The Challenge of Historical Corporate Collections, Leveraging Legal Demands – Part 1 of 2

As corporations slowly face the consequences of unmanaged information assets, they have started to form ESI retention policies, acquire email archives and other enterprise technologies needed to track and dispose of newly created communications. It is much simpler to enable policy, process and technology to handle the go forward content than to deal with years or decades of accumulated unstructured content. Most public corporations have existing preservation requirements to deal with on top of possible long term retention regulations.

The combination of the 2000-2002 public corporate scandals and heavy sanctions like the Zubulake v. UBS Warburg LLC, et al., S.D.N.Y 02 CV 1234 (SAS) 7/20/04; 2004 U.S. Dist. LEXIS (S.D.N.Y, July 20, 2004) case resulted in panicked phone calls from Legal to IT asking, “Are we keeping everything?”We know that IT was not keeping EVERYTHING before, but suddenly tape backup systems were repurposed from one month disaster recovery systems to impromptu preservation systems. Even if the company has faced those growing stockpiles of tape and conquered that mountain, the revised FRCP are so new that most General Counsels have been reluctant to approve of the resumption of destruction policies without a full assessment and revision of existing paper-based policies.

 This leaves many companies, municipalities and other entities struggling with whether to tackle their historical collections before or after putting new systems and policies in place. If they are not careful, it can paralyze their new retention initiative and leave them at even greater risk for increased cost and even sanctions. It is important to remember that the judiciary is always more critical of your current efforts to satisfy your retention and production obligations as compared to your historical ‘gaps’. In this light, we can see that the first priority is to put the process, technology and people in place to prevent ongoing data loss and control the costs as the company moves forward. You cannot change the past, but you can change your capabilities to meet current and future challenges.

Does that mean that you just ignore all the old ESI? Do you just ignore the terabytes of ‘Litigation Landmines’ (PST files) living on local and network drives until a litigation request demands them? That is actually a business cost versus risk decision that every entity above a certain size must make in light of their regulatory or litigation profile. It is definitely not ‘best practice’ to leave all that unstructured content out there, but the current business environment does not always allow us the luxury of true ‘best practice’ solutions without a clear short term ROI justification.

One method of attack is to leverage high priority litigation and regulatory events to fund and implement enterprise systems such as search, categorization, real time policy enforcement, archiving, continuous data protection and desktop backup. All of these technologies are a part of an overall discovery solution, but have immediate business applications that can justify their cost. The key to getting budget is the open communication and coordination between legal and IT. Instead of spending millions on service providers to respond to a single case, legal should bring IT, the business director and the insurance adjustor to the table to talk over in-house systems. As an example, a shareholder lawsuit might require such broad preservation and collection to justify conversion and ingestion of old tapes into an archive where they can be searched, categorized and even disposed of properly. Legal is a corporate cost center, but it is time to acknowledge that litigation is a fact of life in corporate America and quit spending like it is a one time event.

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