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Electronic Discovery and Content Management Discussions and Issues

Timothy Noonanis a proven leader with extensive experience providing business solutions for Fortune 500 clients. His experience in enterprise-wide data issues includes compliance, discovery, and records management.

Law Firm Strategy

ChessChessChess

 

 

Every day we hear about attorney laying offs, mergers, and the competition for global legal clients. While our world is getting smaller our law firms are becoming more global. This new global environment is leading to changes in the traditional law firm. What does a medium to large size firm do to plan for this brave new world? Many firms have already diversified their legal offerings to enlarge the net to catch more and larger fish. Firms have added such practices as:  Intellectual Property, Corporate, Litigation, and Regulations. However, man does not live on fish alone.

 The law firm must step out of the box and leverage its role as a trusted advisor, not just in legal matters, but business matters as a whole.  Some areas that law firms can start leveraging their trusted roles in the following ways:

      • Risk Management
      • Compliance
      • Records Management
      • Information Governance
      • Information Security
      • Electronic Discovery

Many firms have experience in these areas and companies are anxious to have their concerns addressed with a team that is knowledgeable of law and legal ramifications. There are hurdles to overcome due to how law firms are organized, but the rewards would be great. Harken back to when audit firms stepped out of their comfort zone and diversified their businesses.  Firms such as Ernst & Young, Arthur Anderson, and Deloitte became wildly successful.

Most young attorneys are savvy about electronically stored information and privacy concerns. This is how the millennials grew up. The internet and social media have been around since they were able to talk. They are perfectly suited for this transition. Here is an opportunity to break the mold and pave your own road. Law firms are better situated than the audit firms that have ruled this space for the last twenty-five years.

I strongly believe this is the best opportunity for the growth and expansion of the mid sized firm.   There are several examples of firms that have ventured in this area and are succeeding. Therefore I encourage large to mid-size firms to look beyond their legal offerings and embrace this brave new world of the diversified portfolio by expanding into non-legal business.

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Guest — Tim Noonan
A recent article (4/21/2014) from Chicago Crain's Business discusses how Seyfarth Shaw LLP are building out a consulting offering ... Read More
Wednesday, 23 April 2014 14:55
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Is Content Management Dead?

DeadECM-txt

Having the ability to capture as much data as you want is a very powerful capability. Never since the advent of computers has this been possible. Now with disparate data stores, such as thumb drives, laptops, large USB drives, and cloud-based drives it is difficult to put any sorts of controls on this type of data. So why try?

Taxonomies and search capabilities allows quick access to data without the cumbersome controls that traditional Enterprise Content Management (ECM) packages require. Therefore if your data is out there in the open, it can be indexed and search. Isn’t that what you want?

Well…actually no.

Unless you are the US government, you will be responsible for your data and therefore will need to put controls on the data to manage it. You need to determine when data can be expunged from the system based on controls. This will leave you less exposed to litigation. When litigation comes your way, and you know it will, you will need to put data on legal hold. You will need to determine that the data has not been tampered with, otherwise spoliation.

The legal argument for content management is just one of many good reasons for controlling your data. Compliance, audits, brand protection, information security, etc. are just a few more. Yet not many companies have come to the realization of the importance of controlled data. The process is long and arduous. Yet, you will be able to sleep at night. Who knows, perhaps if there is control on your data, the data can be leveraged to your other divisions. Content management also can prevent the formulation of tribal knowledge and allow seamless knowledge transfer. So embrace content management and look at it as more than just a good idea, but a technology that can propel your business. When everyone is using the controlled content, then you will be all efficiently swim in the same direction.

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6 Degrees of Discoverability

6Discovery

Six Degrees of Discoverability

Degree

 

Type of Evidence

 

Generic Description

 

Chances for Discovery

 

Standard

 

1*

Real Evidence & Defined Items of Documentary Evidence

The “raw” or “operative” facts, including the actual physical parts or components of the incident, accident or controversy; the so-called “res gestae elements.”

Count on it!

Near absolute- Absent some privilege

Information is discoverable immediately

2*

 

Witnesses [Both Lay and Expert] Who May Testify

Information on all witnesses who may testify at trial, lay and Expert. Expert witnesses are required to provide extensive information about themselves and their opinions.

Witnesses are discoverable. It’s only a matter of “when” not “if.”

Information must be disclosed by pre-trial conference.

3*

Ordinary Work Product

Investigative reports; witness statements; information and data generated in anticipation of litigation.

Chances are more likely than most people would anticipate

Info NOT discoverable absent: [i] Substantial Need + [ii] Undue Hardship

4*

 

Advisory Assistance

Information developed or acquired by experts, assistants or attorneys (who will not testify), in anticipation of litigation; demonstrative evidence that won’t be used at trial.

Unlikely

Info NOT discoverable absent Exceptional circumstances

5*

 

Opinion Work Product

Personal notes, research, opinions, theories, strategic memos and attorney advice.

Unlikely absent crime-fraud exception

Info NOT discoverable absent Extraordinary circumstances

6

 

Unwritten Work Product

Information contained in the memory of an attorney.

Highly Unlikely

Info NOT discoverable

*Within Degrees 1 through 5 fall a host of privileges with varying degrees of strength

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Marshalling Your Team

Team

When confronted with a discovery request or a reasonably good chance of a discover request forthcoming, it is time to circle the wagons. What is needed is to assemble a cross-functional crack team as quickly as possible. Many clients don’t include team members until it is absolutely necessary. I cannot impress upon them enough to think about this prior to any legal matter and build your team. Just like any emergency, preparation is key. Every member needs to know their role.

Typical Team roles:      

eDiscovery Project Manager: a Project Manager who will facilitate tight timeframes and keep costs and schedules in mind.

