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Planning and Preparation for Litigation in the Large Corporate Environment Under the New Federal Rules James M. [Jim] Wright, P.E. Wright Consulting LLC.

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Presentation on theme: "Planning and Preparation for Litigation in the Large Corporate Environment Under the New Federal Rules James M. [Jim] Wright, P.E. Wright Consulting LLC."— Presentation transcript:

1 Planning and Preparation for Litigation in the Large Corporate Environment Under the New Federal Rules James M. [Jim] Wright, P.E. Wright Consulting LLC

2 Agenda General Considerations Goals of Litigation Preparation The New FRCP E-Discovery Costs Early Actions Essentials Resources -The E-Discovery Team The Discovery Process Under the New Rules –Activities & Decisions –Key Client Considerations RECAP-Client Best Practices

3 General Considerations The new FRCP introduce significant new risks in litigation Costs associated with processing data can exceed the merit value of the matter Best practices necessitate Client participation in E-Discovery Good preparation and planning are essential to manage risk and cost. This includes: –Actions –Policies, Practices, Procedures, Protocols –Decisions - in advance of actual litigation

4 Goals of Litigation Preparation Response Planning –Identify Resources & Roles –Early Action Planning –Strategic Advantage Risk Management –Identify & Manage Risks –Internal Policies, Protocols in place –Spoliation Avoidance Cost Management –Identify opportunities

5 What are the New Rules? ESI formally defined in Rule 34[a] Parties must now Meet and Confer to discuss ED issues per Rules 16[b] and 26[f]. Producing parties must now identify all possible sources of ESI, including those it does not intend to search due to excessive burden. Rule 26[b][2][B] establishes a procedure for dealing with such burden claims. A procedure for determining the form[s] of production is outlined in Rule 34[b].

6 New Rules [cont] Parties in receipt of inadvertently produced privileged ESI may not use it until waiver claim[s] have been resolved under Rule 26[b][5][B]. Parties inadvertently destroying ESI by theroutine, good faith operation of their computer system[s] [may] have some spoliation sanctions protection under the controversial new Rule 37[f]Safe Harbor provision. The new rules contain many ambiguities, especially in their practical application, which are somewhat clarified by the published Rules Committee Notes.

7 What does this mean re: Litigation? The cost of litigation is increasing dramatically under the new rules, with E-Discovery costs in the $$ millions becoming routine. Increased discovery costs are expected to raise the settlement value of small matters significantly. The risk of spoliation is much higher due to the volume and complexity of ESI. The legal and technical ambiguities present a variety of new risks as well.

8 E Discovery Cost Breakdown Collection 5-10% Processing [ED Vendors]10-25% Legal Review50-80% Production 5-15% CONCLUSION: –Reduction of amount of ESI going to Legal Review is the obvious key to cost management.

9 What is the industry doing? An E-Discovery industry [>$2BB in 07] has arisen with technology tools to facilitate filtering and legal review of ESI. Law Firms have largely not acquired the technical expertise nor adopted practices to manage cost. Most large corporate litigants are moving to take management control of ED.

10 Scheduling Conference Duty to preserve Filing 21 days ?? days Meet & Confer Early Actions Timeline Under the new FRCP Identify & Collect ESI Analyze ESI : Qty/Type Develop ED Plan Prep for Meet & Confer time

11 Early Actions Essentials Client must take lead in early actions as Counsel comes up to speed –Preservation & Collection –Analysis of ESI Collection –Privacy Law Issues Plan Counsel must also be able to come up to speed quickly to participate in development of Discovery Plan At Meet & Confer, a strategically-developed Discovery Plan provides significant advantage Early Preservation & Collection actions gain Good Faith with Court Important decisions/negotiations are being made while Safe Harbor is in effect Client and ED Vendors must have established relationship and work plan for early actions to be possible. Vendor[s] must have required reporting capabilities [File type, keyword ]

