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eDiscoveryDaily

eDiscovery Case Law: KPMG Denied in Request for “Proportionality Test” to Preservation

In Pippins v. KPMG LLP, No. 11 Civ. 0377 (CM)(JLC), (S.D.N.Y. Oct. 7, 2011), defendant’s request for a protective order allowing it to maintain only a random sample of 100 hard drives from 2,500 laptops or to require plaintiffs to bear the cost of maintaining 2,500 hard drives was denied.

It was not shown that information on the hard drives was duplicative, and it was too early in the litigation to know whether the cost of maintaining the hard drives was proportional to plaintiffs’ potential recovery. In an action concerning whether accountants should be considered exempt employees under the Fair Labor Standards Act, defendant sought an order allowing it to preserve only a random sample of 100 hard drives from laptops of former and departing accountant employees. Defendant already was preserving almost 2,500 such hard drives at a cost of $1.5 million. As an alternative, defendant sought an order requiring plaintiffs to bear the cost of maintaining more than 100 of the hard drives.

Plaintiffs were willing to use sampling to lessen the number of hard drives but contended that a random sample of the hard drives would not be a meaningful sample. Plaintiffs also contended that keyword searching of the random samples suggested by defendant was outmoded and not likely to cull out information sought by plaintiffs, including work product and hours worked by defendant’s accountant associates. Plaintiffs sought an order requiring production of five of the hard drives for inspection so that the parties could negotiate a resolution to the hard drive preservation issue. The court denied defendant’s motion for a protective order and directed defendant to preserve hard drives of members of the New York class that plaintiffs sought to represent.

While the court considered defendant’s preservation efforts “comprehensive,” it did not appear that other information being preserved duplicated information on the hard drives. Also, the cost of preserving the hard drives could be substantial but it was too early to know whether that cost would be proportional to the value of the litigation. The court added that courts in the Southern District of New York “have cautioned against the application of a proportionality test as it relates to preservation.” While the court would not order defendant to provide plaintiffs with five sample hard drives, it encouraged the parties to seek agreement on sampling pending a ruling on class certification and a lifting of the stay of discovery in the action.

So, what do you think?  Do proportionality and preservation mix?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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

eDiscovery Rewind: Eleven for 11-11-11
 

Since today is one of only 12 days this century where the month, day and year are the same two-digit numbers (not to mention the biggest day for “craps” players to hit Las Vegas since July 7, 2007!), it seems an appropriate time to look back at some of our recent topics.  So, in case you missed them, here are eleven of our recent posts that cover topics that hopefully make eDiscovery less of a “gamble” for you!

eDiscovery Best Practices: Testing Your Search Using Sampling: On April 1, we talked about how to determine an appropriate sample size to test your search results as well as the items NOT retrieved by the search, using a site that provides a sample size calculator. On April 4, we talked about how to make sure the sample set is randomly selected. In this post, we’ll walk through an example of how you can test and refine a search using sampling.

eDiscovery Best Practices: Your ESI Collection May Be Larger Than You Think: Here’s a sample scenario: You identify custodians relevant to the case and collect files from each. Roughly 100 gigabytes (GB) of Microsoft Outlook email PST files and loose “efiles” is collected in total from the custodians. You identify a vendor to process the files to load into a review tool, so that you can perform first pass review and, eventually, linear review and produce the files to opposing counsel. After processing, the vendor sends you a bill – and they’ve charged you to process over 200 GB!! What happened?!?

eDiscovery Trends: Why Predictive Coding is a Hot Topic: Last month, we considered a recent article about the use of predictive coding in litigation by Judge Andrew Peck, United States magistrate judge for the Southern District of New York. The piece has prompted a lot of discussion in the profession. While most of the analysis centered on how much lawyers can rely on predictive coding technology in litigation, there were some deeper musings as well.

eDiscovery Best Practices: Does Anybody Really Know What Time It Is?: Does anybody really know what time it is? Does anybody really care? OK, it’s an old song by Chicago (back then, they were known as the Chicago Transit Authority). But, the question of what time it really is has a significant effect on how eDiscovery is handled.

