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The market for electronic data discovery services is expected to be $500 million by the end of 2003 and reach $2 billion by the end of 2005, reports Socha Consulting and Gelbmann & Associates. The legal industry is now knee-deep in vendors offering EDD: data collection, data conversion, data archiving, data filtering, data hosting, computer forensics and electronic discovery consulting. It seems the acronym already is overused and stretched beyond its original meaning. By definition, electronic discovery refers to the compulsory disclosure, at a party’s request, of electronic data that relates to a lawsuit. But in parlance, EDD now seems to refer to the “discovery” that most information is now in “electronic” form and everybody is rushing to get his or her digital house in order. To that end, a better description of this new area is electronic data management. Attorneys have — in earnest — started to incorporate EDD into their daily legal lives, by sending out electronic data preservation letters, asking for electronic media in discovery, retaining forensic examiners to acquire and examine electronic evidence, raising spoliation of electronic evidence issues. and bringing in EDD consultants to hold their hands as they learn this new dance step. Corporate entities also have begun thinking about electronic data in terms of electronic records retention policies, incident response teams and electronic risk control. All of this activity is being fueled by new regulatory compliance laws, such as Sarbanes-Oxley, Graham Leach Bliley, HIPAA, FERPA, the Patriot Act, California SB 1386, and new SEC and NASD rules. The three major forces at work here include: 1) new corporate regulatory compliance requirements; 2) the expansion of paper-based civil discovery into electronic data; and 3) the inherent need of businesses to organize and get a handle on the massive amount of electronic data that is accumulating at an astronomical rate. EDD vendors can be divided into computer forensics, electronic litigation support and electronic data consultants. All of these vendors play an important role in analyzing, gathering, processing, reviewing, securing and producing electronic data. Pricewaterhouse Coopers reports that e-mail accounts for nearly half the electronic information requested in litigation. FORENSICS Computer forensics deals with the non-invasive recovery of all available information including deleted files, file fragments and temporary data from hard drives and data storage devices. Computer forensics is driven by the clear court mandate that computer evidence be collected in a forensically sound manner. Companies like Guidance Software Inc. in Pasadena, Calif., and New Technologies Inc. of Gresham, Ore., are training thousands of new forensic examiners each year, looking to be a part of the forensic gold rush. However, vendors report that computer forensics experts are being used in less than 10 percent of cases. This is based on the realization that computer forensic experts are mainly used to find so-called “smoking guns” — and in 99 out of 100 cases there are no surprises. Criminal investigation continues to be where most of the action is in computer forensics. Electronic litigation support is divided into the collection and conversion of the electronic data that is the subject of a discovery request, the archiving of the raw data that is collected, and the hosting, filtering, and reviewing of the data that is collected. Most of the big vendors in this area are starting to provide “one-stop shopping” for all electronic data management needs. This consolidation-of-services trend is expected to continue. Litigation support vendors are primarily focused on the large volume cases and have for the most part ignored the smaller cases that don’t have the sheer volume of electronic data to justify the cost of outsourcing. However, vendors are rising to the occasion by developing EDD self-help tools, such as tools that help attorneys easily see metadata hidden in files. As the litigation support vendors mature and refine their tools, we will see most large firms outsourcing EDD instead of trying to handle it themselves. At that point, expect to see a significant consolidation of vendors offering services in this area. CONSULTANTS Consultants are playing an important role in taming the EDD beast as well. They are serving as EDD special masters, advisers to law firms on EDD matters, and advisers to corporations and other organizations on electronic risk control and regulatory compliance issues as mentioned above. Best practices are starting to emerge to put some reason and rationality into the EDD process. To that end, the Sedona Conference (a research and educational institute dedicated to the study of law and policy) has launched a “Working Group on Electronic Document Retention and Production.” It has created a report on EDD, “The Sedona Principles,” which was cited in the landmark SDNY case, Zubulake v. UBS Warburg. The group has developed best-practices recommendations and principles for addressing electronic document production. (See www.thesedonaconference.org.) Strong electronic document management policies that cover the document life cycle will be the linchpin of electronic data management. These policies should include: a clear purpose, succinct rules, emergency procedures to follow when civil or criminal litigation or prosecution arises, the proper categorization of all documents, defined retention periods for each document type, purging of all non-essential documents, the use of the best available technology to define and control the document life cycle, evidence preservation and suspension policy, wiping of unallocated spaces on hard drives, and periodic audits of the written policy to make sure it is actually working. Judges in state courts are using electronic discovery special masters for large cases that have started to hit the understaffed and under-financed court system. As the level of activity increases, we will start to see companies such as California’s JAMS dispute resolution center tackle EDD disputes. With all that said and done, it is important that lawyers try to keep things in perspective. Electronic discovery is no different than its paper counterpart except there is more of it. Although there are more places for evidence to live in the digital world, most of it will remain dormant and never see the light of day. Albert Barsocchini is a California lawyer, the principal of The LawTek Group and a member of the LTN Editorial Advisory board. He can be reached via e-mail at [email protected].

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