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Electronic Discovery

Delaware Supreme Court Affirms $7 Million Sanction for Discovery Misconduct: eDiscovery Case Law

In Shawe v. Elting, Case No. 487, 2016 (Supreme Court of Delaware, Feb. 13, 2017), the Delaware Supreme Court found that the Court of Chancery followed the correct legal standards and made no errors of law in its sanctions award of over $7 million against the appellant, agreeing with the lower court that his behavior was “unusually deplorable”.

Case Background

The plaintiff appealed an order of the Court of Chancery sanctioning him for misconduct throughout litigation with his current business partner and former romantic partner, where, after an evidentiary hearing, the Court of Chancery found that the plaintiff committed several violations, including:

  • Breaking into the defendant’s office, having the President of the company’s forensic technology business image her hard drive, concealing the activities with a write blocker, and replacing the computer to cover his tracks (several times over a two year period);
  • Remote accessing the defendant’s computer at least 44 times on 29 different occasions, gaining access to 19,000 emails, including 12,000 privileged communications between the defendant and her attorney;
  • Hiring another third party to break into the defendant’s office, take pictures, and remove hard copies of documents;
  • Claiming (after the suit was filed) that his niece dropped his phone in a cup of soda and he ultimately threw it away because he found it in a drawer with rat droppings;
  • Deleting nearly 19,000 files from his laptop, which was discovered because his computer had made volume shadow copies and his own expert discovered it;
  • Lying about his activities in his discovery responses and at his deposition, as well as giving false trial testimony and submitting a false affidavit during post-trial briefing.

The court also found that the plaintiff’s improper conduct impeded the administration of justice, unduly complicated the proceedings, and caused the court to make false factual findings. The Court of Chancery ordered the plaintiff to pay 100% of the fees the defendant incurred in connection with bringing the motion for sanctions, and 33% of the fees the defendant incurred litigating the merits of the case, awarding the defendant a total of $7,103,755 in fees and expenses.

On appeal, the plaintiff argued that the Court of Chancery erred in three respects: (1) by finding that he acted in bad faith when he deleted the files from his laptop and failed to safeguard his cell phone; (2) for failing to afford him criminal due process protections before sanctioning him for “perjury”; and (3) by awarding the defendant an excessive fee.

Judge’s Ruling

With regard to intent, the Court noted that the plaintiff/appellant “deleted 41,000 files from his laptop in December 2014 in the face of two litigation hold notices, one of which he issued, and an expedited discovery order that permitted Elting to conduct forensic discovery of Shawe’s laptop.”  Even though most of those files were recovered due to the laptop’s volume shadow copy system, the Court ruled that “does not negate his illicit intent” and also found that the “Court of Chancery was well within its discretion to sanction Shawe for his litigation misconduct” for throwing out his cell phone.

With regard to the “perjury” sanction, the Court stated: “While Shawe’s conduct may have constituted perjury, the court did not charge or convict him of perjury. Rather, the court imposed a civil sanction against him for his repeated lies under oath in interrogatory responses, at deposition, at trial, and in a post-trial affidavit to cover up what he had done. Shawe’s falsehoods wasted the court’s time, needlessly complicated and expanded the proceedings, and caused the court to find erroneous facts in its Merits Opinion. The Court of Chancery thus acted well within its discretion to sanction him for lying during the litigation.”

With regard to the claim that the defendant was awarded an excessive fee, the Court noted that the “Court of Chancery has broad discretion in fixing the amount of attorneys’ fees to be awarded” and “[a]bsent a clear abuse of discretion”, declined to reverse the award.

As a result, the Court affirmed the award, stating: “After a careful review of the record, we find that the Court of Chancery followed the correct legal standards and made no errors of law in its sanctions ruling. Shawe’s behavior was ‘unusually deplorable,’ and thus the Court of Chancery acted well within its discretion by sanctioning him for his bad faith conduct.”

So, what do you think?  Did the actions merit such a stiff sanction?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Lawyer’s Pants Literally Catch on Fire and Alexa to “Testify”: eDiscovery Trends

OK, this first story isn’t exactly an eDiscovery story, but it’s too good to pass up…

Here’s a question for you: Would you believe what a lawyer was telling you during closing arguments if his pants were, literally, on fire?

According to this story from the Miami Herald, this actually happened on Wednesday as Miami defense lawyer Stephen Gutierrez began his closing arguments in front of a jury — in an arson case.