Collection Manager: Assist the IT staff technical expert on gathering data given the volume and location of potentially relevant data. Assist with the production of data due to the variety, rarity, and complexity of current and legacy software applications. With the Subject Matter Expert and the IT manager, the Collection Manager will analyze backup tapes to support an argument that the tapes should not be subject to discovery, or try to limit the number of backup tapes based on analysis. The Collection Manager assists in copying of relevant data in order not to interfere with business operations.

Subject Matter Expert: technical expert on the industry and request area. Manage foreign privacy and data transfer issues, testify as to the defensibility of the collection and processing procedures.

Paralegal: Liaison with counsel and scribe to all proceedings.

Outside Counsel: The Outside Counsel has oversight of the preservation and collection. This includes assisting in the creation of the Questionnaire (See earlier post for further details on the Questionnaire)..

In-house Counsel: help identify personnel and facilitate with other departments keeping in mind the ongoing business requirements. Identify privileged information, such as names and emails of attorneys involved. Assist in developing searches to identify relevant data collection candidates as well as process and review the relevancy of data.

Communication Manager: Since this is a sensitive matter and will need to occur in haste, thorough and explicit communication is imperative.

IT manager: Provide IT topology, system architecture, historical and current practices for computer systems and policies for deleting e-mail messages, location of data regarding the litigation, location of backup and number of backup media with potential information. Assist in preservation policies and suspension of routine destruction of potentially relevant data. Data Mapping excise should have already been in place, if that needs to be done quickly. Often clients will include Data Mapping when on-boarding a server into the enterprise.

Directory of Data Security: Identify security issues such as online review tools and issues revolving around BYOD (Bring Your Own Device).

Records Manager: Understanding document Life Cycle procedures and policies. The Records Manager role will be significant in an on-going basis. This role may also determine types of tools that will help alleviate documents out in the wild and bring them in from the cold by the introduction of a records management system coupled with content management. A system in place to manage data will limit exposure to litigation by the lawful disposition of records.

Judge Scheindlin noted in Zubulake V, that the burden is placed upon both outside and in-house counsel for collections and preservation. Therefore getting your team in place reduces risk, reduces cost, and saves time.

This is a process that will most likely occur again, reviewing the process by conducting a post-mortem is time well spent. This will help determine what can be done to make this process easier, more cost effective, and less stressful.

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When Black Swans Return

I was brought into a client site to help develop with Disaster Recovery for a content management system. My clients offices where in New York City, in lower Manhattan. The 9/11/2001 attacks prevented communications from their data center and their corporate offices. After a few days the communication channels were open and business was allowed to be conducted. 
This was considered a Black Swan type of risk and highly unlikely to reoccur. A Black Swan event as described by Nassim Nicholas Taleb is based on three criteria
  1. The event is a surprise (to the observer).
  2. The event has a major effect.
  3. After the first recorded instance of the event, it is rationalized by hindsight, as if it could have been expected; that is, the relevant data were available but unaccounted for in risk mitigation programs. The same is true for the personal perception by individuals.
The Swan reared its ugly head again in August 14th 2003 when New York City experienced a blackout. Again, the data center was unreachable. 
I was involved with the design of their enterprise content management system’s architecture. The system needed to accommodate 2.7 million workflows a day with 16 million documents. Therefore building two systems, production and backup, to manage the traffic and the workflow was a very expensive endeavor. 
The DR site chosen was in Jersey City, New Jersey, across the river from my client’s offices. Taking advantage of the close proximity of the DR site and the need for a large and powerful system, I suggested that we use the DR site in the design to process the workflows. The data would reside in NYC with failover to the New Jersey site in an active-passive configuration. We did discuss active-active, yet the costs were too much to overcome.

ECMconfig
The workflows were going to be hardest part to design. Only one thousand concurrent workflows could be processed per Application server. I created five application service processes per physical server and replicated the same configuration at the DR site. Therefore the system could accommodate six thousand concurrent workflows. As designed the system was designed for 3 million workflows over a twenty-four hour period
 
Therefore turning Black Swans white.
 
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The Questionnaire – the electronic discovery identification and preservation questionnaire

By the time you are ready for the questionnaire you have a good idea of the custodians and the data you need to preserve.  The questionnaire is time sensitive and should be vetted by the time you need to send it out. It is best to create a general questionnaire template that you can use for most cases.

The questionnaire has a dual purpose; preserve and identify data. We need to make sure that custodians have received, read and understood what is being preserved. Many clients like to use the email "confirmed delivery and read receipts" that are sometimes available with some email servers. This can be problem for several reasons.

  •  The custodian may have a delegate that receives and reads their email
  •  When sending to external email custodians or non-company email accounts a “received” noticed will be generated once the email has left the company email server – this issue occurs when sending to former employees and partners.
  •  The email can be changed from Unread to Read without actually been reviewed.

The best policy is to require the custodian to reply back and to acknowledge that the questionnaire has been received and understood. There are tools in the market place that can be used to accomplish this. Otherwise, you can follow up from non-responsive custodians.

The Questionnaire should have the following questions with an emphases on as much detail as possible:

  • Identify types of information, such as electronic and/or hardcopy files.
  • Storage media: workstations, removable drives, flash drives CD’s, DVD’s etc.
  • Types of email services. Custodians may email files to their personal accounts in order to access away from the office.
  • Files located on the network or cloud such as DropBox
  • Copies or archived email, such as PSTs.

A custodian may have more than one workstation and may have files on their home computers, therefore we need to explicitly ask. We need to make sure we capture the custodian's name, contact information, role, business unit date and signature.

