Reduce litigation risk, cut costs with proactive eDiscovery

Companies that take charge by proactively managing enterprise information reduce litigation risk, maintain compliance more efficiently, and save a bundle in the process

Companies of all sizes are facing increased litigation risks and costs today. A great way to reduce those risks and costs is by adopting a proactive eDiscovery approach. If you’re not sure what “proactive” eDiscovery means, this article not only offers a good definition, but also explains the trends that make proactive eDiscovery inevitable, how to implement a proactive solution that can save you money, and how to get started now.

Getting a Handle on eDiscovery
“Discovery” is the legal process that all companies facing lawsuits are required to go through in order to produce relevant documents for the court to consider. Generally, any company with $1B in revenue faces multiple legal matters. They may be spurious, or legitimate—but for good-sized companies, they’re inevitable. What’s notable is that those companies spend between $2.5 million and $4 million a year on legal discovery of electronic files alone.

What’s driving those costs? Part of it is an increase in the number of lawsuits. Part of it are the new regulations that enterprises have to comply with in the wake of Enron, WorldCom, and Tyco. But probably the most important factor driving the increase in legal discovery costs is the rapid growth of electronic data that is generated and stored by companies as part of their ongoing business operations. While technology has made our lives at work easier and more productive, it has also contributed to the proliferation of electronically stored information (ESI). To make things more complicated, as much as 90% of all that information is unstructured and unmanaged. Most companies do not have well defined information management policies in place to manage the explosive growth of this data. This is a recipe that can lead to huge litigation costs later for companies when they have to reactively dig through mountains of information to provide timely responses for eDiscovery requests.

Couple the explosive data growth with the new Federal Rules of Civil Procedure (FRCP) and you realize that companies need to pay attention – as UBS Warburg and Merck learned – paying $29.2M and $253M respectively for non-compliance in litigation that required eDiscovery of documents.

Clearly the new FRCP rules – unlike many other compliance rules– are being enforced.

eDiscovery is the process of using technology to identify, collect, preserve, process, review, and produce all the ESI that is relevant to a particular legal matter. “Reactive” eDiscovery means waiting until you face a legal matter, and then scrambling to find what you need scattered around the enterprise. “Proactive” eDiscovery means putting processes in place in advance to classify, organize, and manage (retain/delete)information so that when you’re faced with a discovery request, you can respond quickly, easily, and at a much reduced cost. A crucial component – one that significantly reducing a company’s risk and cost – is to dispose of old and obsolete data that the company is

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