eDiscovery Best Practices: Message Thread Review Saves Costs and Improves Consistency: Insanity is doing the same thing over and over again and expecting a different result. But, in ESI review, it can be even worse when you get a different result. Most email messages are part of a larger discussion, which could be just between two parties, or include a number of parties in the discussion. To review each email in the discussion thread would result in much of the same information being reviewed over and over again. Instead, message thread analysis pulls those messages together and enables them to be reviewed as an entire discussion.

eDiscovery Best Practices: When Collecting, Image is Not Always Everything: There was a commercial in the early 1990s for Canon cameras in which tennis player Andre Agassi uttered the quote that would haunt him for most of his early career – “Image is everything.” When it comes to eDiscovery preservation and collection, there are times when “Image is everything”, as in a forensic “image” of the media is necessary to preserve all potentially responsive ESI. However, forensic imaging of media is usually not necessary for Discovery purposes.

eDiscovery Trends: If You Use Auto-Delete, Know When to Turn It Off: Federal Rule of Civil Procedure 37(f), adopted in 2006, is known as the “safe harbor” rule. While it’s not always clear to what extent “safe harbor” protection extends, one case from a few years ago, Disability Rights Council of Greater Washington v. Washington Metrop. Trans. Auth., D.D.C. June 2007, seemed to indicate where it does NOT extend – auto-deletion of emails.

eDiscovery Best Practices: Checking for Malware is the First Step to eDiscovery Processing: A little over a month ago, I noted that we hadn’t missed a (business) day yet in publishing a post for the blog. That streak almost came to an end back in May. As I often do in the early mornings before getting ready for work, I spent some time searching for articles to read and identifying potential blog topics and found a link on a site related to “New Federal Rules”. Curious, I clicked on it and…up popped a pop-up window from our virus checking software (AVG Anti-Virus, or so I thought) that the site had found a file containing a “trojan horse” program. The odd thing about the pop-up window is that there was no “Fix” button to fix the trojan horse. So, I chose the best available option to move it to the vault. Then, all hell broke loose.

eDiscovery Trends: An Insufficient Password Will Thwart Even The Most Secure Site: Several months ago, we talked about how most litigators have come to accept that Software-as-a-Service (SaaS) systems are secure. However, according to a recent study by the Ponemon Institute, the chance of any business being hacked in the next 12 months is a “statistical certainty”. No matter how secure a system is, whether it’s local to your office or stored in the “cloud”, an insufficient password that can be easily guessed can allow hackers to get in and steal your data.

eDiscovery Trends: Social Media Lessons Learned Through Football: The NFL Football season began back in September with the kick-off game pitting the last two Super Bowl winners – the New Orleans Saints and the Green Bay Packers – against each other to start the season. An incident associated with my team – the Houston Texans – recently illustrated the issues associated with employees’ use of social media sites, which are being faced by every organization these days and can have eDiscovery impact as social media content has been ruled discoverable in many cases across the country.

eDiscovery Strategy: "Command" Model of eDiscovery Must Make Way for Collaboration: In her article "E-Discovery 'Command' Culture Must Collapse" (via Law Technology News), Monica Bay discusses the old “command” style of eDiscovery, with a senior partner leading his “troops” like General George Patton – a model that summit speakers agree is "doomed to failure" – and reports on the findings put forward by judges and litigators that the time has come for true collaboration.

So, what do you think?  Did you learn something from one of these topics?  If so, which one?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscoveryDaily would like to thank all veterans and the men and women serving in our armed forces for the sacrifices you make for our country.  Thanks to all of you and your families and have a happy and safe Veterans Day!

Marketing a Litigation Support / eDiscovery Department within a Law Firm: Closing Thoughts
 

In the past few weeks we’ve talked about various marketing techniques and mechanisms that — in my experience — work well in a law firm.  In closing, I have just a few additional thoughts I’d like to share with you on the subject.

