IN FOCUS MONDAY, APRIL 25, 2005 LITIGATION MANAGEMENT Retention policies are invaluable A sound policy makes documents easier to find, and the execution of a collection strategy simpler. By Martha J. Dawson SPECIAL TO THE NATIONAL LAW JOURNAL MOST organizations develop their document management and retention policies for business purposes, and not specifically with litigation discovery concerns in mind, these policies can be invaluable in controlling the cost and complexity of discovery. An effective document management and retention policy can help curb the tendency of employees to retain significant volumes of electronic documents when there is no business or legal reason to do so—thereby reducing the volume of electronic documents to be searched in response to an investigation or litigation. It also creates a system that can enable an organization more quickly to identify and isolate potentially relevant documents when faced with the possibility of litigation. When a company has a sound retention policy for electronic information, documents are easier to find, and developing and executing a sound document-collection strategy is less complicated. The need for a cross-discipline approach to electronic discovery is well recognized. In the fifth of her oft-cited Zubulake decisions, Judge Shira Scheindlin of the Southern District of New York noted that, in order to fulfill its legal obligation to ensure that all sources of potentially relevant client information are identified and preserved, “counsel must become fully familiar with her client’s document retention policies, as well as the client’s data retention architecture.” Zubulake v. UBS Warburg, 2004 WL 1620866, at *8 (S.D.N.Y. July 20, 2004). The Sedona Conference’s working group on electronic document management, retention and protection has also adopted a cross-discipline approach in developing a companion piece to “The Sedona Principles: Best Practices WHILE Martha J. Dawson is a partner at Seattle’s Preston Gates & Ellis. She leads the firm’s document analysis technology group and is involved in offering comments to the Federal Rules Advisory Committee regarding electronic data discovery. Recommendations & Principles for Addressing Electronic Document Production” (Sedona Conference Working Group Series, January 2004), www.thesedonaconference.org/miscFiles/SedonaPriniciples200401. The group responsible for this piece is not limited to lawyers, but includes representatives from computer forensics companies, electronic discovery vendors and the Association of Information Management Professionals (now known as ARMA International). In addition to ARMA’s participation in the Sedona Conference, the organization’s president submitted live testimony on the group’s behalf at one of the public hearings on the proposed amendments to the Federal Rules of Civil Procedure addressing e-discovery issues. ARMA recommended that the proposed amendments encourage good records-management programs, so that organizations can respond to discovery requests promptly and without resorting to heroic efforts. The organization also advocated that parties be required to disclose their record-retention policies and practices, and that records subject to document-retention policies and procedures be assumed to be accessible for purposes of discovery. Finally, ARMA recommended that parties not be allowed to frustrate electronic discovery by following poor record-keeping practices, or by failing to follow their own retention policies. Whether the Federal Rules Advisory Committee will incorporate ARMA’s suggestions remains to be seen. Regardless, as the crossdiscipline approach to electronic discovery gains further acceptance, parties should expect document management and retention policies and practices to receive increased attention from the courts. Under this increased scrutiny, organizations that want to keep control of their documents and manage their costs, both in the regular course of business and in the context of litigation discovery, should pay close attention to the document-retention policies and practices they have in place. A sound retention policy Establishing a sound document manage- ment and retention policy enables an organization to define the practices its employees should follow when handling their documents and information. The first key component of a sound document-retention policy is that it provide reasonable, easy-to-apply guidelines for identifying the various business records that should be retained—with a corresponding understanding that documents that do not fall within the defined categories generally should not be retained. Categories of documents that should be maintained include documents whose retention is required by law or regulation, or are helpful or necessary for the day-today operation of the business. The policy should also provide guidance as to the appropriate methods and locations for retaining information. This guidance may involve the designation of a centralized location for storing certain records, and assigning a specific individual or individuals responsibility for maintaining certain records. Another key element is the preservation of documents relevant to litigation. The retention policy should alert employees to the potential need to retain documents that are relevant to anticipated or ongoing litigation, even though those documents would not otherwise qualify for retention under the document-management policy. The policy should also alert employees that more specific instructions—detailing the information that must be preserved, and the methods for doing so—will be issued if and when litigation is anticipated or filed. Concerns over the potential cost of electronic discovery have greatly increased the importance and emphasis on policies regarding e-mail retention and the treatment of backup tapes. Both sources of documents may account for a staggering amount of material potentially subject to discovery if litigation arises. Accordingly, retention policies should limit the retention of e-mails that are not true business records—e.g., by limiting how long messages may be retained, or the quantity that may be retained. If employees are expected or allowed to archive e-mail messages, the procedure and location for doing so should be laid out in the THE NATIONAL LAW JOURNAL document-retention policy. The policy should establish backup tapes as a means of disaster recovery only, and set an appropriate schedule for recycling backup tapes to ensure they are retained only as long as is necessary to provide backup in the case of a system failure. Backup tapes should never become a de facto archive; rather, the archive should be represented by documents properly retained pursuant to the guidelines established in the retention policy. Another critical element of a sound