The Power Of Automated Early Case Assessment In Response To Litigation And Regulatory Inquiries

Sunday, March 1, 2009 - 01:00


With the United States government mapping a course for the nation's financial system, increased regulatory and law enforcement scrutiny is likely to ensue, with the inevitable result being an increase in regulatory investigations and resulting litigation. By all accounts this trend will pick up steam throughout 2009 and extend for many years thereafter. Or, as the October 2008 edition of The Economist reported,

In today's political climate, the government will feel immense pressure to put a few moneymen in the dock. The FBI alone is probing more than two dozen firms. Market regulators, state attorneys general and the Department of Justice are also jostling to unearth wrongdoing, sifting through e-mails and seeking whistle-blowers at firms

Before the days of overwhelming volumes of electronically stored information (ESI), the strategy to respond to litigation or a government subpoena would be to collect and/or recall paper documents sent to off-site storage, secure them in a conference room to conduct some interviews and let the document review process begin. In more recent years, the strategy would be to find someone in the IT department to assist you in finding data that you are not even sure is relevant before calling in high-priced consultants to make forensic images of company computers and servers through forensic collection techniques.

These traditional "reactive" approaches are filled with inefficiency and inaccuracy overlaid upon a minefield of cost explosives. The good news, however, is that there are now technologies and processes that can help enterprises effectively respond to these types of situations. Because the preservation of responsive information and the ability to quickly review data to assess the merits and risks presented by a case is paramount in times of crisis (i.e. litigation or regulatory investigation), enterprises need to consider a refined in-house process and technology tool set to reduce risk and costs.

Issuing And Managing Legal Holds

The initial steps in an investigation are the most crucial as they set the tone for the entire process, and can often mean the difference between victory and a detrimental outcome. Immediately after being served with a lawsuit or subpoena or becoming aware of wrong-doing through trigger events such as a whistle-blower letter or ethics tip, a response team should be assembled within the legal department to perform the following activities:

• Review the lawsuit, subpoena, letter or tip for key facts and allegations.

• Identify individuals and business units that are either relevant to the proceeding or might have relevant ESI (often called "custodians") and remember to constantly update the custodian list as there may be new hires, departures and transfers.

• Determine where potentially responsive information is located; do not forget off-site locations.

• Identify the IT Department and business "owners" of the systems with potentially responsive ESI.

• Contact the system owners to ensure that backup tape recycling of systems of interest is suspended.

• Prepare a preservation notice to be issued by someone of authority in the Legal Department.

• Schedule and conduct custodian interviews to gather facts, determine the existence of responsive information and reinforce the preservation requirements. In-person interviews allow you to see body language, and interviewees are usually more forthright when discussing issues in person.

• Schedule and conduct system owner interviews to more fully understand the technology and data, and use this time to reinforce the preservation requirements.

• Continually explore for overlooked sources of potentially relevant information such as instant messages, legacy or retired systems, external storage devices and/or offsite data backup services.

• Document efforts as they occur as it is often difficult to remember what was done many months later.

True Early Case Assessment

Historically, there was not much time to conduct any sort of analysis of the ESI at the outset of a case (referred to as "early case assessment") using the outsourced model. In response to corporate counsel's desire to quickly evaluate the merits and risk presented by each case, in-house enterprise tools have been developed to conduct in-place early case assessment, collection, processing, culling and preservation. The result: far deeper insight into a proceeding from the very outset, as well as a far more cost-effective process.

Early case assessment has always been on the wish list of in-house investigation teams and corporate counsel alike. As a result, the phrase "early case assessment" is being used quite frequently these days but without a common definition or even a common understanding as to its meaning. True early case assessment requires the ability to begin analyzing, assessing and even reviewing ESI within hours of being served with a lawsuit or subpoena, in the process gaining immediate knowledge about the following key elements of the case and how they relate to the facts in the matter at hand:

• Data sources and location;

• Custodians and business units;

• Key terms and phrases such as code names;

• Date ranges; and

• Relationships (i.e. the breadth of an issue) and communication patterns.

