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Galina continues, "The best motivator is personal experience. When the fines become significant enough, implementation will take place. In Europe, the regulations are in place, but the fines are insignificant. So they just pay the fine; it’s cheaper than implementing a solution. Because it’s not a question of just buying some software and rolling something out; it’s about changing processes and re-architecting the business, and they just don’t want to tackle all that."

Steve d’Alencon is "head of product marketing, I suppose," he tells me, at Kazeon. (Don’t sweat it, Steve, I can’t always describe my job, either. For the record, his title is VP product marketing.) Steve also describes his market as more reluctant than ignorant. "Nobody is not investing. That’s a bad use of double negatives, sorry, but we don’t see anybody completely avoiding the issue. It’s more a matter of ‘how much do I invest, and when?’ And it boils down to a ‘proactive’ versus ‘reactive’ characterization of e-discovery. It’s fair to say that nearly everyone is in the ‘reactive’ bucket. How do I respond, defend and remediate? That’s a tactical mindset, handling matters as they come over the wall," Steve insists. "This is opposed to the significant minority who takes a proactive perspective, which is How do I prevent, deter and detect to gain control of ESI?"

Which brings us to the question of "who decides?" "Sometimes there’s no clear leadership on how to do it, when to start, what kind of priority to place on it, and therefore it doesn’t get done," says Galina. "I don’t see C-level executives making the actual decision, but executives have to bless the decision. The executive level has to decide whether a records management policy is put in place, but they don’t draw it up. That’s up to a task force, certainly including the records manager, and the compliance manager if they have one. It has to be supported by the C-level, though, or ultimately it won’t get implemented."

Michele C.S. Lange is a product-line director for Kroll Ontrack...and an attorney. She has a more direct memory of addressing this issue: "I can remember seven years ago going into law offices, and having the door slammed in our faces when we tried to tell them that email is fully discoverable. Wow...what a difference seven years makes!" says Michele. Currently, she thinks, the problem lies with this shift in "ownership" of the ESI and discovery problem. "There’s no clear definition of who should be developing and enforcing policy," she says. "When large fines come into play, it moves from an IT issue to become a threatening business issue in which today’s executives and boards need to be involved. A survey we did shows that 20% thinks the CEO should be responsible for violations, and another 20% said that it should be the in-house legal team. That’s 40% who think the buck stops with the CEO or the senior legal team...so they both better be engaged, frankly.

"At any given time," continues Michele, "a Fortune 500 company is experiencing 125 non-frivolous lawsuits. Not having an ESI plan is like playing Russian roulette. It is a lose/lose situation. The stakes are too high. There are literally millions and millions of dollars, and reputational dollars, at risk to not take a few days to sit down in a litigation-readiness planning session."

Chris Kruse, president and CEO of CaseCentral, agrees. "It’s causing big changes, in terms of policy about how to use email, and how to handle sensitive situations. It’s front-and-center...and a lot of them have been burned by the misconstrued email or voice message that becomes the pivotal piece of evidence in the case. It absolutely has had a behavioral impact on the leaders of companies, and the way they want their employees to respond."

And, of course, the driver for this behavioral change has been more of a stick than a carrot. "Historically speaking, unless there is a monetary impact, compliance to regulation falls to the wayside. It took a high-profile case like Morgan Stanley to make people aware of SEC rules, for instance. Unfortunately that’s how some people learn," notes Matt from LiveOffice.

"And the person who has the most interest is the one in charge of litigation, so it’s the chief litigation officer, or the assistant general counsel in charge of litigation" who is left to make these extremely sensitive corporate decisions, according to Chris Kruse. "Because they are lawyers, and they understand and appreciate the importance of the change in the rules...plus they own the budget! Generally, these people are not IT-savvy technology people, but are realizing they need to become that. They need to understand what’s available to them. They’re getting a trial-by-fire, on-the-job education on what systems live in their enterprises they have to know about."

"And on that note," adds LiveOffice’s Matt Camassa, "don’t forget the CIO who has to balance between the IT work that’s essential to the operation of the company and that which meets compliance."

