In business litigation, the war is not only fought in the battlefield of the courtroom, but in the trenches of discovery. This includes the voluminous amount of potentially relevant documentary evidence that each party must assemble, organize, review, and deliver to the other side. For a long time, that meant key employees and attorneys had to spend hours, days, or weeks sifting through countless file cabinets and banker’s boxes, often in multiple locations, reviewing equally countless pieces of paper page by page.

Today, however, the documents that matter most may never have seen a filing cabinet. Emails, text messages, spreadsheets, instant messages, databases, cloud-based documents, collaboration platforms, and other forms of electronically stored information (ESI) are now where businesses look for and find the evidentiary weapons or shields that can play a central role in determining the outcome of a dispute. Accordingly, e-discovery tools and platforms such as Relativity, Casepoint, and Everlaw have become essential for helping lawyers and businesses identify, preserve, collect, review, and produce relevant ESI efficiently. 

But attorneys’ use of e-discovery technology is not the first litigation touchpoint for ESI. Rather, a company’s existing information governance and preservation practices and policies can determine whether the discovery process proceeds efficiently and without incident or results in potentially damaging and costly missteps.

Business owners and executives should therefore understand how e-discovery is used in commercial litigation and which best practices to adopt to reduce risk and increase the likelihood of a positive outcome in pending or anticipated disputes.

How Lawyers Use E-Discovery in Business Litigation

As noted, e-discovery generally refers to the process of identifying, collecting, preserving, processing, reviewing, and producing ESI in connection with litigation or other legal matters. Modern e-discovery platforms use technology to manage enormous volumes of data that would be impractical to review manually.

For example, e-discovery software can quickly collect data from multiple sources, including employee email accounts, company servers, cloud storage platforms, and collaboration tools. The software can then index the data, remove duplicates, search for relevant keywords, and identify communications involving particular individuals, events, transactions, or time periods.

More advanced technologies that leverage AI can further reduce the burden of document review and help lawyers identify potentially relevant documents, set aside non-responsive ones, flag documents that may be privileged or otherwise confidential, group similar communications, and prioritize materials most likely to matter to the dispute. These technologies do not eliminate the need for attorney oversight. They can, however, significantly reduce the number of documents requiring time-consuming manual review and make finding a needle in a haystack a less daunting proposition than the metaphor suggests.

The earlier counsel and the business understand where relevant information resides and how it can be collected, the more efficiently the discovery process can proceed.

What ESI Do You Have and Where Is It?  

Battles can be won or lost before the first shot is fired, and the same applies to business litigation and e-discovery practices. The most effective e-discovery approaches are adopted well before a lawsuit looms on the horizon. Businesses sometimes treat preservation and data collection as issues that can be handled after the litigation has progressed. By that point, relevant information may have been deleted, employees may have left the company, and data sources may be more difficult and expensive to access.

By maintaining a complete inventory of electronic information, including where it is stored and how long it must be retained, a business will be able to quickly identify its relevant data sources, avoid unnecessary delays, and significantly reduce the attorney fees and other costs that must be spent on ESI collection and review after litigation has commenced.

How Long Do You Keep ESI? 

Businesses should also maintain reasonable record retention policies. These policies should address different categories of information and establish appropriate retention periods. Just as importantly, the policies should be implemented consistently. An overly broad policy requiring the indefinite retention of virtually everything can create an expensive discovery (and logistical) problem, while an improperly administered deletion policy can result in the loss of information that the business should have preserved.

Litigation Holds

“Spoliation” is the term for the intentional or negligent destruction, alteration, or failure to preserve evidence that may be relevant to a reasonably anticipated or pending legal case. This does not just mean deliberately running documents through the shredder or throwing them in a dumpster to avoid their disclosure. If the discovery process reveals that a company failed to preserve potentially relevant ESI when litigation was reasonably anticipated, a judge could impose damaging and costly sanctions or issue rulings that could seriously damage the ability to pursue or defend against a claim. 

As such, businesses should promptly work with counsel to implement a litigation hold once they become aware of a possible dispute. The hold should identify the categories of information that  must be preserved and the employees, departments, or other custodians who may possess relevant ESI.

A well-designed litigation hold is not a set-it-and-forget-it proposition; a one-time email telling employees not to delete documents, by itself, will not cut it. Businesses should also consider:

• Communicating clear, sufficiently detailed preservation instructions, including carefully defining the dispute and identifying the relevant custodians and systems.
• Suspending routine deletion practices, if necessary. 
• Identifying relevant data sources, including, potentially, personal devices, text-messaging platforms, cloud services, or other systems outside the company’s traditional network.
• Involving information technology professionals and connecting them with counsel early in the process. Legal counsel may understand what information is relevant, while IT personnel understand where that information is located and how the company’s systems operate. 

Preserving ESI Should Be SOP for Your Company

The failure to preserve relevant ESI can have serious consequences. As noted, depending on the circumstances, lost information can lead to discovery disputes, increased costs, court-imposed sanctions, or other adverse consequences in litigation.

The key for businesses is to act promptly and deliberately. Once a company reasonably anticipates litigation, it should consult counsel to determine what information it must preserve, its location(s), and which ordinary business processes it may need to suspend.

For many companies, their data can be a key asset, a driver of productivity and profitability. But that data, in the form of ESI, can also become a costly liability if handled haphazardly or without prudent planning, coordination, and effective information governance. Such practices should be standard operating procedure and viewed as a key risk-mitigation strategy, not an administrative burden.

If you have questions or concerns about e-discovery or your company’s ESI practices, please reach out to Jack O’Neal at Waldrep Wall.