IT will get the blame in the e-discovery game

Since this is the first anniversary of the Federal Rules for Civil Procedure [FRCP], I thought I would help light a fire under those companies that are still ditzing around, as we used to say in Brooklyn, about a solid ESI [Electronic Storage Information] policy.

In a survey conducted by Canvasse Opinion among in-house legal departments at 200 of the Fortune 500 companies, 18 percent of the attorneys said that IT has primary responsibility for the development of an ESI [Electronic Storage Information], aka e-discovery, strategy/policy within their organization.

Let me add that FRCP covers only litigation. Government regulations and ensuing investigations would more than likely make an even greater demand on e-discovery than the new Federal Rules, according to Kristin Nimsger, Kroll Ontrack president, the company for whom the survey was conducted.

The next statistic is even scarier. Asked who should be held responsible if their organization’s ESI policy strategy resulted in government fines, court imposed sanctions or damage to the company’s reputation, 9 percent of the in-house attorneys answered IT should be held accountable.

And what kind of dollar figures are we looking at that IT might be held responsible for costing the company?

Let’s see: $1.4 billion levied against Morgan Stanley, $253 million levied against Merck, and $29.2 million levied against UBS Warburg in litigations that required e-discovery of documents.

Yet, 76 percent of the responding attorneys believe that “inefficient ESI proce-dures” will have no financial impact or only a minimal financial impact on the organization.

A full 19 percent of the in-house attorneys from the F500 companies responding said that enforcement of ESI policies are an IT function, not a legal department function.

Nimsger makes the point that complacency on the part of IT leadership is not an option.

“IT thinks it is not their business and yet all of the data and policies that directly impact the risk are controlled by IT such as document retention, preservation, archiving and email management policies.”

Add that to the fact that a lot of lawyers will be pointing their collective fingers at IT, and the message is clear.

There is a lose-lose situation waiting to happen.

If your legal department, CEO, and board of directors aren’t taking an active role in helping to define an ESI policy, the CIO and the IT department must take the leadership role in getting something done.

Whether IT and the CIO take that role or not, if something bad happens, it is going to be blamed anyway.