If there’s any central theme starting to emerge, it’s that the lines-of-responsibility that have traditionally defined the organization are blurred, if not totally erased. IT guys making strategic business decisions? C-level executives defining email and records retention policies? Soon, cats will start sleeping with dogs...wouldn’t surprise me.

Making the Risk/Reward Decision
It’s a crazy world. And it’s only getting more complicated. "Everyone is overwhelmed by the complexity," agrees Steve d’Alencon. "There are so many changes that are both subtle and significant. For example, Rule 26(a) requires that counsel understands the client’s information management systems, and can categorize and identify where any information resides that might be ‘potentially responsive,’ before a discovery order even takes place! I can guarantee you that most in-house lawyers don’t know what the heck to do about that! The IT shops have been concerned with providing IT resources to users. Now they have to figure out how to provide legal discovery of information that is ‘potentially’ responsive to a ‘possible’ discovery to a legal department, and deliver it in the form of data maps and locations."

To add to the chaos, there is an emerging subculture of predators who are just beginning to show their hides to the light of day. "E-discovery trolls—people who look for opportunities—are starting to come out of the woodwork," claims Recommind’s Craig Carpenter. "These are basically shake-down artists. Let’s say a fairly small lawsuit is for $1 million, but the e-discovery is going to cost $4 million...there’s a great deal of pressure to settle it, just to make it go away." And what do you say to the customer who is facing such a situation? "Obviously, I don’t recommend it; you set a precedent. You need to message to everyone that you’re not going to play that game."

If there weren’t such a cost differential between "doing it" and "not doing it," I suggest, maybe this kind of crap wouldn’t happen. Why is it so expensive? "It only costs a circuit board to store a gigabyte of information. But to have a junior attorney review it can cost $30,000...that’s where the whole problem is," says Johannes from ZyLAB. "This is one of the many reasons that technology is absolutely essential...not only to do reviews of very large volumes, but also to do it right. One of the big problems with manual review is that it will not be consistent. With a large review team, say 50 people, each person will have different interpretations. They will also have a different opinion on Monday morning from Friday afternoon. Consistency is something you can never reach with human beings, and that’s why search and categorization is so important. Only with information access technology can you remove duplicates, find near-duplicates and have almost 100% recall," Johannes insists. "There was a study in the ’80s. They asked a group of lawyers to review a collection of documents until they found 75% of the related documents. They spent a week, and thought they had done so. But theyonly found 20%. That’s why technology is absolutely essential in winning a case, and avoiding high costs during discovery."

Craig Carpenter agrees that technology is the main hinge-point for anyone facing a major e-discovery action, in terms of cost saving. "Conceptual search—where documents may or may not contain keywords, but have analogous wording and meaning—is particularly compelling in the discovery landscape. From a smoking gun aspect, that allows you early-case assessment right out of the gate.

"And autocategorization," he continues, "is another key technology. Instead of going through an entire collection of documents for ‘responsiveness,’ then another pass for ‘privilege,’ and a third pass for ‘relationship to issue,’ autocategorization allows you to review a small sample set of documents, code them appropriately and then essentially press a button and ALL documents, regardless of the size of the corpus, will be similarly coded."

Search is a key factor in managing ESI in a litigation, agrees Michele Lange from Kroll Ontrack, but warns that "we’re still a fragmented marketplace when it comes to moving content from a document management system all the way through to litigation...no one has put all that together," she says. "There are still a lot of hand-offs; there are still gaps between service providers and between technology platforms. We’re years away from a seamless process."

I had to ask, since ESI is the key arms dealer to the smoking-gun arsenals of the world, whether the "traditional" search or document management vendors have a shot at taking over the market from the litigation support or case management vendors that most lawyers have become accustomed to working with? "Search companies can provide access to information, but as a lawyer, I have to certify that I have everything, and am in 100% compliance with this obligation. And sometimes that means looking outside the document management system. As a lawyer, I’m on the line for sanctions; I’m not putting my name on a piece of paper unless I’m 100% sure that everything related to this case is in place," Michele answers. "A document management system is only as good as what’s been put into it. Some might be good, some might not be; until you get into the nitty-gritty, you just don’t know."