12 Client 2 4 Counsel 3 1 E-Discovery Vendors The E-Discovery Team Client –Owns Risk, Pays Costs, so can make risk decisions quickly –Knows ESI best, has IT resources –Ability to move early and quickly Counsel –Strategic Legal Knowledge –Familiarity with Court –Knowledge of legal issues in E-Discovery E-Discovery Tech Vendor[s] –Powerful technology options –Ability to apply resources as needed –Experience in processing ESI –Ability to provide expert testimony to E- Discovery matters Discovery Management Discovery Management –Develops & Manages Discovery Plan Activities Resources Schedule –Identifies Risk & Cost Issues –Coordinates Discovery Team

13 The E-Discovery Process Overview PreservationCollectionAnalysis DiscoveryPlan ESIProcessingLegalReview Production Meet&Confer Rule 16 SchedulingConference PHASE 1 COLLECTION & SCOPE PHASE 2 PLANNING & NEGOTIATING PHASE 3 EXECUTION

14 PHASE 1 Actions & Decisions PreservationCollectionAnalysis 1. Identify Key Players 2. Publish Lit Hold 3. Interview Key Players 4. Determine Relevant ESI Locations with Data Map 5. Identify Vulnerable ESI 6. Determine Privacy or Confidentiality Issues 7. Determine Need for Forensics 8. Notify Opposing Counsel? 1. Collect 2. Coordinate with Custodians 3. Maintain Chain of Custody Records 1. Generate ESI Collection Inventory Report 2. Identify File Types of Interest 3. Identify Files where Native is Necessary 4. Identify non-standard File Types 1. Non-Indexable 2. Non- Commercially usable 3. Internal Proprietary

15 Preservation Key Considerations Preservation 1. Identify Key Players 2. Publish Lit Hold 3. Interview Key Players 4. Determine Relevant ESI Locations with Data Map 5. Identify Vulnerable ESI 6. Determine Privacy or Confidentiality Issues 7. Determine Need for Forensics 8. Notify Opposing Counsel? Must have established process to acknowledge trigger and to identify KPs. Consider tiered KP list with different [less rigorous] search criteria for lower tiers. Must have established protocol to publish hold notice. This must address all forms of ESI. Technology tools exist to automate much of this process. Use of questionnaires in advance of personal interviews. If prepared to do this in house, time savings are notable. Develop a detailed Data Map internally which can be edited for each matter If forensic collections are deemed appropriate, consider whether outside collectors are needed. If you intend to exclude any significant ESI from preservation, consider notifying OSC to limit later spoliation risk.

16 Collection Key Considerations Collection 1. Collect 2. Coordinate with Custodians 3. Maintain Chain of Custody Records Consider internal collections. Will necessitate software, hardware, and people. Establish protocol for collections from PCs which is subject to interruption and can be very time-consuming. Consider whether to do this over the network or locally in users office[s]. Decide if making collection as a means for preservation is cost- effective. Perform collections internally with enterprise applications that track CoC automatically.

17 Analysis Key Considerations Analysis 1. Generate ESI Collection Inventory Report 2. Identify File Types of Interest 3. Identify Files where Native is Necessary 4. Identify non-standard File Types 1. Non-Indexable 2. Non-Commercially usable 3. Internal Proprietary Confirm the availability of applications or resources that can generate these reports quickly. These can be desktop apps, or provided by ED vendors. Consider using inclusive rather than exclusive approach. Identify hi-qty file types that can be excluded [e.g. html] Quantity of these file types can present significant cost challenges Non-indexable file types cannot be electronically searched, so special process [e.g. OCR], or costly human review is necessary Consider the means to produce these in reasonably usable forms.

18 PHASE 2 Actions & Decisions 1. Identify File Types & Search Criteria 2. Develop Plan(s) for Non- Indexable and other File Types to be Searched 3. Develop Plan for Backup and other Media 4. Establish Burden Arguments for Excluded [NRA] File Types 5. Identify 30[B]6 Deponent[s] DiscoveryPlan Meet&Confer Rule 16 SchedulingConference 1. Who Attends? 2. Present Proposed Discovery Plan 3. Negotiate Terms for Search Criteria [Keyword List Sizes, etc.] 4. Negotiate Privilege Issues 5. Negotiate Form of Production & Timing [Rolling?] 6. Negotiate Authentication Issues 1. Who Attends? 2. Negotiate Differences in Discovery Plan 3. Present/Defend Burden Arguments for NRA ESI 4. Argue Cost-Shifting 5. Negotiate Schedule