Notes

  •  Be aware of the 25 interrogatory limit Rule 26(b)(2)
  •  The questionnaire can be considered a work product and therefore subjected to Work Product Doctrine protection (United States Supreme court ruling on Upjohn’s General Counsel questionnaire).
  •  Don’t forget to remind the custodians of their responsibility of preserve periodically.
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The Importance of Data Mapping

One of our large clients were presented with the following request:

Provide a detailed description of how all <Enterprise Client> computers are networked or connected to others (with a graphical representation-Map if one is available)

One of our team members approached this request in the following way

Is this a data map for litigation purposes? And if so, is it internal purposes (i.e. legal counsel using it to determine what should be put on hold) or is it to be given to the court or other side (Rule 26 info)?

In this case, the client needed to satisfy Rule 26. The rationale for data mapping is derived from several rules in the FRCP. In particular, Rule 26(a)(1)(A) directly specifies the need for a data map. Additionally, data mapping eases the burden of fulfilling other FRCP rules by streamlining the eDiscovery process. According to AIIM.org these rules include:

1.       Data map for delivery to opposing party: FRCP Rule 26(a)(1)(A) specifies that parties must provide each other with “a copy — or a description by category and location — of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses.” Additionally, information must be provided on “each individual likely to have discoverable information.”

2.       Meet & confer meeting preparation: FRCP Rule 26(f) specifies that opposing parties must meet within 99 days of the onset of litigation to discuss how eDiscovery will be handled. This includes: (a) what ESI is to be covered; (b) how ESI is stored; (c) how the information will be produced; (d) accessibility of the information; and (e) issues related to privileged ESI.

3.       Not reasonably accessible argument support: FRCP Rule 26(b)(2) allows organizations to exclude ESI from eDiscovery if it is “not reasonably accessible because of undue burden or cost.”

4.       Safe harbor and sanction avoidance: Rule 37(e) provides a safe harbor from sanctions for ESI that is “lost as a result of the routine, good-faith operation of an electronic information system.”

 

DataMapping

Summary

 Advanced data mapping can greatly help larger organizations effectively operate in the increasingly complex information governance environment that resulted from the amended FRCP. Moreover, by understanding the fundamental requirements driving data mapping, organizations can deploy a solution and develop processes that minimize costs on a case-by-case basis, decrease response times, limit potential sanctions for underproduction of ESI, and ultimately improve their litigation success over

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Business Risk Model

Business Risk Model-eDiscovery

 

Environment Risk

Environment risk arises when there are external forces that could significantly change the fundamentals that drive a company’s overall objectives and strategies and, in the extreme, put a company out of business

Competitor Risk
Major competitors or new entrants to the market take actions to establish and sustain competitive advantage over the company or even threaten its ability to survive. These actions include issuance of new products to market, improving product quality, increasing productivity and reducing costs, and reconfiguring the value chain in the eyes of the customer.

Sensitivity Risk
Sensitivity risk results when management commits the company's resources and expected cash flows from future operations to such an extent that it reduces the company's tolerance for (or ability to withstand) changes in environmental forces that are totally beyond its control

Shareholder Relations Risk
A decline in investor confidence which impairs a company's ability to efficiently raise capital. Current and prospective investors do not understand the company and its core messages and strategies. As a result, they do not have the necessary confidence in the company's potential to provide sufficient returns on their investment. The consequences can be severe -- the company will not have the same efficient access as competitors to the capital it needs to fuel its growth, execute its strategies, and generate future financial returns.

Capital Availability Risk
The company does not have efficient access to the capital it needs to fuel its growth, execute its strategies, and generate future financial returns. This can result in a competitive disadvantage if the company is highly leveraged or its major competitors have larger cash reserves, a lower cost structure, greater market share, or access to capital through strategic alliances.

Catastrophic Loss Risk
The inability to sustain operations, provide essential products and services, or recover operating costs as a result of a major disaster. The inability to recover from such events in a world class manner could damage the company’s reputation, ability to obtain capital, and investor relationships.

Sovereign/Political Risk
The risk of adverse consequences through political actions in a country in which a company has made significant investments, is dependent on a significant volume of business, or has entered into an agreement with a counterparty subject to the laws of that country

Legal Risk
The risk that a company's transactions, contractual agreements and specific strategies and activities are not enforceable under applicable law. Changes in laws and litigation claims and assessments can also result in increased competitive pressures and significantly affect a company's ability to efficiently conduct business.

Regulatory Risk
Changes in regulations and actions by national or local regulators can result in increased competitive pressures and significantly affect a company's ability to efficiently conduct business.

Industry Risk
Industry risk is the risk that the industry will lose its attractiveness due to changes in the capabilities of competitors, company's strengths and weaknesses relative to competitors, and key factors for success within a given industry.

Financial Markets Risk
Financial markets risk is defined as exposure to changes in the earnings capacity or economic value of the firm as a result of changes in financial market variables (e.g., currency rates) which affect income, expense or balance sheet values.

Yield Risk
Exposure to changes in earnings as a result of fluctuations of market factors (e.g., interest rate changes, currency fluctuations, etc.) which affect income from unhedged assets or the cost of unhedged liabilities (including executory contracts and other contingent exposures).

Price Risk
Exposure to changes in earnings or net worth as a result of price level changes.

Credit Risk
The exposure to actual loss or opportunity losses as a result of deterioration in a counterparty’s ability to honor its obligations.

Liquidity Risk
Exposure to loss resulting from the inability to convert assets (e.g., investment securities, receivables, inventories) to an equivalent cash value, or to raise unsecured funding, in a timely and cost-effective manner.

Systemic Risk
Exposure to loss as a result of a major market disruption which adversely affects all participants in that market (e.g., the inability to repatriate funds held in a foreign country due to the failure of its financial markets and/or banking system).

Legislative/Regulatory Risk
Exposure to actions by legislators and regulators which affect the market value of a financial instrument (e.g., changes in tax or accounting treatment of financial instruments).

Complexity Risk
Exposure to loss resulting from entering into complex transactions, the structure and pricing of which are not completely understood.