  • Whether you realize it or not, everyone in the department is involved in marketing.  Your clients’ interactions with department members form their impression of your services.  Everyone in the department, therefore, is contributing in a positive, neutral, or negative way to marketing.  Work with the members of your department to ensure that everyone is contributing in a positive way.  Make sure that everyone is projecting a spirit of cooperation and an eagerness to help.
  • You want your clients to see you as a peer.  You don’t want to be viewed as “the help”.  You want the relationship to be one of partnership.  How do you make this happen?  First, practice the techniques we covered for building good relationships and for providing suburb customer service.  Next, be confident in what you know and what you can do.  You are the expert.  You want your clients to see you as such.  And last, project the right image.  Look and act like you belong in your client’s environment.  
  • Always remember that everyone you talk to in the firm is a potential customer or has links to a potential customer.  So every interaction you have should be viewed as a marketing opportunity.
  • Make this a goal:  Everyone in the firm will know who you are, what you do, how you can solve their problems, and how they can reach you.

I hope you enjoyed this series on marketing litigation support services within a law firm.  Let us know what you think.  And be sure to let us know if you’d like to know more about a particular topic.

Marketing a Litigation Support / eDiscovery Department within a Law Firm: Keeping Existing Customers, Part 2
 

In the last post in this series, we began talking about marketing techniques for keeping the customers you have.  The first point we covered was continuously reminding your customers of the services that you offer.  The second thing you need to do is to look for new ways to help the customers that you have.

You have a significant advantage here… you know the litigation process, you know how attorneys work, and you know what they need.  In short, you know what’s coming.  Be proactive.  Anticipate what your clients will need and let them know how you can help.  And if their needs are outside the scope of what you do, determine if that work should and could be within the scope of your offerings.  You may uncover ways to expand your department’s services.

The last – and probably most effective – way to keep existing customers is to provide suburb customer service.  All the time.  Without fail.  You need to treat your clients well; you need to get them what they need, when they need it; and you need to make it very easy and painless for your clients to work with you.  Establish customer service guidelines for your staff and establish top priorities for the department.  At a minimum, the department’s priorities should include meeting deadlines, delivering high quality work, and effectively communicating with clients.

Customer service guidelines include things like making sure that it’s easy for clients to reach you and being responsive to phone calls and email.  You need to make sure your staff is trained in dealing with clients.  For example, make sure that everyone on your staff knows the right way to respond if client is unhappy about something.

Tomorrow, we’ll conclude this blog series on Marketing a Litigation Support / eDiscovery Department within a Law Firm.  Let us know if you’ve got any questions or comments.  And be sure to let us know if you’d like to know more about a particular topic.

eDiscovery Best Practices: Cluster Documents for More Effective Review
 

With document review estimated to up to 80% of the total cost of the eDiscovery process and the amount of data in the world growing at an exponential rate, it’s no wonder that many firms are turning to technology to make the review process more efficient.  Whether using sophisticated searching capabilities of early case assessment (ECA) tools such as FirstPass®, powered by Venio FPR™ to filter collections more effectively or predictive coding techniques (as discussed in these two recent blog posts) to make the coding process more efficient, technology is playing an important role in saving review costs.  And, of course, review tools that manage the review process make review more efficient (like OnDemand®), simply by delivering documents efficiently and tracking review progress.

How the documents are organized for review can also make a big difference in the efficiency of review, not only saving costs, but also improving accuracy by assigning similar documents to the same reviewer.  This process of organizing documents with similar content into “clusters” (also known as “concepts”) helps each reviewer make quicker review decisions (if a single reviewer looks at one document to determine responsiveness and the next few documents are duplicates or mere variations of that first document, he or she can quickly “tag” most of those variations in the same manner or identify the duplicates).  It also promotes consistency by enabling the same reviewer to review all similar documents in a cluster (for example, you don’t get one reviewer marking a document as privileged while another reviewer fails to mark a copy of the that same document as such, leading to inconsistencies and potential inadvertent disclosures).  Reviewers are human and do make mistakes.

