[Infowarrior] - New rules compel firms to track e-mails

[Richard Forno]

 New rules compel firms to track e-mails

Fri Dec 1, 6:25 AM ET

http://news.yahoo.com/s/ap/20061201/ap_on_hi_te/storing_e_mails&printer=1

U.S. companies will need to keep track of all the e-mails, instant messages
and other electronic documents generated by their employees thanks to new
federal rules that go into effect Friday, legal experts say.

The rules, approved by the Supreme Court in April, require companies and
other entities involved in federal litigation to produce "electronically
stored information" as part of the discovery process, when evidence is
shared by both sides before a trial.

The change makes it more important for companies to know what electronic
information they have and where. Under the new rules, an information
technology employee who routinely copies over a backup computer tape could
be committing the equivalent of "virtual shredding," said Alvin F. Lindsay,
a partner at Hogan & Hartson LLP and expert on technology and litigation.

James Wright, director of electronic discovery at Halliburton Co., said that
large companies are likely to face higher costs from organizing their data
to comply with the rules. In addition to e-mail, companies will need to know
about things more difficult to track, like digital photos of work sites on
employee cell phones and information on removable memory cards, he said.

Both federal and state courts have increasingly been requiring the
production of relevant electronic documents during discovery, but the new
rules codify the practice, legal experts said.

The rules also require that lawyers provide information about where their
clients' electronic data is stored and how accessible it is much earlier in
a lawsuit than was previously the case.

There are hundreds of "e-discovery vendors" and these businesses raked in
approximately $1.6 billion in 2006, Wright said. That figure could double in
2007, he added.

Another expense will likely stem from the additional time lawyers will have
to spend reviewing electronic documents before turning them over to the
other side. While the amount of data will be narrowed by electronic
searches, some high-paid lawyers will still have to sift through casual
e-mails about subjects like "office birthday parties in the pantry" in order
to find information relevant to a particular case.

Martha Dawson, a partner at the Seattle-based law firm of Preston Gates &
Ellis LLP who specializes in electronic discovery, said the burden of the
new rules won't be that great.

Companies will not have to alter how they retain their electronic documents,
she said, but will have to do an "inventory of their IT system" in order to
know better where the documents are.

The new rules also provide better guidance on how electronic evidence is to
be handled in federal litigation, including guidelines on how companies can
seek exemptions from providing data that isn't "reasonably accessible," she
said. This could actually reduce the burden of electronic discovery, she
said.