Come December 1st, 2006, the legal world will be formally introducted to the Digital Age.  According to one Partner identified in the National Law Journal’s recent article, “everybody is a little terrified” of the change in the Federal Rules of Civil Procedure.  Electronic discovery is, of course, of particular concern for many General Counsels, in house executives, and law firms alike.

While the previous rules of Civil Procedure were somewhat unclear on electronic discovery, the updated rules are much more specific and offer significant guidance.  Electronic discovery is now a distinct category of discovery with two internal tiers.  Electronic information is either reasonably accessible or inaccessible due to an undue burden of retrieval.  To claim the latter requires a party to provide substantiated evidence of the undue burden, which the court may subsequently disregard and require production regardless.

One headache many attorneys are foreseeing is rule 26(f), which requires parties to “discuss any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced.”   All of this is required to happen 21 days before the first scheduling conference, thereby adding a lot of stress to an already stressful period.

According to one attorney in the National Law Journal’s article, “case law is now mandating that attorneys understand their client’s backup system, so they will understand what data is where and what steps must be taken to preserve evidence.”
The importance of the new rules of Civil Procedure is not lost on us at Symagio.  As we mentioned in our previous posting, companies are now liable to produce all of their electronic information (excluding privileged and attorney-client products), regardless of their form or location.  That means the backup tapes you store in your employees basement from ten years ago would likely be required for production under the new rules.  Fully understanding, simplifying, and managing your backup plan is smart for a number of reasons, with legal liability chief among them. 

The way we look at it, many companies have two choices.  They can continue in their haphazard backup procedure, or they can work with a remote, disk to disk based online data backup solution.  The former might be adequate for many, but the risks of liability are simply enormous, especially in light of the upcoming change in the Rules of Civil Procedure.  Not only is it a smart business strategy to product your important electronic information, but the liability of inadequate protection would likely bankrupt many operations. 

Ours is a nation of laws and precedent -and these have far-reaching ramifications in even the most remote field.  In data backup, the flagship case is the March 2005 ruling in Coleman v. Morgan Stanley in Florida’s Circuit Court.  (You can find an excellent summary of the case on LexisNexis here). 

The Court’s rulings were extensive and significant for many reasons, including the substantial damages awarded. the Court issued a ruling on March 1, 2005 that found a number of abuses in the process of discovery - the part of a legal battle in which each party goes through their documents looking for information relevant to the lawsuit.  LexisNexis summarizes the abuses below: 

• Morgan Stanley’s undisclosed awareness at some point prior to May 6, 2004, of 1,423 backup tapes that had not been processed for inclusion in the Morgan Stanley archive to be searched in completion of the production on May 14, 2004;
• Undisclosed discovery in 2002 of 738 eight-millimeter backup tapes with email dating back to 1998 and lack of processing of those tapes to include their contents in the Morgan Stanley archive to be searched in the course of completing the May 2004 production;
• Presence of unsearched data in Morgan Stanley’s archive system;
• Discovery of 169 DLT tapes in January 2005;
• Discovery of more than 200 additional tapes on February 11 and 12, 2005;
• Discovery of a “script” error in Morgan Stanley’s in-house program to search its archives that prevented Morgan Stanley from locating responsive email attachments; and
• Discovery by Morgan Stanley on February 13, 2005, of a “script” error that affected the gathering of email from users of Lotus Notes (mostly employees of Morgan Stanley’s Investment Banking Division, according to the Court’s March 1, 2005, adverse inference Order, at p. 8 ) that resulted in at least 7,000 additional email messages that appeared to be responsive under the Agreed Order but had yet to be reviewed fully for responsiveness and privilege.

What does this mean for your business?  Among other things, every business is responsible for keeping their records and backups.  What’s more, those backup tapes you have forgotten about could very well contain pertinent information that a Court could require you to produce, irrespective of the costs or reliability of the media.  In the September, 2005 edition of LawPro Magazine, they estimated the costs to restore the data from a single tape stored offsite to be as high as $3000 per tape. If your business ever found itself in such a situation, wouldn’t it be much better to have reliable, unlimited restores from an online backup provider than sort through hundreds of old unreliable tapes? 

Emergency preparedness is all over the news these days, which is a great thing.  At Symagio, we believe many businesses are unaware of the necessity for disaster recovery planning.  In the much-read law.com, there was an excellent article called In Case of Emergency.  Here’s our favorite excerpt:

“A company must protect records. Many companies back up their data. That’s a good thing. But, all the back-ups in the world won’t do a company any good if they’re several years old or if they’re stored in the company’s office building when it burns to the ground. Make sure back-ups are updated frequently and stored in an off-site location especially constructed for data and record storage.”

This has become a mantra for us at Symagio, and is one of the reasons we’re so fanatical about disk-to-disk backup.  Tape drives, we believe, are more likely to be left behind, more likely to be forgotten on-site, and are just a hassle.  How many times have you forgotten your car keys, your lunch, that piece of paper you needed?  All too often … so backing up with tapes, we believe, is an invitation for human error to get in the way of your disaster recovery plan. 

Take the time to read the whole article - it really is excellent.  And when these topics come to the forefront of every General Counsels mind, everyone is better off.