document-retention policy is the inclusion of a specific plan for implementation and execution. In order to implement, monitor and enforce compliance with a policy, an organization has to commit resources to educate employees about the policy and provide them with the time, resources and incentives to both organize their existing information, and to follow the policy going forward. An organization’s failure to follow its formal document-retention policies can have devastating consequences in litigation if potentially relevant documents are destroyed or unavailable as a result. So how does a management and retention policy assist the discovery process? The first steps of the preservation and collection process involve identifying what information is relevant, determining who has that information and identifying where it is located. Well-crafted retention policies can dramatically lower the volume of information that has been retained and, accordingly, the volume that may need to be identified, preserved and collected. Just as importantly, by establishing protocols for how and where information is retained, policies encourage employees to save only items of substance, and to save them in a deliberate, consistent manner. The result is a company of informed users who are better positioned to provide answers to key questions, and whose documents and information are likely to be stored in discrete locations. Much of the high-level information needed for planning the preservation and collection process may actually be spelled out in the retention policy itself. The policy should include information about the organization’s computer systems, including the hardware and software used, how files are saved, what e-mail system is used, what backup protocols are in place, whether the organization possesses any archival or legacy information, the organization’s document-retention policies and its data-retention architecture. Discussions with information technology (IT) personnel can be used to fill in the details of the organization’s electronic information systems. Detailed information regarding the records and record-retention habits of individual custodians can be obtained by having the key players involved in the matters surrounding the litigation complete an interview or question- MONDAY, APRIL 25, 2005 naire. The goal is to determine key aspects of their personal retention practices, for example, the software programs they use; where they save documents, whether at the office or away; and if and where they archive e-mail. To ensure preservation measures are adequate, it is also critical to ask key players about any servers or file shares, over which they do not have personal responsibility, but on which they or others may save documents. Litigation hold notices Hand-in-hand with identifying and locating the relevant information is ensuring it is preserved. Litigation hold notices detailing the information to be preserved—both on an individual and systemwide level—must be issued as soon as possible after litigation is anticipated. Litigation hold notices should be issued to the key individuals who may have documents They are issued very soon after litigation is anticipated. or information relevant to the litigation. The notice should include information regarding the general nature of the litigation, and the subjects and time frame of potential relevance in the litigation. The notice should also explain that the recipient has been identified as someone who may have documents or information relevant to matters at issue in the litigation, instruct the recipient that he or she must not delete or destroy any documents relevant to these matters until notified otherwise and provide specific instructions regarding any special steps that the recipient should take to preserve relevant information. Steps must also be taken to preserve relevant material on a systemwide level—i.e., to protect relevant information that is stored in a location not under the control of an individual. Such locations may be under the control of a specific person, or the organization’s IT department. Determining who is the custodian is simpler when the organization has a document management and retention policy that spells out and assigns that responsibility to a specific individual. If no one person is in control of a location, it may be necessary to enlist the help of the IT department to understand any applicable records-retention policies and backup protocols in place for that location, working with them to ensure that existing data is preserved in accordance with the discovery obligations. The next steps are to determine what subset of the information being preserved must be collected for review and to execute a protocol for collecting this information. Deciding what is to be collected will depend on a variety of factors, including the relative volumes and accessibility of the various sources of information, whether the information is unique or duplicative, and the expected cost of collecting, reviewing and producing the material. Organizations following a comprehensive document management and retention policy are much better situated to gather this key information quickly and efficiently than those that do not follow an established policy. Discovery costs tend to rise in proportion to the volume of materials collected. Document management and retention policies can create a huge cost-saving advantage for companies because they reduce the volume of information that is retained to begin with, and because they allow for a much more focused collection effort. When employees have adopted an organized document-collection protocol, the information gathered from custodian interviews and questionnaires can be used to quickly zero in on the specific locations where relevant information is stored. This focused approach has the added benefit of limiting disruption to the organization. The implementation and maintenance of a well-crafted document management and retention program provides an organization a head start on discovery by putting it in control of its documents. Not only will an organization that follows a defined program have fewer documents to deal with when responding to discovery requests, but the information and documents it does have will tend to be better organized. An organization accustomed to treating its records in a disciplined and thoughtful manner will be well-situated to successfully identify, locate, preserve and collect relevant information once litigation arises. NLJ This article is reprinted with permission from the April 25, 2005 edition of THE NATIONAL LAW JOURNAL. © 2005 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited. For information, contact American Lawyer Media, Reprint Department at 800-888-8300 x6111. #005-05-05-0003 www.prestongates.com