By Marie-Charlotte Patterson
Vice President, Product Management and Corporate Marketing
AXS-One
Why Records Management?
Recent events are changing the corporate e-discovery climate, causing some business leaders to question the effectiveness of an ad-hoc, “on-the-fly” approach. As high profile cases, including Qualcomm (“Qualcomm and Attorneys Sanctioned for ‘Monumental’ E-Discovery Violations,” Findlaw, 2008 ) and Morgan Stanley (“Morgan Stanley to Pay Millions for E-Mail Mismanagement,” E-Discovery Law, September 2007), have highlighted, waiting until the subpoena arrives and assuming that IT can quickly and easily make the requested materials available--and have the ability to preserve them--is an increasingly tricky bet.
IT analysts, such as Gartner, have long advocated the cost and risk
savings available by taking a proactive approach to e-discovery and
using an archive with solid records management policies. However,
despite numerous cost justification case studies, the adoption rate of
this technology has been relatively slow. But this might change in
short order, as recent e-mail and IT-related fiascos, including Bear
Stearns (“Two former Bear Stearns hedge fund managers indicted,” Los
Angeles Times, June 20, 2008) and the White House (“Where Are the White
House E-Mails?” Time, Jan. 23, 2008), have left corporations
scrambling. It seems that nothing speeds corporate action faster than
legal challenges with major cost and negative publicity implications.
Will the “summer of shame” (sub-prime fallout and the continued
government e-mail scandal) finally turn the procrastinators into
proactive managers of electronic records? Or will we continue to see
corporations wait for the inevitable subpoena to happen before taking
action and pay the price? Only time will tell, but one fact is clear:
In today’s corporate climate, electronic records management solutions
have never been more in demand.
FRCP and Today’s Judicial Climate
The December 2006
amendments to the Federal Rules of Civil Procedure (FRCP) established a
series of expectations about how litigants in federal court will handle
Electronically Stored Information (ESI) in both pre-trial presentation
and e-discovery. With the majority of discovery requests pertaining to
ESI, standardized expectations and procedures needed to be established. These amended FRCP arrived on the heels of several widely reported
corporate scandals and e-discovery debacles revolving around e-mail or
electronic communication and aimed to put an end to confusion and
inconsistent treatment of ESI. In one foul stroke, regulators and
courts put an end to the habitual corporate excuse of “I can’t find it”
and reset expectations regarding e-discovery.
The results of this change in expectations by the courts were
highlighted during Qualcomm v. Broadcom last year. In September 2006,
Qualcomm’s lawyers issued an expert declaration stating they had not
participated in the Joint Video Team, a video compression technology
initiative whose members were required to disclose any related patents
(“Qualcomm’s Hard-Learned Lessons,” Law.com, March 5, 2008). The
problem was that the plaintiff, Broadcom, found 46,000 electronic
documents indicating otherwise. The mistake cost Qualcomm their
copyright suit and millions of dollars--plus their attorneys were
referred to the California State Bar Association for possible further
sanctions.
Beyond E-mail
E-mail should be considered as the first
candidate when it comes to managing information risk. It is subpoenaed
in 75 percent of e-discovery cases. The key to managing risk is to
ensure that the appropriate teams--IT and legal departments (at a
minimum)--work together to establish records retention policies that
reflect the business’s regulatory obligations, business continuity
needs and litigation risks and its IT infrastructure. While we’re not
suggesting that IT managers go to law school and General Counsel takes
a crash course in IT, we are stressing that the legal team and business
users need to decide what records need to be retained, for how long and
in what format. IT has a limited and technical role to play in
determining records retention policy. Once the policies have been
established, IT needs to look at the requirements from a technical
perspective. As you develop your policies, remember that today’s corporate ESI
revolves around so much more than e-mail. New communication formats
have emerged or grown in recent years--IM, texting, blogs, wikis, etc.
Corporations should overhaul their records management policies to apply
uniformly to all forms of electronic records, not just e-mail.
A Cost-Saving Solution For All
Those hesitant about
records management costs should consider the alternative of ad hoc
solutions--especially in today’s increasingly litigious environment. A
Gartner study projects that in 2008 and 2009, companies without an
active policy and strategy for content archiving solutions will spend a
third more on e-discovery than those with such solutions in place.
What’s more, analysts and consultants suggest that there are some
15,000 regulations worldwide mandating the retention and management of
electronic records. This number is projected to double in the next few
years. Bottom line, the volume of ESI, the complexity of regulations
and the demands of e-discovery mean that a silo approach to records
management for specific regulations or record types is impractical and
expensive. Comprehensive electronic records management solutions should
be capable of supporting current and future regulatory and technology
needs. Will high-profile cases move companies to minimize their risk?
The
month of June brought high-profile legal battles to the surface. Two
former Bear Stearns fund managers were indicted for allegedly
misrepresenting the condition of a subprime mortgage fund to
shareholders, noting supposed e-mails that indicated knowledge the fund
was in trouble. And the controversy over allegedly missing White House
e-mails--473 days worth of messages between 2003 and 2005--continued to
unfold.
As the Wall Street financial institutions of this world head to
court, it’s a safe bet that electronic documents will be primary
exhibits in the search for the truth. Justice may be blind, but judges
aren’t--and none will accept “I can’t find the document” as an excuse.
Ways to Save
In addition to protecting a company from
unnecessary litigation-related expenses, a good records management
policy enables companies to save on online storage costs and redundant
backup tapes. Good records management also frees up IT support
resources from the time-consuming task of data retrieval and preserves
employee productivity by eliminating the need for wasted time spent
deleting e-mail.
In summary, every IT manager, general counsel, CFO, CIO--and
increasingly, CEO--should ask themselves if they have a plan to respond
to the growing complexities of managing electronic records. In today’s
tightening regulatory world and tightening budgets, a good records
management policy delivers protection of profits and costs--a concern
of every executive.
The Author
Joining AXS-One in 2004, Marie-Charlotte
Patterson brings to AXS-One 20 years of international marketing and
operational management experience in the software industry, with
specific domain expertise in the content management and archiving
sector. She is responsible for the company's worldwide marketing,
product management and knowledge transfer operations. Marie joined
AXS-One from IXOS, a German-headquartered provider of enterprise
content management (ECM) solutions that was acquired by Open Text in
2003, where she was responsible the organization's worldwide marketing
and business development functions. Prior to IXOS, Marie held
senior-level marketing and business development positions in the U.S.
and Europe with Macro 4, a publicly traded systems management and
document archiving software provide
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