Companies Not Ready For E-DiscoveryCompanies Not Ready For E-Discovery

A new survey says companies and their in-house lawyers aren't prepared to meet legal discovery requests. And McAfee's recent hiccup shows that even big companies make mistakes.Fifty-seven percent of law firms surveyed say their clients aren't ready to find and produce information relevant to litigation. That's according to a survey from Oce Business Services. The results of the survey were announced today.

As for in-house counsel, only 39% say their companies aren't prepared for e-discovery. It's lower than outside counsel, but it's not an encouraging figure.

Of course, these figures aren't surprising. E-discovery is a complex process that contains lots of moving parts. There's lots of room for technological and human error. Even big, wealthy corporations that can hire legions of attorneys get tripped up in the process.

Just last week, McAfee ran into discovery snags in the trial of a former general counsel over stock options dating.

Lawyers for McAfee produced a small batch of relevant e-mails around 10 hours before the trial was scheduled to begin, prompting U.S. District Court Judge Marilyn Hall Patel to declare "Heads will have to roll."

Turns out contract lawyers had marked critical e-mails as not relevant. Ooops.

According to reports, McAfee reviewed terabytes of information for this case. Yes, that's terabytes with a "T."

This January, Qualcomm got smacked with an $8.5 million penalty because it bungled its own discovery of e-mail relevant to a patent lawsuit with Broadcom. As federal courts emphasize the responsibility of parties to conduct thorough discovery searches, more such mishaps are likely.

Here's another critical point: Much of the activity in the McAfee case occurred eight years ago. That means McAfee had to cough up e-mails written in 2000. If your company got slapped with a discovery request for eight-year old e-mail, would you be able to get your hands on it? How long would it take, and how much would it cost?

And e-mail is only one component of the discovery exercise. All kinds of financial records around stock options and compensation likely had to be found, boxed up, and shipped to the prosecution and defense lawyers.

What are the lessons here? Discovery is hard to get right, and easy to screw up. Reams can and will be written on how to manage the discovery process. A good place to start is EDRM.

We're also tracking this space closely: See this link, and keep an eye out for our enterprise search package next week. The Sedona Conference also has great resources. It's slanted to attorneys, but it doesn't hurt IT pros to be familiar with the legal issues.

And if your own company hasn't set up a retention/disposition policy backed by defensible processes, get IT and legal in the same room, pour the coffee, break out the whiteboard, and get to work.