5 Ways Counsel Can Reduce Risk for Corporate Clients

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May 22

The recent development in the aftermath of the BP oil spill brings to light what counsel--both in-house and retained--can do to minimize corporate clients’ exposure during internal investigations and litigation.  Last week, it was reported that a former employee of BP was indicted for destroying text messages relating to the very relevant events that occurred during the internal investigation that followed the BP fire and oil spill.  It was reported that BP sent numerous notices to the employee requiring him to save all information concerning the well, including his text messages.  According to the complaint, however, he allegedly deleted about 200 text messages in October 2010 and 100 other messages in August 2011.  Many of the messages related to the sensitive issue of how much oil was flowing from the underwater leak. The effect of this disclosure could significantly re-shape liability and damages relating to existing litigation.  
In industries that frequently face the specter of liability, what can corporate counsel do to protect its client from self-inflicted wounds like those being suffered by BP?  Here are five ways corporate counsel can help its clients reduce risk.
1. FULLY IMPLEMENT DATA RETENTION POLICIES:  Data Retention/Destruction policies are commonplace in corporate America—adherence to them is another story.  Between confusing destruction schedules, and data stored in disparate drives and applications, retention policies frequently fall by the wayside.  Large volumes of ESI stored in multiple locations can blow up a litigation budget in little time.  Corporate counsel can assure compliance and head off potential headaches when litigation occurs by regularly monitoring and auditing retention policies.  Make sure destruction and preservation policies are followed and that ESI is stored in mandated drives and applications.  If policies are not being followed then find out why and get the policy back on track.
2. CREATE LITIGATION RESPONSE PLANS ("LRP"):  LRPs are probably at or near the top of every Chief Risk Officer’s list of to-do items but budget concerns frequently take precedence. LRPs are often relegated to next year’s budget.  A properly constructed plan can annually save a corporation facing heavy levels of litigation millions of dollars in litigation costs.  LRPs provide counsel and corporate IT with a roadmap in the event of litigation.  The plans should identify the location of ESI, key information stakeholders and proper protocol for preservation and collection.  Instead of blindly searching for relevant ESI while simultaneously preserving what opposing counsel may request, a LRP can help your client mange the process for more cost efficient results.
3. MONITOR THE LITIGATION HOLD POLICY:  Every good LRP starts with a litigation hold policy that is both comprehensive and diligently monitored.  The reason for the indictment in the BP matter was not the failure to issue a litigation hold—BP timely issued a hold.  It was the failure to monitor and follow up the policy.  That is, it appears that after the hold was issued BP counsel either failed to make sure the hold was being followed by relevant custodians or they failed to preserve electronic media that should have been preserved shortly after the hold was issued—i.e. the text messages of a member of their internal investigation team.  If litigation is ongoing, then it is vital for counsel to regularly go back to relevant custodians and re-fresh the original collection until all matters are settled.  A failure to re-fresh the collection and update the hold can result in highly relevant data being inadvertently destroyed post-incident.  Furthermore, the policy should include the universe of relevant data that is not often found on the desktop--social media websites, backup tapes, cloud applications, Blackberries, iPhones and removable storage devices-- should all be part of any credible litigation hold policy.
4. COORDINATE COLLECTION STRATEGIES:  A coordinated collection strategy can ultimately save review time and production costs if done with an eye toward the final production.  Without a plan, however, production costs can escalate due to the need to re-collect ESI based on opposing counsel’s requests. If ESI is not collected per production requests from opposing counsel—i.e. no metadata was collected or the metadata fields were altered by the collection team--then a costly and time-consuming re-collection could be ordered by the court. Collections often involve multiple types of electronic media, far-flung custodians and myriad custodian-created obstacles.   Simple collections of one or two hard drives may be self-collected without much risk but the more complex the collection the greater the risk for error and subsequent re-collection.  Whatever means of collection is chosen, it must follow a valid chain of custody based on a legally defensible process.
5. SHARPEN THE COLLECTION:  Collections are typically overbroad on purpose.  It is more efficient to broadly collect once than to incur the costs for multiple collections that were initially too focused.  The primary function of the culling stage is to filter down the large universe of ESI into a manageable and reviewable dataset.  In short, filter out as much of the irrelevant data as possible (without cutting into relevant data) thus streamlining the review process.  Date range culling, application of search terms, and file-type filtering are just a few of the ways to effectively cull down the universe of collected ESI. Successfully implementing culling strategies can narrow a relevant ESI set by more than 80 percent and save millions of dollars in review time, production costs and storage fees. 
The courts have made it clear that corporate clients and their counsel now share the risks associated with developing a coordinated discovery plan.  It is in both parties’ interests to share the risks by developing and monitoring strategies that reduce the risks while building repeatable efficiencies.  That type of coordination will keep your corporate client off of the front page. 

David S. Weber is General Counsel for Digital Discovery (www.digitaldiscoveryesi.com) and serves as a computer forensics consultant and eDiscovery expert to corporations and law firms.  He can be reached at dweber@digitaldiscoveryesi.com