FRCP Still Posing Challenges

It's almost a year to the day since the U.S. government overhauled the Federal Rules of Civil Procedure (FRCP) in an attempt to streamline the country's legal system. So what better time to take a look at how enterprises are dealing with the technology implications of FRCP?

The rules themselves comprise 60 pages of legalese, but the gist is that corporate lawyers must not only produce electronic documents in the event of litigation, but produce them as part of the pretrial process. If they fail, a judge can slam a company with sizable penalties.

For IT managers and CIOs, this means a serious rethink of how data is both stored and retrieved. Increasingly, firms' IT staffs are finding themselves at the forefront of legal disputes, particularly when faced with a "legal hold" request to prevent key emails and files from being deleted.

"Everyone has to contend with the fact that information is recorded and transmitted in electronic format," says Tom Allman, former general counsel of BASF, and co-chair of Lawyers for Civil Justice, which advocated for the amendments. "My belief is that there has been a gradual but important change in peoples' attitudes."

A survey of legal trends by law firm Fulbright and Jaworski released earlier this year appears to bear this out, revealing that 89 percent of U.S. firms now have legal hold policies in place, up from 76 percent just two years ago.Other indications nonetheless suggest that many firms are still struggling with some of the technology aspects of the FRCP amendments.

Dragging Their Feet

Even one year on, a large number of enterprises are still not where they need to be with regard to the FRCP amendments, warns Rick Chin, senior vice president of IT at Orlando, Fla.-based financial services company Pinnacle Financial.

"My experience of talking to other IT managers is that the vast majority of them are not ready for this at any kind of level," he told Byte and Switch. "I would say that a lot of people haven't acted on this yet, and opened themselves up to a lot of risk."

The exec explained that, the timing of the amendments, right at the end of 2006, came at a bad time for many organizations. "A lot of people were at the end of a budget year, and were not able to act quickly," he says, adding that Pinnacle avoided this by starting its FRCP work early."We started looking at email archiving before the amendments to FRCP," says Chin, explaining that Pinnacle is now using hardware from Mimosa to archive its email.

Apparently, not all users have been as proactive as Chin and his team. "We're seeing forward progress and momentum, but, overall, companies are not ready for this legislation," says Alan Armstrong, vice president of business development at archiving vendor Fortiva.

To illustrate his point, the exec highlighted thefindings of a recent survey by Fortiva, which revealed that a surprising number of firms are either unwilling or unable to get to grips with the realities of e-discovery.

"One in five companies have settled lawsuits because they didn't want to go through the headache and cost of discovering information," says Armstrong, painting a fairly negative picture of users' e-discovery capabilities.

Worryingly, many of the 90 firms surveyed by Fortiva are also taking a cavalier approach to how they manage the issue of legal hold. "Forty-three percent of the respondents were relying on end-users to refrain from deleting emails when they were required to put out a litigation hold," he says. "Relying on the good nature of people who may be under investigation is not good common practice."From Laptops to Tape

"One of the biggest challenges of the FRCP amendments isn't so much the challenge of getting data from enterprise servers, but the challenge of getting information from desktops and laptops," says Nicole Egan, chief marketing officer at e-discovery vendor Autonomy. "Often-times, the folks named in litigation tend to travel a lot, so it's difficult to put a legal hold on traveling laptops -- it's a big pain point."

The exec described the situation at one firm, which sent a small army of IT staff around the U.S. to implement a legal hold. "In one extreme case, 300 people were put on planes to take images of desktop and laptop hard-drives."

"We still see a large amount of organizations out there trying to meet the presentation request [for information] by ceasing to recycle their backup tapes," says Dave Campbell, senior product marketing manager of Symantec's Enterprise Vault division.

In a survey of some 450 IT professionals earlier this year, the vendor found that almost 70 percent of firms were keeping hold of their backup tapes for longer than they would normally, in case of a legal dispute."It takes away from IT efficiency if a firm can't re-use their backup tapes," says Campbell, adding that tapes are also difficult and expensive to search when it comes to e-discovery. "The cost that we see to restore a single backup tape for e-discovery can be between $3,000 and $4,000 per tape."

Bring data into an archiving system specifically designed for e-discovery is a much more cost-effective option, according to Campbell.

Symantec, of course, is one of a number of vendors playing in the e-discovery space, but at least one user is sold on e-discovery archive technology. Pinnacle Financial's Chin told Byte and Switch that he has managed to free up space on his mail server by deploying the archiving system.

"A lot of people find that, after six months, their nightly backups go faster, and the reliability of their mail server increases," he says.

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