Gutierrez, who was arguing that his client’s car spontaneously combusted and was not intentionally set on fire (hmmm…), had been fiddling in his pocket as he was about to address jurors when smoke began billowing out his right pocket, witnesses told the Miami Herald.

Gutierrez rushed out of the Miami courtroom, leaving spectators stunned. After jurors were ushered out, Gutierrez returned unharmed, with a singed pocket, and insisted it wasn’t a staged defense demonstration gone wrong, instead blaming a faulty battery in an e-cigarette, observers said.

Miami-Dade police and prosecutors are now investigating the episode. Officers seized several frayed e-cigarette batteries as evidence.  Miami-Dade Circuit Judge Michael Hanzman, in the coming days, could decide to hold Gutierrez in contempt of court.

Despite his own demonstration of spontaneous combustion, Gutierrez’s client, Claudy Charles, was convicted of second-degree arson.

Now, on to the eDiscovery story…

Those who remember last year’s battle between Apple and the Justice Department over the Judge’s order for Apple to give investigators access to encrypted data on the iPhone used by one of the San Bernardino shooters may also remember that the Justice Department asked the court to vacate its order requiring Apple to assist when an unnamed third party was able to access the iPhone.  Here’s another battle that was shaping up over access to data on a device that has ended shortly after it began.

According to Legaltech News (Amazon, Avoiding First Amendment Clash, Drops Objections to Echo Warrant, written by Ben Hancock), Amazon Inc. has agreed to hand over recordings from an “Echo” device that was in the home of a murder suspect in Arkansas, after initially resisting doing so on First Amendment grounds.

In a stipulation filed Monday in the Circuit Court of Benton County, Arkansas, Amazon’s attorneys at Davis Wright Tremaine wrote that defendant James Bates had consented to the production of the recordings from his Echo, and that its motion to quash a warrant seeking the data was now moot.

A hearing on the motion had been set for Wednesday. Bates’s attorney, Kathleen Zellner (most notable for her work in wrongful conviction advocacy and current representation of Steven Avery), said in a tweet Tuesday morning: “We agreed to release recordings-my client James Bates is innocent.”

Amazon’s fight against the warrant seeking data from Bates’ Echo had been closely watched by legal experts as a test of the limits of privacy protections for data gathered by connected devices in consumers’ homes. I guess we’ll have to save that first battle over privacy rights by Echo owners for another case.

Having an Echo in our home and hearing Alexa often say “I didn’t get that” when we’re in normal conversation and not making an Echo request, I can only imagine how much data there is, or how long it’s retained.  Cases like these will continue to illustrate the amount of ESI that IoT devices may hold.

So, what do you think?  Should individuals have privacy rights to the data on their IoT devices, like the Amazon Echo?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Spoliation of Truck Evidence Precludes Plaintiffs’ Use of That Evidence “As a Sword”: eDiscovery Case Law

In Below v. Yokohama Tire Corp., No. 15-cv-529 (W.D. Wisc. Feb. 27, 2017), Wisconsin District Judge William M. Conley, deciding on several pre-trial motions, granted (to an extent) the defendants’ motion for relief due to spoliation of evidence for failing to preserve the truck involved in a crash, stating that “defendants persuasively argue that the absence of this evidence should at minimum preclude plaintiffs from using it as a sword, even if defendants cannot use it as a shield.”

Case Background

In this product liability case related to a truck crash due to an alleged defective tire produced by the defendants that left the plaintiff severely injured, the defendants contended that the plaintiff’s pickup truck was destroyed at a salvage yard before plaintiffs filed this lawsuit.  The defendants argued that destruction of the truck hampered their defense because they were unable to evaluate, among other things, the suspension and steering systems, the seatbelt, the electronic data recorder and the other three tires.  Asserting that the plaintiffs or their “agents” sold the plaintiff’s pickup truck to a salvage yard with the knowledge that it would be destroyed after inspecting it, taking photographs and preserving the failed tire, defendants moved for a spoliation instruction.  Because of the plaintiffs’ actions, as well as receipt of $22,000 in insurance proceeds from the sale of the truck to the plaintiffs, the defendants argued that the plaintiffs’ bad faith could be inferred.