19 Discovery Planning Key Considerations 1. Identify File Types & Search Criteria 2. Develop Plan(s) for Non- Index-able and other File Types to be Searched 3. Develop Plan for Backup and other Media 4. Establish Burden Arguments for Excluded [NRA] File Types 5. Identify 30[B]6 Deponent[s] 6. Decide privilege issues DiscoveryPlan It is essential that a file type listing [both number and size of each file type] is available to do this. Not all ED vendors can generate this information easily. Parties will usually accept a date range filter [i.e. file creation date]. The range must be negotiated This can be complex, but is extremely important, as non-indexable files [e.g images] cannot be electronically searched, so expensive human review is needed. Quantify these file types and if a significant number exist, either argue to eliminate them from further review if possible or propose an alternate, limited, processing scheme [e.g. sampling, OCR & E-search, narrow date range, etc.]. Also address files that should be produced native. & discuss authentication thereof. After identifying whatever backup media exists that might contain discoverable ESI, determine if it [largely] exists elsewhere and decide whether it can be argued that it is NRA [Not Reasonably Accessible]. Develop argument to include Undue Cost, Business Disruption, and Disproportionality. Be prepared to defend the numbers at the Rule 16 hearing, or arrange for ED vendors to do so. Decide who will be the 30[b]6 wtiness[es] to testify to collection methods and actions, and to defend burden arguments. Does a Clawback Agreement make sense ?

20 Meet & Confer Key ConsiderationsMeet&Confer 1. Who Attends? 2. Present Proposed Discovery Plan 3. Negotiate Terms for Search Criteria [Keyword List Sizes, etc.] 4. Negotiate Privilege Issues 5. Negotiate Form of Production & Timing [Rolling?] 6. Negotiate Authentication Issues In addition to outside counsel, consider having the E-Discovery coordinator[s] present, to consult with counsel on ED issues, and to discuss with opposing party, if so directed. Present a detailed, proposed E-Discovery Plan, as developed in the previous steps. Leave room for negotiation. Discuss date ranges and file types first, as these are not normally rigorously contested. For Keywords, agree to a procedure, but not specific keywords at this time. Negotiate a Clawback if deemed appropriate. Subject to the courts likely interest in expediency, negotiate enough time to deal with the keyword process, and subsequent review. Try to agree on a rolling production. Negotiate Authentication methodology for any files to be produced in native format.

21 Rule 16 Conference Key Considerations Rule 16 SchedulingConference 1. Who Attends? 2. Negotiate Differences in Discovery Plan 3. Present/Defend Burden Arguments for NRA ESI 4. Argue Cost-Shifting 5. Negotiate Schedule Consider having E-D specialist[s] attend, or at least be available outside the meeting for consultation or testimony, or at a minimum. by phone. Be prepared to defend any burden arguments for the exclusion of ESI, even if agreed to by opposing counsel in the meet and confer. Consider having ED vendors present or on call if deemed appropriate. Be prepared to present the arguments for areas where agreement could not be reached in the Meet and Confer. If arguments to exclude NRA ESI are unsuccessful, be prepared to argue for cost-shifting. Endeavor to get enough time to execute the Discovery Plan, and be mindful of the keyword process and review time. Try to agree on a rolling production.

22 PHASE 3 Actions & Decisions 1. Selection of E- Discovery Vendor(s) 2. Management of Vendor(s) 3. Analysis of Vendor Reports during Processing 4. Decisions on Filtering Criteria 5. Negotiate Keyword List & Processing 6. Coordination of any Vendor Testimony 1. Develop Review Plan 2. Single or Multi- Phase? 3. Contract ATTYS? 4. Review Platform[s] 5. Limited Review due to Clawback? 6. Prioritize Review per Rolling Production Agreement 7. Develop Privilege Log[s] 1. Coordinate Productions perRolling Agreement 2. Confirm Authentication 3. Oversee and Log Productions 4. Audit E-Discovery Vendor QA/QC Processes ESIProcessingLegalReview Production