Process Risk

Process risk is the risk that business processes:

Are not clearly defined

Are poorly aligned with business strategies

Do not perform effectively and efficiently in satisfying customer needs

Do not add to shareholder wealth

Expose significant financial, physical and intellectual assets to unacceptable losses, risk taking, misappropriation or misuse.

Process risks consist of the following sub-categories and risk types:

Operations Risk

Operations risk is the risk that operations are inefficient and ineffective in satisfying customers and achieving the company's quality, cost and time objectives. Operations risks consist of the following:

Customer Satisfaction Risk
The company's processes do not consistently meet or exceed customer expectations because a lack of focus on the customer.

Human Resources Risk
The personnel responsible for managing and controlling an organization or a business process do not possess the requisite knowledge, skills and experience needed to ensure that critical business objectives are achieved and significant business risks are reduced to an acceptable level.

Product Development Risk
The productivity of the product development process is significantly less than more innovative competitors who are able to achieve higher productivity through a stronger customer focus, concentrating focused resources and faster cycle time.

Efficiency Risk
The process is inefficient in satisfying valid customer requirements resulting in higher than competitive costs.

Capacity Risk
· The effective productive capacity of the plant is not fully utilized or is not adequate to fulfill customer needs and demands, resulting in lost business.

Performance Gap Risk
When compared to competitors or best of class performers, there is an unfavorable performance gap because of lower quality, higher costs, or longer cycle times.

Cycle Time Risk
Elapsed time between the start and completion of a business process (or activity within a process) is too long because of redundant, unnecessary and irrelevant steps.

Sourcing Risk
The fewer the alternative sources of the energy, metals and other key commodities and raw materials used in a company's operations, the greater the risks of shortages and higher costs. These risks can significantly affect the company's capability to provide competitively priced products and services to customers at the time they are wanted.

Obsolescence/Shrinkage Risk
The risk of excess, obsolete, or lost (theft, shrinkage or spoilage) inventory and other physical assets used by or consumed in a business process, resulting in significant loss to the company or adjustments to operating results.

Compliance Risk
As a result of a flaw in design or operation or due to human error, oversight or indifference, the company's processes do not meet customer requirements the first time or do not comply with prescribed procedures and policies.

Business Interruption Risk
Business interruption can arise from accidents, weather, work stoppages and sabotage, and results in dissatisfied customers and loss of sales, profits and competitive position. Business interruption attributable to a loss of critical information systems is described as “Availability Risk” under “Information Processing/Technology Risk.”

Product/Service Failure Risk
The company's operations create risk of customers receiving faulty or nonperforming products or services. These failures usually occur as customer complaints, warranty claims, field repairs, returns, recalls, replacements, special discounts (because of product/service defects), product liability claims, and litigation. They can significantly affect a company's reputation, future sales and market share.

Environmental Risk
Environmental risks expose companies to potentially enormous liabilities. The exposure may include liability to third parties for bodily injury or property damage caused by the pollution, and liability to governments or third parties for the cost of removing pollutants plus severe punitive damages.

Health and Safety Risk
Worker health and safety risks are significant if not controlled because they expose a company to potentially significant workers' compensation liabilities. Workers' compensation laws, which vary from country to country, can result in severe financial losses if company operations do not strictly comply with them.

Trademark/Brand Name Erosion Risk
The risk that a trademark will lose its value over time to a business in building and retaining demand for its products and services. A trademark is a word, symbol or device -- or any combination of these -- that identifies a product or service and distinguishes that product or service from the products or services of competitors.

Empowerment Risk

Empowerment risk is the risk that managers and employees either do not know what to do, are not properly lead, exceed the boundaries of their defined authorities, or do not have the training, resources, or tools necessary to do their jobs. Empowerment risks consist of the following:

Leadership Risk
The risk that the people responsible for the important business processes do not or cannot provide the leadership, vision, and support necessary to help employees be effective and successful in their jobs.

Authority/Limit Risk
The risk that people either make decisions or take actions that are not within their explicit responsibility or control or fail to take responsibility for those things for which they are accountable.

Outsourcing Risk
There are two elements of outsourcing risk. First there is the risk that outside service providers (i.e., Third Party Administrators (TPAs), overseas and domestic manufacturing partners and agents) do not act within their defined limits of authority and do not perform in a manner consistent with the values, strategies and objectives of the company. Second, there is the risk that strategic business processes outsourced ultimately create competition for the outsourcing organization.

Performance Incentives Risk
Performance incentives risk occurs when managers and employees are monitored using performance measures that create incentives to act in a manner that is inconsistent with the company's business objectives, strategies, ethical standards, and prudent business practice. In these cases, managers and employees do not buy into the performance measures used by the company because they are not realistic, understandable, objectively determinable, or actionable.

The risk also occurs when performance indicators do not accurately measure the skills or characteristics that are predictive of success in a given position. Such performance measures ultimately prove to be irrelevant.

Change Readiness Risk
The people within the organization are unable to implement process and product/service improvements quickly enough to keep pace with changes in the marketplace (i.e., changes arising from competitor acts, regulatory changes, consumer demands, mergers, etc.).

Communications Risk
Communications vertically (top-down and bottom-up) or horizontally (cross-functional) within the organization are ineffective and result in messages that are inconsistent with authorized responsibilities or established measures. Information does not flow in a timely manner to the people who need it for decision-making.

Information Processing/Technology Risk

Information Processing/Technology risk is the risk that the information technologies used in the business are not efficiently and effectively supporting the current and future needs of the business, are not operating as intended, are compromising the integrity and reliability of data and information, are exposing significant assets to potential loss or misuse, or threaten the company’s ability to sustain the operation of critical business processes. Information Processing/Technology Risks include the following:

Relevance Risk
Relevance risk is the risk that information is not relevant to the purposes for which it is collected, maintained or distributed. This risk relates to the usability and timeliness of information that is either created or summarized by an application system.