The plaintiffs asserted that the salvage yard agreed to the request from an investigator (retained by plaintiffs’ counsel) to preserve the truck in October 2013 (about a month and a half after the accident). In May of 2014, another of its investigators (Tom Malone) followed-up with the salvage yard to ask them to continue to preserve the truck and to notify him about any storage charges. Despite these efforts, plaintiffs’ counsel later “discovered” in the fall of 2015 that the truck had been destroyed on October 23, 2014.

Judge’s Ruling

Judge Conley noted that “A spoliation instruction is only obtainable if the proponent shows an intentional act or bad faith by the party in possession of the destroyed evidence.”

With regard to the plaintiffs’ failure to preserve all but the allegedly defective tire from the truck, Judge Conley stated: “Left unexplained is how plaintiffs ended up with the single, allegedly defective tire without preserving the other three; why other steps were not taken to preserve similar evidence, including possible electronic evidence that must be preserved under Fed. R. Civ. P. 37(e); and perhaps most important, why plaintiffs waited another, two full years after the accident without notifying Yokohama of the availability of this piece of key evidence, despite knowing that it was the focus of plaintiffs’ liability claims within months of the accident itself. These questions are all the more troubling because plaintiffs were represented by a sophisticated personal injury law firm, who know full well of their duty to maintain evidence relevant to likely litigation, to provide notice of a possible claim, and notice of ‘the existence of evidence relevant to that claim.’…Plus, Malone’s letter to the salvage yard presents many more questions than it answers, as to timing and whether any agreement ever existed with the salvage yard.”

As a result, Judge Conley ruled, as follows: “Based on this record, plaintiffs’ counsel certainly should have taken additional steps to ensure that the truck (or at least potentially key evidence) was preserved, as well as notified likely defendants timely of the opportunity to inspect it. The failure to do so falls somewhere between negligence and gross negligence, but perhaps short of bad faith or intentional conduct requiring an adverse inference instruction. Even so, defendants persuasively argue that the absence of this evidence should at minimum preclude plaintiffs from using it as a sword, even if defendants cannot use it as a shield. Therefore, the defendants motion is GRANTED to the extent that (1) defendants may explore how information from an inspection of Below’s truck could have affected the experts’ opinions at trial; and (2) plaintiffs may not argue that defendants or their experts failed to explore or prove something if prevented from doing so by plaintiffs’ negligence in preserving evidence. Defendants’ motion is otherwise RESERVED pending a further proffer and argument at the final pretrial conference, including defendants request for a spoliation instruction.”

So, what do you think?  Did the judge go far enough in addressing the spoliation of truck evidence?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

What are the Current Trends in eDiscovery? Catch this Webinar to Find Out: eDiscovery Trends

A lot is happening in eDiscovery these days and it’s harder than ever to keep up.  I have no choice to keep up with current eDiscovery trends – I write a daily blog, so I have to continue to find new topics to write about.  Thankfully, you don’t have to do that – you can attend a one hour webcast later this month for a recap of recent key eDiscovery trends and case law to stay current with today’s trends in eDiscovery, information governance and cybersecurity.

On March 30 at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast Key eDiscovery Trends and Case Law for 2017.  This one hour webcast will cover key events, trends, and developments that occurred over the course of last year (or so) and how they impact those in the eDiscovery community.  Examples of trends being covered include:

  • Evolution of eDiscovery Technology
  • Privacy Trends in the US and Internationally
  • Key Trends in Cybersecurity and Data Breaches
  • Continued Evolution of Artificial Intelligence in the Legal Space
  • What Happens Every Minute on the Internet
  • Proliferation of Rules Regarding Attorney Technical Competence
  • Important Cases in Technology Assisted Review
  • Key 2015 Federal Rules Changes and How They Impacted Case Law

I’ll be presenting the webcast with Julia Romero Peter, Esq., General Counsel and VP of Sales at CloudNine and we will condense over a year’s worth of key stories and trends down to a one hour presentation.  When I conducted this presentation recently at the February meeting of Houston Association of Litigation Support Managers, it was called “insightful and thought provoking”.

To register for the webcast, click here.  I write a daily blog and keep abreast of current eDiscovery trends to make it easier for you to keep up with those same trends – now, here’s an opportunity to do so in an hour.  Hope you can attend!

