The Cost of eDiscovery is Bringing the American System of Justice to the Brink of Destruction

"There is no truth if you cannot find relevant evidence and, unless companies get their eDiscovery act together, eDiscovery is about to destroy the American System of Justice as we know it." That statement summarizes the opening remarks that Ralph Losey, the noted eDiscovery attorney of FloridaLawFirm.com, made during a recent presentation. From there, he went on to explain why he believes most organizations - public or private, large or small - have no viable strategy for eDiscovery and why a reactive approach to eDiscovery is putting the viability of the American System of Justice as we know it at risk.

In early June, I had the opportunity to hear Losey speak at an archiving and content management writer's conference hosted by EMC Documentum at the Hotel Gansevoort in New York City, NY. Losey began his presentation with some insightful observations and supporting statistics as to how much eDiscovery is already costing American organizations and why these costs pose such a threat to the current American System of Justice:

• The cost of an eDiscovery associated for Microsoft is between $10 and $20 million dollars for each and every lawsuit.
• Losey recently wrote in his blog about a case where the Washington D.C. Appeals Court affirmed an order requiring that the Office of Federal Housing Enterprise Oversight (OFHEO) spend $6 million, or 9% of its annual budget, to comply with an eDiscovery subpoena request.
• Litigation is becoming too expensive so organizations are opting not to go to court and instead just settle.
• The American system of justice is very different than Europe's. Europe permits the voluntary disclosure of information so European companies may only choose to disclose information that helps them in a court case. The American System of Justice requires organizations to turn over all relevant information whether it hurts or helps them in a case.
• The written word has evolved over the centuries to become considered the best form of evidence. Since lawsuits involve events that occur in the past (often years ago), organizations need to be prepared to go back years to produce written documentation. The written word today now almost exclusively exists in the form of electronic communication.
• In 2006, Networkworld cited a study conducted by the Butler Group that employees now spend as much as 25% of their day searching for the right information to complete a given task. Losey now believes that the percentage of time employees spend looking for stuff is closer to 40%.
• The best estimates available are that during an eDiscovery organizations can only retrieve about 22% of the writings that are relevant to a case.

It is this last statistic that specifically gives Losey concern about the future of the American System of Justice. Technology has evolved tremendously over the last 20 to 30 years and it has become a real struggle for the law to keep up with this level of change. In 30 years, organizations have essentially switched from storing all of their written communications on paper to storing all of them electronically. Unfortunately, they have not adequately changed their internally processes to manage this information.

To respond to this change in information management, Losey recommends that organizations take two steps now to prevent the costs of litigation and eDiscovery from crippling or even bankrupting them in the future:

• Be proactive, not reactive, about information management.  The first step in the Electronic Discovery Reference Model (EDRM) is "Information Management" and yet most organizations start managing their information only after they receive an eDiscovery request and then are forced to start with some step in the middle of the process - such as the collection stage.

That is what gets companies into trouble. Starting with the collection of data as a means to do eDiscovery in a chaotic environment becomes very expensive. As a result, much of the money that organizations spend on an eDiscovery is wasted since so little relevant information is retrieved during the process.
 
A better way for organizations to start is by managing and archiving their email using software like Estorian LookingGlass. Software like this gives them a means to capture and manage the flow of information in and out of their organization while making it accessible and searchable if and when an eDiscovery occurs.

• Prepare for a future where a random sampling of electronically stored information (ESI) becomes the norm. While it is unlikely organizations ever retrieved 100% of relevant information when it was stored in paper, achieving that level becomes even more unlikely that it is stored electronically. So to adapt to this new environments, organizations need to prepare to employ methods of random statistical sampling of their ESI and then prepare to defend this method of eDiscovery in court to keep eDiscovery costs from spiraling out of control. Losey says, "Common sense dictates that sampling and other quality assurance techniques must be employed to meet requirements of completeness."

If an organization is not already employing some means to archive and manage its ESI, it is going to lose in some way - the only question is how much are they willing to lose? Even winning a court battle may only be a Pyrrhic victory as it may be cheaper for an organization to settle out of court than defend itself.

Yet the greater danger that the American population faces is more than the destruction of the current American System of Justice. It begins to change who we are and what we are as a nation as it creates an environment where only the rich can afford to litigate and ultimately exonerate themselves of any wrong doing. As for the rest of us, we may be looking a future of forcing to settle outside of court for we can not afford to uncover the truth and justice is never fully measured out.