Integrity Risk
This risk encompasses all of the risks associated with the authorization, completeness, and accuracy of transactions as they are entered into, processed by, summarized by and reported on by the various application systems deployed by an organization. These risks pervasively apply to each and every aspect of an application system used to support a business process and are present in multiple places and at multiple times throughout the application systems.

Access Risk
Access risk includes the risk that access to information (data or programs) will be inappropriately granted or refused. Inappropriate people may be able to access confidential information. Appropriate personnel may be denied access.

Availability Risk
The risk that information will not be available when needed. Includes risks such as loss of communications (e.g., cut cables, telephone system outage, and satellite loss), loss of basic processing capability (e.g., fire, flood, electrical outage) and operational difficulties (e.g., disk drive breakdown, operator errors). Business interruption can also arise from natural disasters, vandalism, sabotage, and accidents.

Infrastructure Risk
The risk that the organization does not have an effective information technology infrastructure (e.g., hardware, networks, software, people and processes) to effectively support the current and future needs of the business in an efficient, cost-effective and well-controlled fashion.

Integrity Risk

Integrity Risk is the risk of management fraud, employee fraud, and illegal and unauthorized acts, any or all of which could lead to reputation degradation in the marketplace or even financial loss. Integrity risks include the following:

Management Fraud Risk
Management issues misleading financial statements with intent to deceive the investing public and the external auditor or engages in bribes, kickbacks, influence payments and other schemes for the benefit of the company.

Employee Fraud Risk
Employees, customers or suppliers individually or in collusion perpetrate fraud against the company, resulting in financial loss or unauthorized use of physical, financial or information assets.

Illegal Acts Risk
Managers and employees individually or in collusion commit illegal acts, placing the company, its directors and officers at risk to the consequences of their actions.

Unauthorized Use Risk
This risk results when the company's physical and financial assets are used for unauthorized or unethical purposes, or information and proprietary assets are compromised (e.g., industrial espionage).

Reputation Risk
The risk that a company may lose customers, key employees, or its ability to compete, due to perceptions that it does not deal fairly with customers, suppliers and stakeholders, or that it does not know how to manage its business.

Financial Risk

Financial risk is the risk that cash flows and financial risks are not managed cost-effectively. Its severity depends on a number of factors which include the firm’s size, industry, financial position (e.g. public/private, leverage, free cash flow to equity, etc.), and the direction of the market as a whole. Financial risks are broken down into three categories: Price, Liquidity, and Credit.

Price risks include the following:

Interest Rate Risk
In a corporate context, interest rate risk is the potential for interest rates to deviate from their expected value. In aggregate, it includes the risk that a future spot interest rates will deviate from an expected value.

Currency Risk
Currency risk is the exposure to fluctuations in exchange rates.

Equity Risk
Equity risk is the exposure to fluctuations in the income stream from and/or value of equity ownership in an incorporated entity.

Commodity Risk
Commodity risk is the exposure to fluctuations in prices of commodity-based materials or products (e.g., gold, energy, copper, coffee).

Financial Instrument Risk
Financial market risk can vary depending upon the particular segment of the market to which the holder of a financial instrument is exposed, or the way in which the exposure is structured. These risks can arise from exposure to such things as changes in the price/yield differential between two financial markets, changes in cash flows or income as a result of option-type contracts, changes in the general level of interest rates, or exposure to an adverse change in the yields/prices available in a given market at a given moment in time.

Liquidity Risks include the following:

Cash Flow Risk
Actual losses incurred as a result of the inability to fund the operational or financial obligations of the business. In the extreme, poor liquidity management can lead to default or loss of production.

Opportunity Cost Risk
The use of funds in a manner that leads to the loss of economic value.

Concentration Risk
Exposure to loss as a result of the inability to access cash in a timely manner.

Credit Risks include the following:

Default Risk
This is the risk that a counterparty will be unable to fulfill its obligations (e.g., an entity which has taken delivery of goods or services defaults on the payment or goes into bankruptcy ).

      Concentration Risk
Exposure to excessive loss as a result of inappropriate emphasis of sales volume or revenues on a single customer, industry, or other economic segment.

Settlement Risk
This risk arises when financial counterparties effect their payments to each other at different times or in different locations. The first paying party is exposed to the risk that the later paying party will fail to perform, due to delay, system failure or default.

Collateral Risk
This is the risk that the value of an asset provided as collateral for a loan, receivable, or commitment to perform may be partially or totally lost.

Information for Decision Making Risk

Information for Decision Making risk is the risk that information used to support strategic, operational and financial decisions is not relevant or reliable. If measures have not been aligned with business strategies or are not realistic, understandable and actionable, they will not focus people on the right things and will provide incentives for decisions that are inconsistent with the strategies. If the measures and other business information used in decision making are not reliable or relevant, they either will be ignored or will drive the wrong behavior. Information for Decision Making risks include the following:

Operational

Pricing Risk
There are many forms of pricing risk. For example, the company's price may be more than customers are willing to pay or the company's pricing may not cover production costs.

Contract Commitment Risk
The company does not have information that effectively tracks contractual commitments outstanding at a point in time, so that the financial implications of decisions to enter into incremental commitments can be appropriately considered by decision makers.

Performance Measurement Risk
Process performance measures do not provide a reliable portrayal of business performance and do not accurately reflect reality (i.e., they are not reliable information about reality because they do not “tell the story” as to what is really happening within the processes of the business).

Alignment Risk
The objectives and performance measures of the company's business processes are not aligned with its overall business objectives and strategies. The objectives and measures do not focus people on the right things and lead to conflicting, uncoordinated activities.

Regulatory Reporting Risk

Reports of operating information required by regulatory agencies are incomplete, inaccurate, or untimely, exposing the company to fines, penalties and sanctions.