Clustering software such as Hot Neuron’s Clustify™ examines the text in your documents, determines which documents are related to each other, and groups them into clusters.  Clustering organizes the documents according to the structure that arises naturally, without preconceptions or query terms.  It labels each cluster with a set of keywords, providing a quick overview of the cluster.  It also identifies a “representative document” that can be used as a proxy for the cluster.

Examples of types of documents that can be organized into clusters:

  • Email Message Threads: Each message in the thread contains the conversation up to that point, so the ability to group those messages into a cluster enables the reviewer to quickly identify the email(s) containing the entire conversation, categorize those and possibly dismiss the rest as duplicative (if so instructed).
  • Document Versions: As “drafts” of documents are prepared, the content of each draft is similar to the previous version, so a review decision made on one version could be quickly applied to the rest of the versions.
  • Routine Reports: Sometimes, periodic reports are generated that may or may not be responsive – grouping those reports together in a cluster can enable a single reviewer to make that determination and quickly apply it to all documents in the cluster.
  • Published Documents: Have you ever published a file to Adobe PDF format?  Many of you have.  What you end up with is an exact copy of the original file (from Word, Excel or other application) in content, but different in format – hence, these documents won’t be identified as “dupes” based on a HASH value.  Clustering puts those documents together in a group so that the dupes can still be quickly identified and addressed.

Within the parameters of a review tool which manages the review process and delivers documents quickly and effectively for review, organizing documents into clusters can speed decision making during review, saving considerable time and review costs.

So, what do you think?  Have you used software to organize documents into clusters or concepts for more effective review?  Please share any comments you might have or if you’d like to know more about a particular topic.

Full disclosure: I work for CloudNine Discovery, which provides SaaS-based eDiscovery review applications FirstPass® (for early case assessment) and OnDemand® (for linear review and production).  CloudNine Discovery has an alliance with Hot Neuron and uses Clustify™ software to provide conceptual clustering and near-duplicate identification services for its clients.

eDiscovery Trends: Madoff Ponzi Scheme Case Documents May Be Turned Over to eData Rooms and Special Masters
 

The trustee responsible for coordinating the recovery of assets and data involved in Bernard L. (“Bernie”) Madoff's $65 billion Ponzi fraud investigation is presently seeking to secure special masters and create an "eData room" to ensure that the enormous volume of data accumulated during this worldwide investigation is collected and retained.  For more on the increasing use of special masters to facilitate eDiscovery cases, click here).

Almost three years after Madoff's arrest in December 2008, the massive fraud investigation has now spawned roughly 900 lawsuits worldwide involving 16,000 parties in 30 countries. The number of files and documents related to Madoff's Ponzi scheme is equally astronomical – and as perhaps the most significant fraud case of the decade – or even the century – these documents and lawsuits contain information vital as precedent for future criminal cases.

As a result, trustee Irving Picard has determined to collect all of the ESI related to these cases in a single eData room with the help of special masters that would be appointed by US bankruptcy Judge Burton Lifland.  eData rooms are web-based review platforms that can support centralized access of the ESI in question for all approved parties.

As the use of technology becomes more of a key issue in fraud cases, discovery of ESI associated with that technology is becoming ever more important in the practice of law, making a historic case like Madoff's vital as precedent. In November 2010, Picard created the first "e-discovery room", but the new "eData room" would be a much bigger project, containing all the ESI related in any way to Madoff's Ponzi scheme and making it available through a web-based platform for access and review. This new eData room, proposed in January 2011, would be limited to roughly 100,000 potentially responsive documents from 77 parties associated with a related case in which the defendant (J. Ezra Merkin) demanded production of every subpoenaed document in the initial bankruptcy proceeding as well as depositions in other proceedings.

The prospect of this eData room necessitates a complex series of discovery requests and confidentiality agreements, but Irving has already secured the tacit approval of all but 15 of the 16,000 parties, (large financial institutions, including UBS, Bank of America, Merrill Lynch International, Bank of New York Mellon and Sterling Equities, the investment group chaired by New York Mets owner Fred Wilpon) who objected to the prospect of pooling confidential documents where they could be accessed by thousands of parties including their business competitors. To address those concerns, Picard submitted a revised proposed order in September to exclude certain types of documents as confidential and give producing parties 60 days to object to the inclusion of “highly sensitive commercial information” in the eData room.  It will be interesting to see if the revisions pave the way for full acceptance to implement the eData room.

