determine what specific actions to take to ensure preservation, based on the nature of the litigation, the key players, the time period in question, and the substantive issues in the case. 3. Assemble an interdisciplinary team that includes legal, IT, records management, human resources, and representation from the affected business groups. 4. Develop an effective checklist that addresses relevant kinds of data and locations (including both data belonging to individuals and data belonging to groups such as public folders, team rooms, and discussion databases). 5. Create a clear, defensible collection process that preserves the full content of the data and includes adequate documentation and quality control. For archival data (e.g., pre-existing sets of backup media) use statistical data sampling techniques to fine-tune the preservation and review of potentially relevant material. 6. For ongoing preservation of new data, use automated software that preserves data based on specific search criteria such as user, date restrictions, or issue-based search terms. Determine likely discovery targets and then initiate automated collection systems that preserve data in a fully searchable database. By “collecting and loading” targeted data proactively, litigants eliminate the need to retain all data from all users in the corporation on backup tapes. 7. Document all the steps taken. Provide the opposing party with a list of individuals whose data will be preserved. In that way, the opposing party is assured that the company is preserving data from all people they regard as important. In the context of preserving evidence, counsel can build credibility and control costs by proactively establishing a document preservation policy. With a policy that focuses on the retention of case-specific, relevant context, counsel can meet the demands of litigation without imposing undue costs and other burdens on the corporation. Thomas Barnett is senior vice president and general counsel of SPI Technologies Inc. He can be contacted at t.barnett @spitech.com. For more information on SPI Technologies, visit www.spitech.com.

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