So, what do you think?  Are you up to date in the latest trends in eDiscovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Judge Peck Objects to Defendant’s Form of Objections: eDiscovery Case Law

In Fischer v. Forrest, Nos. 14 Civ. 1304 (PAE) (AJP), 14 Civ. 1307 (PAE) (AJP) (S.D.N.Y. Feb. 28, 2017), New York Magistrate Judge Andrew J. Peck ordered the defendants “to revise their Responses to comply with the Rules”, specifically Rule 34(b)(2)(B) and Rule 34(b)(2)(C), amended in December 2015 requiring objections to be stated with specificity and directing that an objection must state whether any responsive materials are being withheld on the basis of that objection.

Judge Peck wasted no time getting to the point in his ruling, stating:

“It is time, once again, to issue a discovery wake-up call to the Bar in this District: the Federal Rules of Civil Procedure were amended effective December 1, 2015, and one change that affects the daily work of every litigator is to Rule 34. Specifically (and I use that term advisedly), responses to discovery requests must:

  • State grounds for objections with specificity;
  • An objection must state whether any responsive materials are being withheld on the basis of that objection; and
  • Specify the time for production and, if a rolling production, when production will begin and when it will be concluded.

Most lawyers who have not changed their ‘form file’ violate one or more (and often all three) of these changes.”

In these related cases asserting claims for, among other things, copyright and trademark violations, the defendants’ amended Rule 34 Responses contained (according to Judge Peck) “17 ‘general objections,’ including General Objections No. I stating that ‘Defendant objects to the requests to the extent that they call for the disclosure of information that is not relevant to the subject matter of this litigation, nor likely to lead to the discovery of relevant, admissible evidence.’”

Judge Peck proceeded to “count the ways” that the defendants had violated the Rules:

“First, incorporating all of the General Objections into each response violates Rule 34(b)(2)(B)’s specificity requirement as well as Rule 34(b)(2)(C)’s requirement to indicate whether any responsive materials are withheld on the basis of an objection. General objections should rarely be used after December 1, 2015 unless each such objection applies to each document request (e.g., objecting to produce privileged material).”

“Second, General Objection I objected on the basis of non-relevance to the ‘subject matter of this litigation.’…The December 1, 2015 amendment to Rule 26(b)(1) limits discovery to material ‘relevant to any party’s claim or defense…’ Discovery about ‘subject matter’ no longer is permitted. General Objection I also objects that the discovery is not ‘likely to lead to the discovery of relevant, admissible evidence.’ The 2015 amendments deleted that language from Rule 26(b)(1), and lawyers need to remove it from their jargon…”

“Third, the responses to requests 1-2 stating that the requests are ‘overly broad and unduly burdensome’ is meaningless boilerplate. Why is it burdensome? How is it overly broad? This language tells the Court nothing. Indeed, even before the December 1, 2015 rules amendments, judicial decisions criticized such boilerplate objections…”

“Finally, the responses do not indicate when documents and ESI that defendants are producing will be produced.”

As a result, Judge Peck ordered the defendants “to revise their Responses to comply with the Rules”, stating:

“The December 1, 2015 amendments to the Federal Rules of Civil Procedure are now 15 months old. It is time for all counsel to learn the now-current Rules and update their ‘form’ files. From now on in cases before this Court, any discovery response that does not comply with Rule 34’s requirement to state objections with specificity (and to clearly indicate whether responsive material is being withheld on the basis of objection) will be deemed a waiver of all objections (except as to privilege).”

So, what do you think?  Do you still encounter boilerplate objections in discovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Your “Mashup” of eDiscovery Market Estimates is Even Earlier This Year: eDiscovery Trends

We look forward to the eDiscovery Market Size Mashup that Rob Robinson compiles and presents on his Complex Discovery site each year.  Each of the first three years that we covered it, the Mashup was released in July – with estimates for 2012 to 2017, for 2013 to 2018 and 2014-2019 (in two parts).  Last year, the Mashup was released early, at the end of April for 2015 to 2020.  This year, the Mashup is even earlier: Rob has released his worldwide eDiscovery software overview for 2016 to 2021 now!

Taken from a combination of public market sizing estimations* as shared in leading electronic discovery publications, posts, and discussions, the following eDiscovery Market Size Mashup** shares general market sizing estimates for the software and services area of the electronic discovery market for the years between 2016 and 2021.

