February 15, 2011, 6:17 PM — It's no secret that corporations are drowning in data. IDC estimates the volume of computer data worldwide will reach 1.2 million petabytes during 2011. A November, 2010 Gartner study found data growth was one of the top three challenges for data center managers at 47% of large enterprises.
That usually prompts worries about the cost of data storage, but the data itself poses dangers that most companies are not managing well, according to Katey Wood, information management and e-discovery analyst at Enterprise Strategy Group.
Despite the additional costs that unstructured data like e-mails, spreadsheets and word processing documents add to compliance processes, most companies do little to hem in sprawling data, Wood says.
The annual cost of litigation (excluding settlements) was more than $1 million for half of U.S. companies in 2010, prompting far more to investigate alternate ways to pay for legal protection, and 40% of large companies to plan increases in spending on e-discovery during 2011, according to surveys from legal-information services firm Fulbright & Jaworski.
In the "fire drill" most companies go through following a legal request for information, some companies identify all the users with pertinent data and often just copy all the data on laptops, smartphones and other devices -- rather than spend time selecting what they want, Wood says.
Repeat Searches Waste Money
That's not only expensive, but also could mean paying repeatedly for the same set of data which, itself, is so inflated with the irrelevant that only one bit in 20 is relevant to a particular case, according to John Palumbo, senior litigation support manager for law firm Foley Hoag, LLP in Boston. Foley Hoag specializes in clients in technology, banking, pharmaceuticals and other highly regulated, data-heavy industries.
Palumbo, a records-management specialist with a knack for information technology, despite a traditional gulf between IT and records managers, runs what amounts to an internal service bureau at Foley Hoag.
Most initial internal searches net far more data than they should, plus repeat work almost certainly done for the last lawsuit, he says.
"Doing it the same way twice means just paying twice to collect the same non-relevant data," he says.
It's unusual for Palumbo to deal with a client that isn't coming in with huge files -- 100GB, 200GB -- and paying Foley Hoag to filter through them.
"The most expensive part of e-discovery is attorney review," Palumbo says. "If you don't cull those data files down a long way you end up handing them off to associates to go through them, and at $200, $300, $400 dollars an hour, that adds up pretty quickly. "