eDiscovery in America – A Legend in the Making

03
Jul
2012

Christy Burke

Featuring Barry Murphy, Analyst with The eDJ Group and Contributor To eDiscoveryJournal.com

In honor of tomorrow being July 4th - Independence Day here in the US – LTO spoke with eDiscovery analyst and expert Barry Murphy of The eDJ Group, Inc. and eDiscoveryJournal.com about eDiscovery in America – looking at its past, present and future in the land of the red, white and blue.

Early Days of the eDiscovery Frontier
Like periods of America’s own history, eDiscovery started out as a Wild West frontier with little governance and lots of pioneers and cowboys staking out new territory.  Barry recalls that eDiscovery became a major factor toward the late 1990s and 2000 as several phenomenon converged, including the growing domination of email for business communication versus paper, scanning technology reaching its maturity, and the US government increasingly accepting digital images of items such as checks instead of requiring paper originals.

When the Federal Rules of Civil Procedure (FRCP) were amended in 2006, eDiscovery’s momentum was further accelerated to a dramatic degree.  Still in effect today, the FRCP rules stated that all electronic assets were subject to discovery, and that gave a massive push to the eDiscovery industry which is now a multi-billion dollar market.  However, the FRCP rules are fairly broad, vague and non-prescriptive, meaning that they don’t explicitly tell people exactly what to do so there is ample room for interpretation – and error.

Examining eDiscovery in the US vs. Elsewhere
Clearly, the eDiscovery burden affects all nations to some extent because computers are everywhere, but what is unique about eDiscovery in America?  Barry explains that the US looks more all-inclusively upon privacy than the rest of the world, requiring transparency and greater disclosure of information, as well as blurring the lines between personal and professional communications.  A personal email may be used as evidence in a corporate litigation so employees’ gmail and Hotmail accounts are potentially discoverable here.

In contrast, Barry explains that a typical Western European company’s goal is to protect the privacy of employees in whichever countries they are based.  However, the US requires these companies to comply with American rules when operating in its jurisdictions.  Basically, if another country’s privacy rules conflict with US ones, the foreign entity can decide to violate rules of the US or its own country – either way, it will incur the wrath of one of the courts – it’s a catch-22.

Other countries like China are stricter in terms of allowing collections of eDiscovery to cross their borders.  In fact, Barry notes that unfortunate eDiscovery consultants from major consulting firms have been detained or thrown in jail for attempting to transport hard drives out of China to get them back to the US.

American eDiscovery Trends, Present and Future
Barry truly believes that eDiscovery trends and issues are becoming so pervasive that they will eventually reach the desk of the American Presidency.

Here are some American eDiscovery-related trends that Barry says are gripping the nation at this time and will impact the future of legal:

1. Evolution of Cloud Computing
   Cloud computing is affecting eDiscovery because the well-named “cloud” is so vague and the case law surrounding it is fairly minimal.  In many instances, there are no clear standards for who takes responsibility for the data stored in the cloud – cloud vendors don’t want to sign indemnity clauses, but law firms and GCs are requiring such clauses before buying cloud solutions.  The fact that corporations and law firms are moving to cloud-based platforms without considering the eDiscovery issues muddies the waters further – it’s just a matter of time before some of these situations blow up into large-scale litigations.
2. Trend Toward Defensible Expiration and Deletion
   Inside and outside counsel need to get their houses in order and take out the electronic trash; this entails getting rid of documents, emails and backup tapes that are obsolete.  Certain organizations are starting to mobilize to create information governance strategies that address this.  Barry estimates that about 33% of organizations have active defensible deletion or information governance plans in place, 33% are planning to, and about 33% don’t have a plan in place yet – and are perhaps still saving everything, which could mean disaster in the event of litigation.
3. Rise of Analytical Technology
   Some of the most important drivers in eDiscovery technology today are lowering costs and minimizing risks.  These priorities have given rise to analytical technology that automates processes formerly performed by lawyers and legal staff.  This includes much-heralded predictive coding and assisted document review. For a great overview of Predictive Coding, read Sharon Nelson and John Simek’s post from LTO’s June 13 edition: http://bit.ly/L6bZXO.
4. Lawyer Jobs in Litigation Review Dwindle or Migrate
   Technology continues to get smarter and more efficient so lawyers’ eyeballs are needed less and less.  Though great for keeping costs down, this has an overall effect on lawyer jobs and the money lawyers make – instead of a 6-figure salary, many lawyers now have to compete for jobs to review documents for $30/hour.  Some are even going back to their law schools asking for financial assistance because they cannot find jobs or pay off their loans.  And lawyer jobs in more expensive cities such as New York and San Francisco have migrated to less expensive markets such as Dayton, OH, Charlotte, NC and Kalamazoo as part of a trend Barry describes as “farmsourcing” or rural outsourcing.
5. Battle of the eDiscovery Credentials
   Acknowledging the recent controversy about eDiscovery credentials awarded by various bodies such as ACEDS and the OLP, Barry and eDiscoveryJournal are conducting an eDiscovery Education Training and Certification Survey (http://bit.ly/LdAxui) which seeks to benchmark which programs people have enrolled in and how the credentials have helped them get jobs.  Time will tell as to whether the US government will eventually get involved to dictate eDiscovery certification criteria across-the-board.

Overall, Barry says that eDiscovery is moving toward greater levels of standardization and that the industry will continue to consolidate.  Legal and IT professionals realize that real, solid standards are needed to avoid the costly nightmares that have exploded in their faces over the past several years.

The Decade Ahead
The next ten years will present major changes in eDiscovery in America.  What was once a Wild West has now become more organized with the pioneers having blazed a trail so the settlers could create more stability and predictability, otherwise known as case law precedents.  There is still room for more law and order to govern the process, and judges are demanding that counsel learn more to properly serve clients’ needs. Lawyers and legal IT who fail to educate themselves are doing their clients, and themselves, a great disservice.

The pioneer spirit is still alive and well and there is currently much discussion about revising the FRCP rules to include be more specific and descriptive on a number of topics, including data preservation and sanctions.  In fact, the Advisory Committee on Civil Rules met this past March to discuss amendments to the FRCP.  The jury is still out on what will happen there.

Certain states are bucking the system, too – for example, the Pennsylvania Supreme Court recently rejected the FRCP rules for state actions (as covered by the eLessons Learned blog here on June 12th: http://ellblog.com/?p=2991).

US history is full of great tales of victory, and the eDiscovery industry is clearly a legend in the making.  How many other business sectors have continued to grow exponentially in the face of an international recession?  Very few.  Time will tell as to whether eDiscovery will continue to grow as a separate entity, level off, or eventually be absorbed into larger companies like IBM and EMC that do enterprise content management and information governance.  For now, we can be grateful for controversy and excitement and dollars that eDiscovery has brought into the legal arena.  After all, the Fourth of July is never any fun without some fireworks!