The Impact of E-Discovery on Records and Information Management

The electronic records your company creates and retains are more than a convenience for your personal record keeping; according to federal law, those records are subject to discovery requests if you are faced with litigation. Everything from word processing documents and spreadsheets to e-mail and instant messaging must be transparent and accessible to e-discovery requests. The sheer volume of electronic records can be overwhelming - in fact, a majority of documents, although also maintained and filed as paper records, are created and stored electronically as well.

E-DISCOVERY AND THE LAW

As of Dec. 2006, amendments to the Federal Rules of Civil Procedure effectively made all electronic information discoverable. Companies of all sizes and in all industries are affected by the rules, which means firms are required to produce electronic records as part of the pretrial process when dealing with litigation. While many executives and IT professionals may not realize the seriousness of the rules, companies are beginning to feel the results financially in legal judgments. For example, Morgan Stanley was ordered to pay more than $1.5 billion in May 2005when a judge found the company failed top reserve electronic information. Well known firms such as Meck, Prudential Equity Group and Morgan Stanley have recently been affected in e-discovery cases, resulting in financial, legal and public relations ramifications.

WHO IS PREPARED?

A LexisNexis survey found only seven percent of corporate counsel attorneys rate their companies as prepared for the new Federal Rules of Civil Procedure as they pertain to e-discovery. Computerworld magazine reported 42 percent of IT managers and staffers did not know the status of their company's preparation for the new rules, and 32 percent said their companies were not prepared. Filling a 300-plus page document, the new rules are extensive, and many companies have not allocated the resources to make sure they are prepared to meet the challenge of an e-discovery request.

THE AFFECT ON RECORDS MANAGEMENT

Management of electronic records has become a critical RIM issue. With the scope of electronic documents being created, combined with the requirements to produce electronic data, companies must address this looming issue. Litigation rates are also increasing, so individual companies are faced with a very real possibility of being sued, audited or investigated. New requirements are stringent and complicated, but effective records and information management policies can help in preparation as well as alleviate some of the pressures involved in e-discovery.

E-DISCOVERY STATISTICS

99 percent of all records are created electronically.

32 percent of IT professionals say their companies are not prepared to meet e-discovery requests.

93 percent of corporate litigation attorneys rate their companies as unprepared.