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Study Addresses Electronic Storage Best Practices

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The prestigious Advanced Practices Council just released a study that was not intended for lawyers, but which litigators and in-house lawyers should understand. We summarize the recommended best practices, explain why most Information Lifecycle Management applications fall short, and tell you why many lawyers should care.

The prestigious Advanced Practices Council (a unit within the Society of Information Management) recently released a report entitled “Information Lifecycle Management Concepts, Practices and Values". The report is based on a year-long study of 345 IT and storage managers. It provides worthwhile insights for anyone endeavoring to develop better electronic storage practices.

Why should lawyers care?

The explosion of the volume of data being stored creates major problems (and opportunities) for lawyers. This data explosion occurs for a variety of reasons, including (i) a lack of consistent policies about
what to keep, (ii) uncertainty about what needs to be kept for legal and regulatory purposes, (iii) storage devices that can hold vast volumes of data more affordably, (iv) data stored on multiple personal and mobile company devices; and (v) new data mining and data analysis tools that create the hope that old data will have new uses.

In this environment, the study demonstrates:

1. Legal issues drive most of the valid reasons for increased storage. Consequently, the legal function should control the storage policies and implementation, with obvious support from operations and technology personnel. The study (at least indirectly) supports this position.

2. For litigators seeking production from an opponent, current storage challenges ensure that e-Discovery will continue to be a treasure trove of enlightening documents.

3. For lawyers responding to e-Discovery demands, storage redundancy and duplication explain why identifying and producing all relevant documents is so difficult. Numerous court cases have generated serious sanctions when legal counsel and their clients did a poor job in this area.

4. Discovery is the source of most litigation costs. In-house lawyers attempting to manage litigation budgets must address the proliferation of unnecessary but “cheap” storage that the rest of the organization maintains. The study provides insights regarding how this can be done.

Study Highlights

The study includes the following advice:

1. Focus on information value

Technological advances make it easier and more efficient to use technical means to store increased information. However, management needs to focus on business risk, legal compliance, and business continuity to ensure that data is stored because it is valuable – not just because the short-term costs make it easy to do so.

2. Focus as much on discarding data as storing it

The majority of companies have inconsistent and incompatible policies for discarding information. Even when the policies are sensible, the realities of multiple copies, backup copies, and archival copies make policy implementation difficult. Much of this data is no longer needed. Accordingly, more attention is needed to create policies that encourage discarding no-longer-needed data.

3. Initiate Information Lifecycle Management (ILM) software through policy and people, not technology

Without line management involvement and support, ILM solutions will not work. ILM must occur through policies, by people, with the support of technology, in that order. Technology solutions alone are a waste of money.

4. The primary storage drivers are compliance, legal discovery, risk management, and data retention

Notice that most of these cost drivers are legal related. Consideration of these legal requirements must be a part of any document/data retention program.

5. Emails value is user, not enterprise; defined

Email is unique and difficult to manage because individual users define value in this application. Studies consistently show that users are reluctant to discard old emails because they are a not just a means of storage, but also a means of archiving project work.

6. Application-specific implementations can disrupt enterprise-wide initiatives

ILM’s vision may be enterprise-wide, but short-term needs cause work groups and divisions to deploy application-specific solutions. To be successful, ILM initiatives need to address storage needs of these work groups and divisions.

7. Implement tiered storage practices

Not all information has equal value, and the value of that information changes. Tiered storage practices (i) speed technology resources by placing less valuable data on different storage media, and in different places, and (ii) catalog data earlier so that it can be moved to this less active storage. Data that is not changing frequently also can be backed up on different cycles, which speeds backup routines.

8. Review e-Discovery preparedness

As electronic discovery becomes more prevalent, systems need to consider the ability to efficiently respond to outside requests. There are no real savings from avoiding the personnel costs associated with organizing needed data, and discarding unneeded data. Any such hoped-for savings will instead be spent (plus more) when responding to outside requests.

The Problem with ILM Software Solutions

ILM provides technical (software and hardware) assistance that can speed processing time and reduce costs. Understandably, ILM vendors generally focus on selling their products, and do not appropriately address the human aspects of how their hardware and software will be employed once the product invoice is paid. Because ILM is usually applied as an incomplete solution, most ILM projects fail to meet their potential.

Most IT managers have the mindset that storing more data is “safer” … “just in case”. Most ILM vendors cater to this mindset by convincing IT managers that they can store more data with the same (or even a reduced) budget. This is a false economy because it ignores the legal-related costs that are in someone else’s budget.

Automating a mess will only create a faster mess. More important savings occur when the enterprise (i) reduces the storage by eliminating that which is duplicative and/or no longer needed, and (ii) changes end-user behavior to comply with policies that already exist but are not enforced. These tasks are much more difficult than purchasing an ILM product. However, this must be done in today’s current environment where hardware and software are a small piece of the total records storage cost.

See Electronic Discovery Best Practices for additional recommendations in this area. See Substantially Reduce Electronic Discovery Costs and Special Masters and Court-Appointed Experts Save Electronic Discovery Costs for advice once a litigation hold is already in place.

David E. Nolte has 30 years experience in financial and economic consulting. He has served as an expert witness in over 100 trials. He has also regularly served as an arbitrator. Mr. Nolte has achieved the following credentials - CPA, MBA, CMA and ASA.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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