Here are some highlights (based on the estimated from the compiled sources):

  • The eDiscovery Software and Services market is expected to grow an estimated 15.31% Compound Annual Growth Rate (CAGR) per year from 2016 to 2021 from $7.997 billion to $16.304 billion per year. Services will comprise approximately 69.9% of the market and software will comprise approximately 30.1% by 2021.
  • The eDiscovery Software market is expected to grow at an estimated 16.61% CAGR per year from $2.279 billion in 2016 to $4.915 billion in 2021. Software currently comprises 28.5% of the market and, by 2021, 74% of the eDiscovery software market is expected to be “off-premise” – which includes cloud-based and other Software-as-a-Service (SaaS)/Platform-as-a-Service (PaaS)/Infrastructure-as-a-Service (IaaS) solutions.
  • The eDiscovery Services market is expected to grow at an estimated 14.78% CAGR per year from 2016 to 2021 from $5.717 billion to $11.389 billion per year. The breakdown of the services market by 2021 is expected to be as follows: 67% review, 19% processing and 14% collection (basically unchanged from last year with review down a point and collection up a point).

Growth rates are up after being down the past two years, with the overall, software and services markets estimated to grow at two percent faster than the estimates from the last two years.

Here are the sources that Rob states were used in compiling the “mashup” (including his own, how clever!):

  • Annual eDiscovery Market Size Mashups – 2012 – 2017, ComplexDiscovery, March 4, 2017.
  • eDiscovery Business Confidence Surveys – Running Listing. ComplexDiscovery. February 28, 2017.
  • Zion Market Research. “eDiscovery Market for Government, Regulatory Agencies, Enterprises, and Law Firms.” November 23, 2016.
  • Markets and Markets. “E-Discovery Market by Solution, Service, Deployment Type, and Vertical – Global Forecast to 2021.” November 2016.
  • Future Market Insights (FMI). “eDiscovery Market Analysis – Global Industry Analysis and Opportunity Assessment.” July 5, 2016.
  • “Worldwide eDiscovery Software Market Forecast, 2016-2020: Back to Basics.” Angela Gelnaw. June 30, 2016.
  • Gartner, Inc. “Market Guide for E-Discovery Solutions.” Jie Zhang. June 30, 2016.
  • S. Department of Commerce, International Trade Administration. “2016 Top Markets Report – Cloud Computing.” April 14, 2016.
  • “Worldwide eDiscovery Services Forecast 2014-2019.” Sean Pike, Angela Gelnaw. December 2015.
  • Gartner, Inc. “Critical Capabilities for E-Discovery Software.” Jie Zhang, Garth Landers. October 6, 2015.
  • Transparency Market Research. “eDiscovery Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014-2022.” July 6, 2015
  • Markets and Markets. “E-Discovery Market By Solution, Deployment, Industry, & Region – Global Forecast to 2020.” July 2015.
  • Global Industry Analysts, Inc. “eDiscovery (Software and Services) Global Strategic Business Report.” May 28, 2015.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Jie Zhang, Garth Landers. May 18, 2015.
  • The Radicati Group. “eDiscovery Market, 2014-2018.” Sara Radicati. December 3, 2014.
  • Transparency Market Research. “eDiscovery Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2014-2020).” June 2014.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Jie Zhang, Debra Logan, Garth Landers. June 19, 2014.
  • “Worldwide eDiscovery Software 2014-2018 Forecast.” Sean Pike. May 2014.
  • The Radicati Group. “eDiscovery Market, 2013-2017.” Sara Radicati. August 2013.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Debra Logan, Alan Dayley, Sheila Childs. June 10, 2013.
  • The Radicati Group. “eDiscovery Market, 2012-2016.” Sara Radicati, Todd Yamasaki. October 2012.
  • Transparency Market Research. “World e-Discovery Software & Service Market Study.” August 2012.
  • Rand Institute For Civil Justice. “Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery.” Nicolas Pace and Laura Zakaras. April 2012.
  • “MarketScape: Worldwide Standalone Early Case Assessment Applications Vendor Analysis.” Vivian Tero. September 19, 2011.
  • Industry Observer Estimations (Multiple Observers)

So, what do you think?  Do you think the eDiscovery software and services markets are on the rise?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

New Survey Says 75 Percent of Respondents Unfamiliar with China’s New Cybersecurity Law: eDiscovery Trends

Are you familiar with it?

According to a survey conducted by Consilio and released earlier this week, 75 percent of legal technology professionals responding to the survey indicated that they are not familiar with China’s new Cybersecurity Law, which was passed by the Standing Committee of the National People’s Congress, China’s top legislature, in November 2016.  The new law is set to go into effect on June 1.

