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In the aftermath of the Enron and Arthur Andersen cases, and with the passage of the Sarbanes-Oxley Act, lawyers may feel compelled to counsel clients to establish broad, indiscriminate document retention practices. After all, the stakes are high. Severe sanctions for spoliation can include adverse inferences, monetary fines and even jail terms of up to 20 years. But a knee-jerk response to save all data can seriously undermine your client’s ability to defend itself within a reasonable litigation budget. The good news: There are viable alternatives that can save your client time, money and headaches. So before you tell your client to save, save, save, consider the consequences. Judges and parties are often ignorant of how computer systems function in large corporations, and may not understand the sheer volume of data involved. They can fail to take into account just how much time and money it will cost the complying party, to say nothing of the drain on its human and physical resources. The reality: 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, it 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 are responsible for hundreds or thousands of servers holding terabytes of data, and responsible for guaranteeing disaster recovery for complex systems that companies, customers and others depend upon for crucial information. To meet these responsibilities, corporations must have backup systems that include servers, robotic back-up 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 back-up tapes” can quickly overload the database servers and tape silos, requiring unbudgeted investments in hardware and software systems. If the matter proceeds to discovery, it gets even more expensive. Collecting, analyzing and restoring archived electronic data, then providing platforms for its review, is not cheap. For example, while the costs of a backup tape may be small ($20 to $200), forensically restoring that tape can cost several thousand dollars. Large organizations generate tens of thousands or more of these backup tapes, each containing the equivalent of millions of pages of data. When a corporate backup system is doing its job, a single backup may require hundreds of tapes. If that multiserver backup needs to be searched and reviewed in response to a litigation, then additional resources must be brought in to support the continued operations of the company. Because searches and reviews cannot be done on the corporate servers, they must be carried out on whatever extra drive space is available. While alternative third-party vendors such as EDD specialists or disaster recovery centers exist, they cost money. 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 that 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 affirmatively push for these orders as part of litigation strategy. Savvy lawyers know that the sheer cost of complying with such an order can tip the dispute into settlement, regardless of the underlying action’s merits. ALTERNATIVES So, how can you defeat a proposed sweeping preservation order and advise your client on how to preserve potentially relevant data — without running the risk of sanctions, crippling company operations or incurring unnecessary costs? Proactively establishing and using a document retention policy can protect your client if and when it faces litigation. Here are some tips should you anticipate litigation: 1. Identify potentially relevant data and map its locations throughout your organization. Know how and where your data is stored and/or archived, and determine the best way to access and preserve it. 2. Determine what specific actions can be taken 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 data types and locations (including both data belonging to an individual 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 back-up media) use statistical data sampling techniques to fine-tune the preservation and review of potentially relevant material. 6. For preservation of new data on an ongoing basis, use automated software that preserves data based on specific search criteria such as user, date restrictions, or issue-based search terms. Determine who are likely discovery targets, and then initiate automated collection systems that preserve their 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 back-up tapes. 7. Document all the steps taken. Provide the opposing party with a list of individuals whose data will be preserved. That way, they’re assured that you are preserving data from all people the opposing party regards as important. By not reacting in fear, and proactively having a document preservation policy in place, you can establish credibility and help your client control costs. Thomas Barnett is vice president and general counsel at Electronic Evidence Discovery Inc., based in Seattle.

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