The New World of Electronic Discovery Records Retention

The New World of Electronic Discovery & Records Retention Matthew Nelson, Esq. Legal Consultant EMC Global Compliance Practice May 23, 2008 1

EMC Global Compliance Practice Deep subject matter experts with diverse skills and experiences. . . 20 Professionals – Attorneys – Six Sigma Belts, CIPP, Certified Project Management Professional (PMP) – Dozens of legal and industry group presentations, dozens of publications – Author of “e. Discovery for Dummies” – Veterans from: Zantaz, Renew. Data, Kroll, EED, Altria, State Attorney General, Wilmer Hale, Fulbright Sustaining members of The Sedona Conference: WG 1, WG 6 Founding member of the EDRM EMC Corporation Copyright 2006. All Rights Reserved. CT TX NY CA CO GA MA 2

Discussion Points The New World of Electronic Discovery e. Discovery Technology Trends What about Records Retention? EMC Corporation Copyright 2006. All Rights Reserved. 3

Discussion Points The New World of Electronic Discovery e. Discovery Technology Trends What about Records Retention? EMC Corporation Copyright 2006. All Rights Reserved. 4

Information Volume and Complexity are Exploding Customers Applications video quotes contracts SOPs presentations Employees images manuals reports whitepapers images memos forecasts SOW analysis XML quotes Partners Vo. IP research directories email Information proposalsmodels Web resumes tests POS reports RFID inventory billing notes payroll brochures photosbalances illustrations reports warranties Infrastructure whitepapers plans orders specs email articles models designs images models EMC Corporation Copyright 2006. All Rights Reserved. 5

Information Volume & Complexity - Problems Increasing Storage Costs Unsupported legacy hardware/software systems Increased IT Administrative Costs Business Inefficiencies Security Risks Unmanaged Content EMC Corporation Copyright 2006. All Rights Reserved. 6

What is Electronic Discovery? Any process in which electronic data is sought, located, secured, and searched with the intent of using it as evidence in a legal case or regulatory matter. • Litigation • Public Record Requests (FOIA, PRA) • Regulatory Inquiries (SEC, DOJ) • Internal investigations (Employee matters, trade secrets, etc. ) EMC Corporation Copyright 2006. All Rights Reserved. 7

Sanctions: Zubulake v. UBS Warburg • • Routine Employment Litigation Failure to Preserve Evidence Sanctions – Adverse Jury Instruction Outcome $29 Million Verdict Zubulake v. UBS Warburg, 217 F. R. D. 309 (S. D. N. Y. 2003). EMC Corporation Copyright 2006. All Rights Reserved. 8

Sanctions: Government Immunity? United Medical Supply v. U. S. • Government contractor filed suit against the U. S. for breach of contract • The court blamed staff and inadequate document retention and preservation policies at the Department of Justice and the Department of Defense for destroying documents and stated: “a good argument can be made that, as the enforcer of the laws, the United States should take this duty (to preserve evidence) more seriously than any other litigant. ” • Sanctions: • Government prohibited from cross-examining plaintiff’s expert regarding destruction of evidence. • U. S. required to reimburse plaintiff for any additional discovery-related costs and attorney’s fees. United Medical Supply. Co. , v. United States, 77 Fed. Cl. 257 (2007). EMC Corporation Copyright 2006. All Rights Reserved. 9

e. Discovery Themes & Trends - New Federal Rules (Over) Simplified Electronically Stored Information (ESI) is subject to production – Management prior to discovery impacts costs of e. Discovery Early “meet and confer” Word “preserving” appears in the rules for the first time Requirement to understand the “sources” of ESI Less obligation to produce content that is “not reasonably accessible” – But you still may have to hold it (can be just as burdensome) Limited “safe harbor” for good faith inadvertent destruction of content – Best protection through solid r/m program, including litigation hold Some protection for inadvertent waiver of a/c/p materials EMC Corporation Copyright 2006. All Rights Reserved. 10

Discussion Points The New World of Electronic Discovery e. Discovery Technology Trends What about Records Retention? EMC Corporation Copyright 2006. All Rights Reserved. 11

Shift & Evolution of Ecosystem e. Discovery Themes & Trends – Reactive to Proactive Approach Collect Process Legal Review Produce Outside Counsel Corporation Opposing Entity 3 rd Party Vendors • Preserve & Hold • Exchange • File Shares • Laptops • Paper • Backup Tapes • Other Systems • De-Duplication • Culling/Filtering • Metadata extraction • File Conversion • Authentication • Legal Review Shift towards in-sourcing some or all of these activities EMC Corporation Copyright 2006. All Rights Reserved. 12

e. Discovery Themes & Trends: Proactive v. Reactive • Reactive model increases risk of legal exposure • Unmanaged & unknown data sources • Non-existent or un-enforced policies & procedures • No technology solution to streamline collection & retrieval • High risk of human error or non-compliance • Inability to insure adequate collection and retrieval • Increased risk of missed deadlines • Reactive model increases expense • No early case assessment by in-house counsel • Reliance on 3 rd party vendors for collection, searching, deduplication & processing • Increased outside counsel review costs • General Rule – more data transferred to 3 rd parties = more expense & risk EMC Corporation Copyright 2006. All Rights Reserved. 13