China’s new Cybersecurity Law will require foreign companies conducting business in the country to localize their data within mainland China which may contain sensitive privacy data or state secrets. Organizations that do not adhere to this provision will face potential financial penalties, including the possible loss of their ability to conduct business in mainland China. Individuals can face civil and criminal penalties, up to and including imprisonment and the death penalty for particularly egregious cases.

For more on China’s Cybersecurity Law, you can read Understanding China’s Cybersecurity Law, by Chris Mirasola on the LawFare blog here.  An unofficial translation of the law can be found on the China Law Translate site here.

Consilio’s survey of 118 legal technology professionals, from in-house law departments, law firms and government affiliated entities, was conducted at the Legalweek | Legaltech® New York 2017 conference held January 31 – February 2.  Some key findings of the survey include:

  • 75 percent of legal technology professionals cited that they are not familiar with China’s new Cybersecurity Law;
  • Only 14 percent of respondents indicated that they are “very concerned” about the new law;
  • Yet, 57 percent of respondents indicated having at least one legal matter that touched China within the last two years (i.e. internal or government investigations, litigation, M&A, etc.), with 27 percent indicating that they knew of at least ten Chinese legal matters that their organizations were involved in during that time.

“China is now the world’s second largest economy, and for global corporations and those that aspire to be global, it is critical for them to have a full understanding of the data requirements and regulatory landscape of that region,” said Dan Whitaker, Managing Director of Consilio’s China operations, headquartered in Shanghai. “Since 2012, cyber walls have been going up in multiple regions around the world, and as countries continue to create new regulations, organizations must continually educate themselves on the quickly evolving nuances of data privacy laws in every jurisdiction, specifically as it relates to the ability to move data in and out of the countries in question.”

In addition to China’s new Cybersecurity Law, when polled about other international compliance laws their organizations are most concerned about, respondents identified the Foreign Corrupt Practices Act, or FCPA as the most concerning (40 percent), with the General Data Protection Regulation, or GDPR (22 percent) and the UK Bribery Act (8 percent) as other regulations respondents are concerned about.

Consilio has prepared a summary infographic to illustrate the results, which can be found here.

So, what do you think?  Are you familiar with China’s new Cybersecurity Law?  Are you concerned about it?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Craig Ball of Craig D. Ball, P.C., Part 2: eDiscovery Trends

This is the sixth (and final) of the 2017 Legaltech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY (aka Legalweek) this year to get their observations regarding trends at the show and generally within the eDiscovery industry.

Today’s thought leader is Craig Ball.  A frequent court appointed special master in electronic evidence, Craig is a prolific contributor to continuing legal and professional education programs throughout the United States, having delivered almost 2,000 presentations and papers.  Craig’s articles on forensic technology and electronic discovery frequently appear in the national media and he teaches E-Discovery and Digital Evidence at the University of Texas School of Law.  He currently blogs on eDiscovery topics at ballinyourcourt.com.

Craig provided so much good information that we decided to publish his interview in two parts.  The first half of his interview was published yesterday.

Speaking of the rise in discourse you mentioned, we’ve seen a recent trend with regard to an emphasis on technology competence for attorneys and we’re up to 26 states that have adopted some sort of technology competence requirement, with Florida being the first state that has required technology CLE for their attorneys.  Do you think the increased emphasis on technology competence will (finally) change the general lack of understanding of technology within the legal profession?

I think those are significant developments. Still, as we take two steps forward, we take one step back. The best example: although we’ve moved forward with the institutionalization of and impetus for competence, the greatest “stick” that we have, sanctions, have become increasingly harder to obtain for eDiscovery malfeasance.  At this point, you must demonstrate an almost murderous intent to get significant sanctions. And, while I’m not troubled by the structure of 37(e) – serious sanctions have always come behind serious misconduct and not mere error – proportionality and the diminished ability to obtain sanctions have sapped the impetus to do more than the minimum.  Quality is still not part of the conversation.

Abuses are still rife.  Wasteful practices are everywhere.  And we still have a very long way to go before we get to genuine competency.  The question is, will three hours of CLE in Florida that you can satisfy in almost any way, without any testing or other check on competency, make a difference?  We could do much more if we decided that competency is something we really want and demand of lawyers.  We still make it optional and easy to avoid.  I admire what California did with their simplified idea of “Learn it, get someone who knows it, or get out”.  It’s one thing to establish that as a series of aspirations and goals – like the nine things you need to know in the California model – but it’s quite another thing to put “teeth” into those obligations.  When it comes to competency, we don’t demand enough of lawyers after the Bar exam.