Financial

Budget and Planning Risk
Budgets and business plans are not realistic, based on appropriate assumptions, based on cost drivers and performance measures, accepted by key managers, or useful as a monitoring tool.

Accounting Information Risk
Financial accounting information is used to manage business processes and is not properly integrated with nonfinancial information focused on customer satisfaction, measuring quality, reducing cycle time and increasing efficiency.

Financial Reporting Evaluation Risk
Financial reports issued to existing and prospective investors and lenders include material misstatements or omit material facts, making them misleading.

Taxation Risk

Significant transactions of the company have adverse tax consequences that could have been avoided had they been structured differently.

Pension Fund Risk
Pension funds are not actuarially sound, e.g., they are insufficient to satisfy benefit obligations defined by the plan.

Investment Evaluation Risk
Management does not have sufficient financial information to make informed short-term and long-term investment decisions and link the risks accepted to the capital at risk.

Regulatory Reporting Risk
Reports of financial information required by regulatory agencies are incomplete, inaccurate, or untimely, exposing the company to fines, penalties and sanctions.

Strategic

Environmental Scan Risk
Environmental scan risk arises when: the company does not have an effective process to obtain relevant information about the external environment, or key assumptions about the external environment are inconsistent with reality or are not being monitored by the company.

Business Portfolio Risk
Business portfolio risk is the risk that the firm will not maximize business performance by effectively prioritizing its products or balancing its businesses in a strategic context.

Valuation Risk
Management and key decision-makers are unable to reliably measure the value of a specific business or any of its significant segments in a strategic context.

Performance Measurement Risk
Overall organizational performance measures are not sufficiently balanced, or they are not consistent with, and do not support business strategies.

Organization Structure Risk
The company's organizational structure does not support change or the company's business strategies. An organization's values and culture, its infrastructure and how it defines responsibility, authorities and boundaries and limits has a significant effect on its ability to govern and achieve its objectives.

Resource Allocation Risk
The company's resource allocation process does not establish and sustain competitive advantage or maximize returns for shareholders.

Planning Risk
The company's business strategies are not driven by creative input, effectively programmed, consistently communicated, or responsive to environmental change and organizational learning.

Life Cycle Risk
An organization's approach to managing the movement of its product lines and evolution of its industry along the life cycle (e.g., start-up, growth, maturity and decline) has a significant effect on the ultimate success or failure of its business strategies.

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Timothy Noonan
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Thursday, 28 November 2013 17:54
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Release Hold

eDisco Step9

Release

  • Scope narrows or closes.
  • Collection Manager will alert IT contacts, with copy to the Action Committee members, for the applications subject to the litigation hold for the specific litigation matter has been lifted.
  • Prior to releasing the affected applications, the Legal Team will confirm that no other litigation holds apply to those applications/data.
  • Upon cessation of the litigation hold, the affected applications/data return to their normal retention and disposition procedures under previous Policies and Procedures.
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Ongoing Activities

 

eDisco Step8

 

OnGoing Activities

  • Create the Data Gathering System
  • Build a solution that would allow an easy to use interface that is well organized
  • Conduct a Pilot Test
  • The plan/solution should be reviewed by a data gathering professional to ensure that the procedures are comprehensive and forensically sound. Upon acceptance of the plan/solution, it is important to test the procedures on non-relevant data. This test will be good practice for the individuals involved, and will reveal any potential problems with the plan
  • Implement the Plan/Solution
  • Completing an electronic discovery project on time depends in large part on effective execution of the data gathering plan. Implementation of the plan/Solution should occur as early as possible, and should be managed by a designated person trained to maximize effectiveness of this crucial first step to effective electronic data review
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Produce

eDisco Step7

Produce

Deliver

  • Make available to portals, collaboration tools, etc or/and to products that the industry is more comfortable or to other enterprise searches of information to process
  • Assist with the issues of Privilege during the discovery process
  • Testifying to agree or dispute the methodologies utilized during the discovery process

 

Discovery done in stages. Since the volume of data could be very large the data can be produced in stages

  • On-line: Coming from servers such as email, fileshares, etc.
  • Near-line: Coming from desktops and other devices
  • Off-line: coming from backup tapes, deleted, fragmented or damaged data

 

Deduplication plan for separating email message to attachment.

A privilege log will provide a working index to documents that have been withheld or which contains redactions. Privilege review should be performed after the experts had extracted and searched the data for items of interest.

Paper is universal, electronic formats are more specific. Native format is generally acceptable, yet if old technology can not handle the producer's electronic data, a mutually agreed upon format for the data can and should be converted.

  • A court may consider cost-shifting or exclusion when electronic data are in a inaccessible form, such as backup tapes or deleted files.
  • Unreasonably cumulative or duplicative
  • Obtain from some other source that is more convenient, less burdensome or less expensive
  • The requesting party has had ample time to obtain the information
  • The burden and expense of discovery outweighs its likely benefit. (Zubulake v. UBS Warburg LLC; 2003 WL 21087884 - SDNY)
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Inspect & Review

eDisco Step6

Inspecting-Review

 

Subject Matter Expert will be able to review the relevance of the data collected and determine what is necessary to satisfy the inquiry

  • Testifying to agree or dispute the methodologies utilized during the discovery process
  • Expert console: According to precedent, determine the issues come up in audits

 

The data analysis will group your data by topic, and therefore uncovering themes:

  • Keyword searching that identifies documents containing keywords or eliminates documents in the filtering stage that don't record keyword hits.
  • Subject matching that gathers e-mails with the same or similar subject lines.
  • Conversation tracking that locates the rest of the conversation surrounding an interesting document.
  • Concept searching that identifies word patterns and occurrences.