True early case assessment does not involve sending enterprise ESI to an outsourced processing and hosting supplier before starting to review ESI remotely in order to assign document review to a team of attorney reviewers many weeks after the subpoena or lawsuit is received.

When working with a technology vendor or service provider, ask what they mean by "early case assessment" in order to see if it fits within your company's requirements. Again, the basic goals when conducting early case assessment are to quickly (i) ascertain the facts and judge the potential risks to the company; (ii) estimate costs that will be incurred as the matter progresses to assess potential settlement options; and (iii) determine the presence of potentially relevant documents or data that require in-place review, collection and possible preservation. As we have seen recently, complying with the duty to preserve remains a significant issue for companies as the courts continue to impose sanctions ( Arista Records, LLC v. Inc. , 2009 WL 185992 (S.D.N.Y. Jan. 26, 2009)).

The following best practices could be employed by an enterprise with the appropriate in-house solution:

• First, a matter would be created to document and track the people, data sources, and collection and notification activities that are investigated and/or pursued.

• Next, the in-house system would be reviewed for previously collected data that could be leveraged for the matter at hand in order to avoid duplicative collections. This alone is a powerful tool because the review team could begin reviewing this already preserved data immediately and avoid costs and business interruptions caused by unnecessary further collections.

• For data that has not already been collected, i.e. from a custodian's desktop computer, the team could create new data sources or custodians and then conduct remote collections.

• For previously collected data that is incomplete for the matter at hand, a collection of the remaining data (i.e., the delta) could quickly be scoped and implemented to expedite the collection process.

This Is Not Your Father's Search Engine

Enterprises should look for in-house systems that have fully integrated and robust search and analysis capabilities in order to identify, organize and review data in an expedited and useful manner. By now, most corporate counsel is familiar with tools that can conduct keyword searches using Boolean syntax. At a bare minimum, this type of basic search functionality should be included in any enterprise's in-house system. More sophisticated systems will also include conceptual search and conceptual grouping technology which can dramatically expedite the speed and accuracy of the early case assessment process.

Information can also be explored using filters to automatically cull and categorize the data. For example, data that is likely non-responsive (such as spam email and system messages) can be automatically excluded from the review population through the use of file-type filters to set aside emails from domains that are likely irrelevant, such as The results can then be bulk coded as likely non-responsive and set aside to be sampled or fully reviewed later by a lower-cost resource. Again, this is now a minimum requirement of many experienced corporate counsel.

Today's corporate legal and investigative departments need and want more. In-house enterprise tools have matured to the point that keyword and phrase searching is only the tip of the iceberg in terms of basic analytics. Enterprises should now demand tools that allow for full conceptual searching capabilities, concept grouping without the need for large taxonomies or thesauri, relevance probability reporting and automated false negative identification. For example, the ability to find related documents regardless of the presence of keyword terms using an automated one-step function is a powerful tool and now available. If only keyword search terms are used to locate relevant documents, what happens if the search terms are under inclusive and/or are not even contained in the document? The answer is that potentially relevant ESI is overlooked. The more precise approach would be to use a combination of keyword and phrase searches in conjunction with full conceptual searching. Having a tool that can differentiate and group documents based on substance and context is powerful. A tool that can understand conceptual meaning such as differentiating between equity "trades" and fantasy football "trades" provides focus and precision to your analysis.

Advanced search and categorization analytics will not only help an enterprise locate key documents quicker, but will also provide a more accurate and cost effective early case assessment. The ability to quickly find and group documents that are substantively similar allows corporate counsel to see context and structure their analysis accordingly. This is a dramatic improvement over the standard linear review process to conduct early case assessment. The delays caused by the traditional collection, processing and review activities would force the team to review whatever ESI they could get their hands on first without regard to context or priority, with the result being a "heads-down" linear review.

Jason Robman is Director of Legal Solutions and Corporate Counsel at Recommind Inc., an enterprise search, e-discovery and e-mail management software company headquartered in San Francisco, CA. Jason provides market strategy and positioning, messaging, lead generation, channel development/marketing, pricing, strategic alliances, international and domestic distribution, contract drafting, review and negotiation, international law, and corporate law. Jason is also a member of the EDRM Project (Search Sub-Committee).

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