Too, we close ranks when it comes to malpractice stemming from technical incompetency.  Judges are understandably loath to criticize their friends and colleagues.  Making a pronouncement against a lawyer’s competency or integrity from the bench carries a “long tail” in terms of its consequences.  So judges that otherwise might take lawyers to task feel constrained not to do so except in the most severe cases.  When you only punish the most severe cases of incompetence and malfeasance, you create a false impression that those are the only kinds of cases out there.

When you only punish the most severe cases, any lawyer who might otherwise think “I’d better learn this” will look at those horrific cases and say “I’m never going to do that”.  The problem is that they may do something that is just as bad – they may do it with less intent, less venal motivation – but the outcome will be the same.  If I shoot someone because I don’t know which way to point a gun or I shoot someone because I want to kill them, the law distinguishes between those two, but the mourning family may not – the result is tragedy.  We can forgive one instance of incompetence, but, after a while, if you’re just remaining incompetent and doing things the way you’ve always done them, that’s callous malfeasance.  Every dog gets one bite, but not two, three or four. At some point you must put the dog down and punish the owner.

One of the things that coming to this event makes me think about is what a shame it is that there’s only one of these a year that requires people to come to New York City in the winter.  I long for the days when Legaltech was all over the country and there were many flavors of legal technology conferences that you could attend. I think we are at an inflection point where people have come around to recognizing that they need to learn some of these things, but the resources to do so remain sparse.  There are too few significant events with strong, fresh, engaging components.

For example, the frustration we have in Texas is that if we build it, they don’t always come.  We need something in the marketplace and in the management of the Bars and in the educational process to train lawyers that makes this “keeping up” obligation something that we embrace with greater enthusiasm.  The camaraderie, community, sharing of ideas – a lot of that has turned into YouTube videos.  The “confabs” are almost all gone.  You’ve got these gigantic trade shows of constituencies, but at the local level, there’s very little.

How does a practitioner who can’t justify spending three or four days in New York during the winter have a chance to look at all the wares?  You can’t go to Amazon.com and search for law office management or eDiscovery software with the same ability that you can shop for a vacuum.  That’s a shame. We still communicate info about eDiscovery solutions by word-of-mouth, by hype and so forth.

Take your company, CloudNine.  I know your company to be very competent with a skilled group of people and competitive pricing.  But, how do you break out?  How do you get yourself heard in the marketplace?  There are a lot of great vendors out there perceived as regional or second-tier for no reason except that there is so much noise out there and there is so little ability to compare apples to apples in an objective way.  Options are drowned out by marketing budgets.  Is being good and efficient and cost-effective enough to make you the winner in the marketplace?  I think there is a sense among vendors that it’s not, it’s a gamed system that is all about the marketing money and not about the quality of the offering.

With that in mind and with consolidation within the eDiscovery provider community increasing, where do you see the market heading for eDiscovery providers?

As much as I want to share some optimistic observations (and I do see some things about which to be optimistic), I am deeply concerned about what the coming year is going to bring about for a number of vendors.  We’ve seen consolidation.  It may be bad for the consumers and it may be bad for trade shows as we have discussed.  But, I think it’s about to change and the loss of players that’s coming is going to be in many ways as severe as 2008.  We are seeing enormous pricing pressure and razor-thin margins.  I see efforts being made to generate the appearance of good business and good sales; but when the numbers are crunched and the sales persons take their commissions, a lot of these “good sales” will be unprofitable and unsustainable.

I think we’re going to see the collapse of several operations in 2017.  They can’t defy gravity much longer.  When the numbers start coming in and the flattening is obvious, the VC money gets spooked and people start scrambling to get their investments out, I think we’re going to have another significant shuttering reduction in the number of offerings out there. I’m hoping that will be ameliorated somewhat by startups and so forth, but I have to share with you my candid concern.  It may not all happen in 2017, it may wait until 2018 in the kind of uncertainty and optimism that comes in with regime change.  All of the stunning things that are happening right now may engender lots of litigation.  But, it’s hard to know whether this is good or bad for lawyers and whether it’s good or bad for litigation support.  Many providers may hang on for most of 2017, but it may be the “Wile E Coyote” approach – sooner or later, you look down and realize you’ve run off the cliff.  I’m sorry to be a Cassandra on that topic, but the numbers speak for themselves.  People are bidding on jobs at margins that are unsustainable without either massive cuts in personnel or shortcuts in quality that will entail massive headaches.