Topic-based review

  • Documents and other data according to conceptual meaning, a online repository tool organizes the data set into orderly groups according to intuitive topics and subtopics.
  • Divide up the work based on topics, and distribute to custodians
  • Once assigned, reviewers will proceed through their documents to determine responsiveness and privilege, make redactions, and further analyze the data while bearing in mind the themes that link their documents together. Also grouping the data within the custodian by theme, thus providing the benefits of topic grouping while at the same time making sure you're getting through the priority custodians' documents first.

Topic review benefits in the following ways:

  • Time and Cost savings. Knowing that documents in topic folders are similar allows you to categorize them faster, decreasing review time and lowering overall costs of e-discovery.
  • Greater Accuracy of review and provides an additional way to control the quality of your work.
  • Data Assessment assists in developing and testing theories of the case.
  • Workflow Management gives you the ability to assign documents based on topics rather than custodian, if you so choose. You can also assign the important documents to your experts and not bog them down with data that isn't likely to be relevant.
  • Prioritization allows you to organize the review based on topic priority and address the important documents first.
  • Categorization allows you to make responsiveness and privilege decisions more quickly based on topic; some data sets can be mass categorized.
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Implement the Plan

eDisco Step5 startingline
Completing an electronic discovery project on time depends in large part on effective execution of the data gathering plan. Implementation of the plan/Solution should occur as early as possible, and should be managed by a designated person trained to maximize effectiveness of this crucial first step to effective electronic data review.
Identify a hit list and create a new environment for copies
 

Data Collection

The Legal Team submits a request to specific IT contacts for certain data to be collected from the responsive applications.

Collection Manager will coordinate directly with IT contacts for the collection of such requested data, after first determining if the data has been previously collected in a suitable format for another matter.

Additional data may need to be collected from the IT contacts based on discovery requests or court orders.

Collection Manager will verify collected data is what was requested.

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Integrity of the Evidence and Custodians

 Legal-Integrity

 Evidentiary Integrity

  • To ensure that evidence is authentic, never work with original evidence. A copy of the original must be created before review and analysis
  • Metadata will need to be considered for the integrity of the evidence. Many systems many change dates or ownership, hence, it is imperative that the data is kept in its original form. a copy myst be made so business can run without being impaired by the impending audit. Williams v. Sprint/United Management Company held that metadata is discoverable.

 Custodians

  • It is essential that the custodians be documented along the process to prove the integrity of evidence has been maintained. The chain of custodians will be coupled with the evidence and will therefore, need to be kept as long as the evidence is kept.
  • The following information will need to be identified
    • Date, time, place of collection or receipt
    • the name of the collector or receiver
    • Description of what was obtained
    • Media type, standard, and manufacture
    • Evidence transfers and purpose of transfers
    • Physical inspection of the evidence
    • Procedures used to collect and analyze data
    • Date and time of check-in and check-out of media from secure storage
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Hold: Suspension of Data Destruction Procedures

 eDisco Step4
 
DataLock
 
 
 
 Initiate a Hold on all Data
Suspend the recycling of backup tapes
Disable auto-delete of email
Disable auto-delete of any Records Management application
Users that have left the organization or are having their hard drives/laptops refreshed will need to have their data backed up

IT Sub-Team:
1. Identify data locations and applications:
(Applications ID, Alias, Name, Short Description, Long Description, Lifecycle Stage, Legacy Company, Retirement Planned Data, Business Owner, Business Contact, IT Owner, IT Contact, Level 2 manager, Production Format, Inaccessibility issues/Burden to produce, and Description of potentially relevant data.)
2. Divide the responsibility for obtaining information from IT managers within the IT Sub-Team
3. Document data source
4. Provide and explanation why certain data can not be reasonably accessible or would be burdensome to produce (These are the change of the Federal Rules of Civil Procedure changes of 12/06)
If the collections of data were deemed to be burdensome or inaccessible, a detailed cost/burden or explanation why data is inaccessible will need to be provided.
5. Document any issues with obtaining information from differing business departments
6. Signoff and send to Collection Manager
 

Collection Manager 

 

1.Review all certified forms from IT Sub-Team 

 

If information is missing, Collection Manager requests that the Team obtain vague or missing information 

 

2.Compile all collected information regarding relevant data sources into one document 

 

Legal Team 

 

1.Review data source list and confirms data sources subject to legal hold

2.Paralegal sends a copy of the Mandatory Preservation Notice via email to the IT Contacts identified as having responsibility for the potentially responsive data source, with copy to the respective IT Sub-Team member. 

 

The recipients need to respond and will be added to the custodian list. 

IT custodians are responsible for ensuring their respective applications are preserved according to the mandatory preservation notice, including but not limited to, the following:

 

-IT contacts will suspend routine deletion of data in litigation relevant application

 -IT contacts will suspend automatic deletion or recycling of data in litigation relevant application

 -IT contacts will not run the regular data purge jobs (no archive) unless necessary to maintain system performance and data removed from active system remains reasonably accessible in another format, without prior approval of Collection Manager

 -IT contacts will not retire the litigation relevant application without prior approval by Collection Manager

 

As part of the periodic audit process, Collection Manager will require IT contacts to verify that the litigation relevant applications continue to be properly preserved pursuant to the mandatory preservation notice by completing the “IT Verification Regarding Preservation Requirements” form, which shall be sent to the Collection Manager, copy to the members of the Action 

 

 
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Prepare the Data Gathering Plan

eDisco Step3
Once the information is collected, a customized retrieval plan can be developed. This should include:
A diagram of the locations of data to be gathered.
A project plan for all physical locations.
A summary of the anticipated impact on operations.
Identification of all members of the data gathering team.
Identification of points of contact for each location.
An inventory of the hardware and software tools to be used to gather data. Define a Search mechanism or portal (such as ECI, FASTSearch) that would plug into as many repositories as possible as identified.
An outline of the specific collection procedures to be used.
The remaining repositories will need a detailed work product checklists for technical staff completing the collection work or some other searching software.
Chain of custody instructions for all involved parties.
Arrangements for shipment of the media containing the data gathered. 
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Identify Relevant Data

eDisco Step2

RelevantData

 

 

Gather as much specific information as possible about the layout of the organization's IT systems through existing documents and interviews. Create a diagram to show how the relevant data is distributed throughout the organization. This should include not only storage, but also the network and the actors who interface with the relevant data.