So, what do you think? Are eData rooms going to become commonplace in complex cases involving eDiscovery? Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Trends: Special Masters Increasingly Used to Facilitate Complex eDiscovery Cases
 

Retired Washington DC superior court judge Richard Levie was recently appointed as a special master to oversee the eDiscovery demands of an ongoing high profile acquisition case. In the wake of several Department of Justice (DOJ) eDiscovery battles with Honeywell International in a recent high profile case, the DOJ and AT&T have jointly requested (and US district Judge Ellen Segal Huvelle appointed) Levie as special master to resolve any matters involving electronic evidence in the case focused on the $39 billion proposed acquisition of T-Mobile by AT&T.

The case is expected to benefit from the assistance of a special master because of the rapid pace as which it is expected to move forward: the case was filed on August 31 and the trial date is in February 2012 – very quickly for a case of this magnitude (and expected large data population) to begin in trial.

Due to the very fast-paced discovery schedule, the judge has set strict limits on the requests and submissions that both parties can make to the special master. Motions must be under 750 words and briefs 250 words or less – sheer torture for many attorneys(!).  Motions relating to discovery can only be submitted after a "substantive meet and confer" conference has been conducted between the parties.

This type of scenario is becoming more common in today's legal environment.  With as many as 123,000 pending civil suits in the DOJ caseload, it is becoming increasingly common for overloaded attorneys and judges to rely on the oversight provided by qualified special masters. These special masters are charged with acting as liaisons and moderators to quickly resolve discovery disputes over ESI, and to provide guidance that judges usually follow closely in making their decisions.

In the present case regarding the AT&T proposed merger with T-Mobile, special master Levie is expected to aid both parties in agreeing on eDiscovery terms, meeting compliance requirements and in finding resolution for any disputes.

So, what do you think? Have you been involved in a case where a special master coordinated eDiscovery procedures?  Did that speed up the discovery process? Please share any comments you might have or if you'd like to know more about a particular topic.

Marketing a Litigation Support / eDiscovery Department within a Law Firm: Keep Existing Customers, Part 1
 

Yesterday, we concluded our discussion about getting new customers.  Today, we begin discussing how to keep the customers you already have.

Getting repeat business from your clients is essential.  If every client only used your services once, at some point you’d be out of business.  You need to focus, therefore, on getting repeat business.  There are three things you should be doing: 

  1. Continuously remind your customers of the services that you offer.
  2. Look for new ways to help the customers that you have.
  3. Focus on providing premier customer service. An attorney will not use your services a second time if he or she was not happy with the service you provided the first time!

Let’s start with reminding your customers about the services that you offer.  Don’t let them forget that you are available to help them.  Many of the mechanisms we covered in the posts on Getting New Customers apply here too.  Here are a few suggestions:

  1. Make sure that all of the clients for whom you’ve done work are on your newsletter distribution list.
  2. Invite them to presentations that you’ve got scheduled.
  3. Contact them when you see they have a new case and ask how you can help.
  4. If you see an article that is relevant to a client, forward it with a personal note.
  5. Pick up the phone and call an attorney for whom you’ve done good work and ask how they are doing, what they are working on, and if you can help.
  6. Be visible.  Be everywhere.  Attend every firm event that you can.  Eat lunch in the firm dining room.  Walk around and schmooze.  Of all the points on this list, this one is the most important.  Everyone is familiar with the saying “out of sight, out of mind”.  Don’t be either!

Next week we’ll continue talking about ways to keep the customers that you have.  In the meantime, we’d really like your input on how you’ve approached marketing in your firm.  How much marketing do you do, and what’s worked well for you?  Please share any comments you might have or let us know if you’d like to know more about a particular topic.