We’ve never fully adjusted to the commoditization of eDiscovery services. There are still too many people who remember the old pricing.  There are a lot of things – such as automation and the Cloud – which mean that the heyday of multi-thousand per gigabyte pricing is gone and never coming back.  We cannot build our market around those margins.   It’s like the oil industry – you can build for $100 a barrel oil, but you’d better realize you’re going to see $40 a barrel oil for a lot longer than you may expect.  I think the eDiscovery industry was built for $100 a barrel, but we are selling e-discovery at $25 a barrel.  At least that’s what the margins will look like when it  shakes out.

In addition to what we’ve already discussed, what are you working on that you’d like our readers to know about?

I’ve just relocated on a more permanent basis to New Orleans, Louisiana.  I will always be a Texan, but my body will be in New Orleans.  My goal for 2017 is a personal one: to cut back on the travel.  I’ve been doing 50 to 70 programs around the country and around the world now for many, many years.  I’m like George Clooney’s character in “Up in the Air” – when people ask me where I live, I want to say, “here, I live in an airplane.”  I’m tired of that.  It meant that I was disengaged from community, from friends and family, and I am tired of that. So, I’m going to be more selective in in what I do.  I’m saying “no” to engagements that may make me money, but not bring much joy.  I’m saying “no” to speaking engagements that, in ordinary circumstances, I would have routinely accepted.  Instead, I’m asking myself what I really like to do, where I really want to go, who I really want to speak with and where I really can make the most positive difference.  So, I’m hoping that this year instead of participating in 70 events, it will be more like 25.

But, I plan to use that disengagement to reengage in the areas where I think I can do some good.  Writing more. Celebrating more.  I’m one of those people you meet in life where you say “there’s a guy who needs to drink more”.  And, it’s not really about enjoying drinking, it’s that drinking is part of a social life that I have always made secondary to professional commitments.  I’m fortunate to now live in a city where I have great friends and there is always something enjoyable to do.  I don’t want to be the fool that says “I wish I could do that, but I have this thing to finish for work”.  Life is short and I feel the ticking clock that is held for me by my friends like Browning Marean and Bill Butterfield, who are saying “Craig , live a little”.  No one lays on their deathbed and says “Why didn’t I spend more time at the office?”  Our generation needs to mentor now.  We need to equip younger professionals with a sound moral and ethical compass and the skills with which to succeed within those moral and ethical boundaries.  That’s our true legacy – our children and others we can set on a path to make a positive difference.

Thanks, Craig, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Today’s the Day for the Best Practices in Keyword Searching Webcast!: eDiscovery Best Practices

Today at 12:00pm CT (1:00pm ET, 10:00 am PT), CloudNine will be conducting a webcast titled Best Practices for eDiscovery Searching via the BrightTALK network.  There’s still time to register for it, if you haven’t already!

Our webcast session will cover goals for effective searching, what to consider prior to collecting ESI that will be subject to search, mechanisms for culling prior to searching, mechanisms for improving search recall and precision, challenges to effective searching and recommended best practices for searching and validating your search results to ensure that they are effective.

We will cover many of the concepts we’ve covered on this blog over the years, showing you how not to get wild with wildcards, how to cull out email signature logos from review, how to expand the recall of searches to capture additional hits that might be missed due to misspellings or poor quality text, how to effectively conduct name searches to maximize hit retrieval and how to account for noise words in your search results.

We will also use external sites to help us check our proposed wildcard terms for variations to ensure that our term isn’t too broad (or too narrow) and we will use other sites to help us determine how large of a sample size we need for testing our search result set and even generate our sample set for us.

And, finally, we will look at relevant case law regarding disputes over search protocol and results.

Karen DeSouza, the Director of Review Services at CloudNine, and I will conduct this hour long webcast to discuss best practices for effective searching that may just help you decide whether keyword search still has a place in your eDiscovery workflow.  Click here to register for today’s webinar.  Hope to see you then!

With all of the hype surrounding Technology Assisted Review, many wonder if keyword search still has a place in eDiscovery.  Perhaps it does, if it’s conducted properly.  Find out today the best practices for eDiscovery searching using keywords and decide for yourself!

So, what do you think?  Is keyword searching dead?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.