23 ESI Processing Key Considerations 1. Selection of E- Discovery Vendor(s) 2. Management of Vendor(s) 3. Analysis of Vendor Reports during Processing 4. Decisions on Filtering Criteria 5. Negotiate Keyword List & Processing 6. Coordination of any Vendor Testimony ESIProcessing Based on the Discovery Plan, vendor selection should consider amount and type[s] of ESI, the type[s] of processing planned, the time allowed to process it, and the amount of it that is expected to pass the filters to legal review. To facilitate the process, it is best to have standing Master Agreements with the vendor[s] of choice. The decision of who will manage the ED process is essentially important. Client-management is always best from a cost management perspective. The ability of the vendor to generate reports on the ESI as it is processed [the earlier the better], is essential. Always select vendors who can meet your needs in this regard. Of special importance is keyword hit reports that quantify the number and total volume of hits for each keyword. Once quantitative reports are generated by the EDVendor, decisions on filtering criteria can be made. Start with highly selective criteria and expand as needed, to assure hi responsive rates early to allow production to begin. This is especially important with keywords, which is why this was negotiated earlier in Phase 2. To the extent that burden or other arguments to limit processing of ESI are relevant, identify the responsible party early so preparation can begin.

24 Legal Review Key Considerations 1. Develop Review Plan 2. Single or Multi- Phase? 3. Contract Attys? 4. Review Platform[s] 5. Limited Review due to Clawback? 6. Prioritize Review per Rolling Production Agreement 7. Develop Privilege Log[s] LegalReview As soon as it becomes apparent what kind of volume of data will make it to legal review, decide how to proceed: Single review with Trial Counsel, or multi- review with initial review performed by lower cost alternatives. If contract attys are selected, several options exist: 1] Self-contracted, hourly 2] Specialty firm, hourly or unit rate 3] All-inclusive fixed price Selection of review platform is critical. If the file count is high [tens of thousands], conceptual-grouping platforms are proven to reduce cost significantly. Based on the perceived sensitivity of the document collection, consider producing without legal review, subject to a privilege claw-back agreement. Focus initial review on thelow-hanging fruit so production can begin early, minimizing complaint from the requesting party. This gives more time to cull subsequent productions. Many EDV hosting platforms can auto- produce privilege logs for files so-coded during review.

25 Production Key Considerations 1. Coordinate Productions perRolling Agreement 2. Confirm Authentication 3. Oversee and Log Productions 4. Audit E-Discovery Vendor QA/QC Processes Production Having negotiated the form of production in the Meet and Confer, the ED vendor can generate the production[s] during normal hours, and not the usual weekend 24/7 panic blitzkrieg, for which premiun charges apply. This also allows time for proper QA to confirm redactions, privileges, etc. Having negotiated a protocol for production of native files, the EDV can generate the production accordingly, along with the cross-reference file with the authentication code [e.g hash values]. Depending on the size and schedule of the productions, stay vigilant as to the schedule to avoid last-minute surcharges. Be sure your EDV is maintaining timely QA on the process. This tends to get behind and can create delays and last-minute problems.

26 RECAP - Client Best Practices Essential In-House Requirements Enterprise Records Policy What ESI must be retained & why, for how long? IT Resources Information Detailed description of IT resources, both hardware and software [Data Map] Where within the Enterprise the Records are maintained What are operational policies and backup protocols? Note special systems [IM, TM, VM, VOIP, etc] What are vulnerabilities of systems to loss of ESI? Assets tracking capability, esp. for departing employees Preservation Capabilities Identification of Key Players Publication of Preservation Notices Suspension of selective data destruction activities Understanding of privacy laws for foreign ESI

27 RECAP - Client Best Practices Important Decisions and Considerations Which activities will be performed in-house? Resources to perform them? Who will publish Litigation Holds? Who will perform management oversight of E-Discovery? Who will develop 26[b][2][b] arguments ? Who will engage E-Discovery vendors? Who will perform first level Legal reviews? Would a Discovery Counsel make sense? Who will provide 30[b]6 testimony? Who attends Meet & Confers? Who will attend Rule 16 Conferences?


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