Areas to consider when searching and interviewing: 

  • External
    • External suppliers/partners
    • Laptops and blackberries
    • Blogs/Wikis
    • Archives
    • Thumb drives/external drives
  • How are shared folders organize?
    • By department?
    • By geography?
    • By job function? 

 

  • Internal
  • Electronic Mail Information
    • What types of electronic mail servers are deployed throughout the organization?
    • Are email services centralized? If not, where are the mailboxes of the relevant custodians?
    • What are the email server policies?
    • How long is email allowed to stay on the server?
    • What are the mailbox size limits?
  • File Server Information
    • What types of file servers are deployed throughout the organization?
    • Do users have home directories? If so, on what servers?
    • What are the size limits for each user?
    • Does the organization utilize shared folders? 
  • Employees Local DrivesDatabases/ECM solutionsBlogs/Wikis
    • Where do employees save data? In the My Documents area?
    • Is there information saved in temporary areas? Such as browser cached pages or auto-backup data
  • Archives
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Defining the Scope: Questions and Team

eDisco Step1

Scope


Who and What?

Two important areas that need to be understood and defined first are the questionnaire and the Discovery Team. The questionnaire will give you insight on what type of data exists, where it is located and how difficult it may be to obtain the data. Important points when starting an investigation. Collecting the data may be too expensive and perhaps can be avoided or could allow for cost shifting. 


What

Questionnaire:

Developing a Questionnaire can be pretty difficult because you don't want to have to keep on going back to people with the same request over and over. So take the time and create a thought out questionnaire. 

Who is receiving the questionnaire, IT, Subject Matter Experts (SME)? You need develop your questions to your audience. Most importantly you need to be clear. People may respond to a vague question or something they don't understand with an answer they very well might bite you later. Often times you can partner with a member of the audience team or vet your draft questionnaire with a team member.

Be sure you identify a sent date and due date. This a high priority item, yet may not be considered to have the same weight to whom your sending this questionnaire.

Legal Questionnaire

  • Preservation noticed been circulated
  • Is Legal Hold in place
  • Are there any overlaps in preservation
  • Concerns about deleted information regarding this matter
  • Is this a forensic type of investigation? Deleted data or unallocated space?

IT Questionnaire

  • Who has responsibility of operations or administration
  • What are your current IT Policies? and When were they Changed? What are the Policies on Former Employees? 
  • Are there custom  or proprietary system?
  • Upgrades

  • Unstructured Data
      • Locations of user files, shared drives or storage areas
      • Local workstations/Laptops
      • Types of applications (file formats) used to create documents
      • Instant Messaging
      • Peripheral Devices
  • Structured Data
      • Databases, such as enterprise resource planning and supply chain management database. Identify the engines on which any database runs.
      • Content Management Systems
  • Semi-Structured Data
      • Smart Phone Services, such as Blackberries?
      • Types of Communication methods such as legacy email (Netscape email, cc-mail, etc.)
      • Voicemail
  • Archiving
      • Inventory of backup tapes, if so, the types of tapes with potentially responsive information.
      • Have data or record destruction and auto-deletion policies been Suspended?

SME Questionnaire                                                                                                                         

  • Organizational Chart
  • Number of Custodians: Names and LocationsForeign Languages  
      • Consultants or Former Employees
  • Paper Documents

Once we have mutually agreed in a partnership to take on the task, we need to identify members of the Action Committee. This Committee will be comprised of team members (the client may need to reach out to industry experts that are not  employees, yet bound by the same standards) and client team.


Who

Typical Team roles:

eDiscovery Project Manager: PM meet tight timeframes

Collection Manager: Assist the IT staff technical expert on gathering data given the volume and location of potentially relevant data. Assist with the production of data due to the variety, rarity, and complexity of current and legacy software applications. With the SME, the IT manager will analyze backup tapes to support an argument that the tapes should not be subject to discovery, or try to limit the number of backup tapes based on analysis. Assist in copying of relevant data in order not to interfere with business operations.

Subject Matter Expert: technical expert on the industry and request area. Manage foreign privacy and data transfer issues, testify as to the defensibility of the collection and processing procedures.

Paralegal: Liaison with counsel, scribe

Outside Counsel

In-house Counsel: help identify to personnel and smooth the way with other departments due to ongoing business requirements. Identify privileged information, such as names and emails of attorneys involved. Assist in developing searches to identify relevant data collection candidates as well as process and review the relevancy of data.

Communication Manager: Since this is a sensitive matter and will need to occur in haste, thorough and explicit communication is imperative.

IT manager: Provide IT topology, system architecture, historical and current practices for computer systems and policies for deleting e-mail messages, location of data regarding the litigation, location of backup and number of backup media with potential information. Assist in preservation policies and suspension of routine destruction of potentially relevant data.

Typical Sub-Team roles:

IT manager:

Directory of Data Security: security issues such as online review tools

Records Manager: Understanding document Life Cycle procedures and policies

 

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Whistling Down the eDiscovery Path: Planning for eDiscovery and Document Production

The EDRM model is a concise descriptor of the electronic discovery process. In the coming weeks I will review real-life applications and complementary steps that will satisfy the general electronic discovery process. The following steps loosely correspond to the EDRM model and have been helpful in ES production.

 

 

If you know of any other steps chime in! 

 

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