E-Discovery Is for SMBs Too

The Federal Rules of Civil Procedure place the onus on businesses to come up with systems to ensure information can be produced during e-discovery proceedings. And that's where channel pros come into the picture.

By Martin Sinderman

IF YOUR BUSINESS IS BIG ENOUGH to be sued, it's big enough to have to take steps to produce evidence contained in emails, instant messages, and other forms of electronically stored information, or ESI, during the pretrial discovery process.

Big businesses, SMBs, and individuals are subject to the e-discovery provisions of the Federal Rules of Civil Procedure (FRCP), which govern procedure in United States district courts and the vast majority of other courts in the nation. Intended to clarify definitions and procedures in the pretrial disclosure of ESI, the provisions place the onus on businesses to come up with adequate systems to ensure this information can be produced-or face penalties.

Cost-cutting pressures and rising levels of litigation are driving businesses to place greater attention on records retention, searching, and other elements of e-discovery. Coming up with a good strategy takes the efforts of IT and legal personnel, as well the right technology, according to Brian Hill, senior analyst at Forrester Research Inc.

"It is critical for legal and IT people to meet and map out what the game plan is before litigation hits, as well as formulate a good idea of what standardized processes should be in place once it does," Hill says.

On the technology side, a number of solutions are available. "It is especially advisable for SMBs to look at message archiving and records retention and management applications," says Hill, noting that products from companies like EMC and Symantec have proven popular at both the SMB and enterprise levels. Meanwhile, hosted solutions, such as those from Global Relay, LiveOffice, and Smarsh, "are also proving to be attractive for SMBs," Hill adds.

THE PRICE OF NONCOMPLIANCE
The price of failing to implement adequate processes can be high. "FRCP e-discovery provisions hold that if you cannot produce a piece of information as a result of the routine good-faith operations of your IT system, then sanctions will not apply," notes John Bace, research vice president at Gartner Inc.

"But the threshold you must meet to enter that ‘safe harbor' is whether you have good document retention policies," Bace notes. "And, the sanctions that apply to not being able to produce a piece of ESI for discovery are the same as those previously reserved for the deliberate destruction of evidence, and they are pretty draconian."

Implementing steps to avoid destruction of evidence (spoliation) is key for SMBs, according to W. Lawrence Wescott II, an e-discovery consultant. "Be able to implement a ‘litigation hold,'" he says. "If you think that someone is about to sue the business, you need to be able to preserve evidence related to the suit. Just as you cannot destroy any paper files that are relevant to the suit, you can't destroy electronic files related to the suit."

Another tip to help steer clear of e-discovery problems is to know where your ESI resides, according to Wescott. The courts have defined electronically stored information very broadly: It can reside on cell phones, smartphones, and thumb drives, as well as on laptop hard drives and email and network servers. 

Also, implement a record retention schedule, listing the information important to your business and how long it should be kept, advises Wescott. This provides legal justification for the destruction of ESI no longer needed or legally required. Being able to dispose of this information, says Wescott, "can reduce the amount of information possibly subject to a suit, reduces the amount of information that must be reviewed by attorneys, and correspondingly reduces the legal bills in a lawsuit."