EMC e. Discovery Solution Email. Xtender, Disk. Xtender and Centera • e. Discovery for emails & attachments • Regulatory Compliance • Email Storage Management Stored IQ • e. Discovery for file shares, desk tops, lap tops • Data classification for Records Management EMC Corporation Copyright 2006. All Rights Reserved. 14

EMC Email. Xtender for e. Discovery & Compliance Archive and Retain Classify and Index • Messages and Attachments • Classification Folders Email. Xtender Capture • Secure • Tiered storage • PST Ingestion • Litigation Hold Dispose • In real time • Hash Value • De-duplication Email Archive Investigator Compliance/e. Discovery MS Exchange Servers (90 day? ) EMC Corporation Copyright 2006. All Rights Reserved. 15

EMC Email Xtender @ EMC In-House E-mail Archiving Implementation Email. Xtender, Disk. Xtender for Windows, and EMC Centera Internal goal for implementation: –Operational Improvements –Improved user experience –Automate retention policies –Eliminate personal archives Estimated $14 M cost savings in three years: – 58 percent cost reduction in storage and backup costs § 47 percent in backup costs – 60 percent reduction in production storage requirements EMC Corporation Copyright 2006. All Rights Reserved. 16

EMC Email. Xtender - Performing a Basic Search Sort messages by clicking on a column heading Status bar indicates progress and the number of matching items EMC Corporation Copyright 2006. All Rights Reserved. 17

Performing an Advanced Search Select the “More Choices” tab and enter additional options to create an advanced search EMC Corporation Copyright 2006. All Rights Reserved. 18

Email. Xtender Search and Access—Anywhere, Any Time Fast search of archived messages and attachments Access via: – Native client plug-in – Web access – OWA Access by: – Administrators – Supervisors – End users All Administrator and Supervisor access is audited EMC Corporation Copyright 2006. All Rights Reserved. 19

EMC e. Discovery Solution Email. Xtender, Disk. Xtender and Centera • e. Discovery for emails & attachments • Regulatory Compliance • Email Storage Management Stored IQ • e. Discovery for file shares, desk tops, lap tops • Data classification for Records Management EMC Corporation Copyright 2006. All Rights Reserved. 20

21

Discussion Points The New World of Electronic Discovery e. Discovery Technology Trends What about Records Retention? EMC Corporation Copyright 2006. All Rights Reserved. 22

Electronic Discovery Reference Model (EDRM) Proactive Policy Mgmt of Information Reactive Vendors Post-notice Discovery Process Customer goal: move from reactive outsourced model, to in-house policy and records management, and repeatable process for identification, collection and preservation/hold EMC Corporation Copyright 2006. All Rights Reserved. 23

Public Records – NM Public Records Act (Section 14 -3 -2 NMSA 1978) “Public records” ““A record can be anything that contains information that has been created or received in the course of business that can be used to provide information about some action. ” Is Email a public record? “Electronic mail which contains information that is created or received by any agency in connection with official business is a record…. ” EMC Corporation Copyright 2006. All Rights Reserved. 24

Dual Objectives = Dual ROI e. Discovery & Compliance goals are the same § Decrease Volume – De-duplication & automated retention/deletion • Compliance - Decrease storage costs • e. Discovery – Decreased 3 rd party de-duplication & processing costs § Decrease Risk – Archiving/Centralization • Compliance – automated retention tools streamline compliance • e. Discovery – fewer unmanaged data sources & less info subject to discovery § Simplify Retrieval – Archiving • Compliance – simplifies monitoring program & response procedure • e. Discovery – litigation hold & early case evaluation in minutes, not weeks § Policy/Procedures – email, e. Discovery • Compliance – transparent to end users leads to acceptance • e. Discovery – strengthens legal’s bargaining position § Security • Compliance – risk of information loss minimized • e. Discovery – auditing, chain of custody EMC Corporation Copyright 2006. All Rights Reserved. 25

Conclusion The New World of Electronic Discovery – Legal & IT Technology Trends – Shift to Enterprise Solutions e. Discovery & Records Retention – Dual ROI EMC Corporation Copyright 2006. All Rights Reserved. 26