Marketing a Litigation Support / eDiscovery Department within a Law Firm: Getting New Customers, Part 5
 

Last week, we started talking about techniques and mechanisms for one-on-one marketing to individual attorneys and litigation teams in your firm.  Here are a few more tips:

  • Be enthusiastic about what you do.  It’s contagious and it will get others excited about your offerings.
  • Be prepared for objections.  If you’ve been working with attorneys for a while, you know what objections might be raised to using your services and products.  Be prepared to address them.  Some of the repeated objections I’ve encountered are:
    • “My client won’t pay for this”:  Be prepared with cost information and cost analyses and comparisons.  You know that what you do fosters efficiency and saves money in the long run, so have the information you need to demonstrate that.
    • “Only an attorney can do this”:  Be prepared to describe a process that will make them comfortable and ensure them that substantive decisions and answers remain in the hands of attorneys.  Have testimonials from other attorneys in the firm that rave about how well it worked for them
    • “I tried that once and it was a disaster”: You may face some attorneys who have had a prior bad experience with the services you offer.  The costs may have been out of hand, deadlines may have been missed, or a database may have not been useful.  Be prepared to discuss the mechanisms that are built into your approach for controlling costs and meeting deadlines.  Be prepared to discuss the planning and design steps that you take to ensure that a database will be useful.  Be prepared to discuss the approach you take to monitoring service providers to ensure that they live up to the commitments they make.
  • Provide references.  When you’ve done good work for someone, ask if they will serve as a reference, and have references on hand for potential new clients.
  • Make “Getting that first sale” your primary objective.  Don’t try to sell them the whole ball of wax.  Identify what they need right now and focus on that.  Focus on solving an immediate problem.  If you get your foot in the door with one task and you do a good job, getting them to buy off on future work will be easier.  And, don’t give them too many options unless that’s necessary.  You are the expert and you know the best options.  If you give them too many options, the decision will be harder to make.

So far, we’ve covered several mechanisms and techniques getting new customers.  Tomorrow we’ll start talking about techniques and mechanisms for keeping your existing customers. 

In the meantime, we’d really like your input on how you’ve approached marketing in your firm.  How much marketing do you do, and what’s worked well for you?  Please share any comments you might have or let us know if you’d like to know more about a particular topic.

eDiscovery Trends: SEC Orders Its Staff to Cease Document Destruction Pending Policy Review
 

The U.S. Securities and Exchange Commission ("SEC") recently ordered all of its enforcement staff attorneys to cease the destruction of documents from investigative files after criticism that the SEC wrongfully destroyed thousands of documents associated with high profile enforcement matters, including investigations into Wall Street banks.  The National Archives and Records Administration (NARA) and the SEC's inspector general are currently examining whether the organization's document destruction policy requires revision. This cease order comes in the wake of information provided by a SEC whistleblower, indicating that the SEC wrongfully destroyed thousands of documents from preliminary investigations referred to as “MUIs” (Matters Under Inquiry).

  • In the past, the SEC would destroy documents pertaining to “MUIs” that had been closed, including cases that never developed into formal investigations as well as those that had been decided.
  • Some of these destroyed documents pertained, either directly or peripherally, to what would later become high profile cases. Among them were documents relevant to the Madoff Ponzi scheme and several Wall Street bank fraud investigations.
  • Although private companies routinely destroy documents and files that are closed or no longer in use, the SEC is subject to federal laws and regulations that require federal agencies to retain more records than a private firm. The SEC has been criticized by members of Congress of violating these laws and avoiding its legal compliance burden, especially where destroyed documents could have proven crucial in later legal cases.
  • As a result, the present controversy has forced the SEC to work with NARA to reconsider its document retention policies and to suspend, for now, destruction of files and documents. Parties are still arguing whether a requirement to retain all documentation distracts resources from the SEC's main objective of preventing, discovering and penalizing those involved in securities fraud.

So, what do you think? Has the SEC failed in a serious way to meet compliance standards, or is this controversy placing undue emphasis on documents that are unlikely to ever be needed? Please share any comments you might have or if you'd like to know more about a particular topic.