Editor: How are today’s communications tools adding to the volume of electronically stored information (ESI) and changing the way investigation and enforcement actions take place, both in the U.S. and abroad?
Mack: Law enforcement worldwide has been swinging to the stricter side of the pendulum, while the technology available to enforcement agencies has become more sophisticated. For example, there are apps on various smartphone devices that track your movements, and the explosion in investigative tools includes the ability to track people’s locations as they move about with their cell phones. These enabling platforms create a much higher visibility and transparency of meetings between people – the kinds of meetings depicted in the show Mad Men, where backroom deals made in private are harder and harder to have without leaving an electronic trail. Even in undeveloped countries, cell phones are ubiquitous.
The government just issued an RFP for a system to monitor social media. Since social media is public, government monitors have the capability of seeing patterns of behavior of either groups or individuals – and that’s on a massive scale.
The trail left by these new tools, of course, comes into play for not just law enforcement, but for internal corporate investigations and e-discovery.
Editor: What about the redaction of personally identifiable information to help protect privacy?
Mack: Countries outside the United States are much more advanced in protecting individual privacy – it’s not only a practice, it’s actually a law. In some countries it’s criminal to release personal information. Even in the U.S., most companies redact personal information simply because it is the right thing to do.
Redaction tools can be used for things that would tie back to you as a person, such as a Social Security number or your email address. In the United States we have pockets of laws or regulations that protect privacy. For example, HIPAA protects health information and we have some protection in the financial area. More than 20 states now have data breach laws, which is getting closer to protecting personal information – but it’s an evolving development. The government is redacting personal information, or trying to anyway, when responding to Freedom of Information Act inquiries and submitting information to courts.
The hard way to do that is by hand and to have high-priced legal personnel, whether they’re attorneys or paralegals, actually do those redactions. However, ZyLAB technology is able to do that in an automated way as part of our e-discovery and investigative systems, and then human eyes act in an oversight role to make sure that it’s done appropriately and completely regardless of the file type.
Editor: Most e-discovery products and services can’t cope with some of the e-discoverable evidence like schematics. Are there resources that can do that?
Mack: As to schematics, our technology is able to read the text and the numbers on schematics whether they’re upside down or sideways, so that those things can be found by keywords, which is much less expensive than having attorneys look for them. The same technology that is used with schematics is also used for maps.
Editor: We understand that the EU is using ZyLAB’s technology in fraud investigations. What can corporations learn from this?
Mack: The EU uses our products in such investigations because they have enormous searching and processing power. This enables the EU to process terabytes of data to get down to the nuggets of information needed to determine whether they want to proceed, and how they want to proceed, with an investigation.
That’s exactly what corporate counsel wants to do when they have their own internal investigation. They want to get to the bottom of the matter as quickly as possible. The same technology can be used to conduct a qualitative early case assessment.
Editor: What are some of the top considerations for corporations that are facing international litigation and how does ZyLAB help?
Mack: Multinational corporations oftentimes have separate legal departments. The lawyers in a subsidiary in Turkey may not necessarily report to the general counsel. The corporate culture may be such that operations in each country have autonomy. What we find with the multinational companies that use our system is that the technology allows them to run their shop the way they want to locally and have a unified system that can report up when necessary. The ZyLAB system can be localized to the language and each installation can be customized, and even within an installation, cases can be customized.
Editor: I suspect that some people working for a global company think the whole compliance thing is a big joke.
Mack: That is true; however, we’re probably having a generational correction around business behavior, and who knows, when we get to the end of our generation, whether there will be few of those outliers. When the government knocks, most people listen. Given the tools available to enforcers, you may not even hear them knocking.
Our systems offer a way for companies to maintain effective compliance systems. They offer a way of uncovering key phrases reflecting the sentiments that are expressed when something is going horribly wrong or the types of expressions that people use in connection with gifts, gratuities or bribes when they don’t want to use those words.
Because we are careful observers of the enforcement scene, we are in an excellent position to alert companies to new strategies being used by enforcement agencies to uncover violations such as their ability to track the movements of employees and agents and to provide advice as to steps that can be taken to avoid suspicious behavior that might trigger an expensive investigation.
Editor: In talking about internal corruption, please discuss the practice of the monitoring of email traffic by global corporations including in their global operations.
Mack: For probably ten years now there have been programs that are called content sweepers, and ours is a superior product. As an email is being sent, they will sweep it for particular keywords. Based on the keywords they will send the email to a queue where a live person can monitor it either at the time or in some companies after the fact.
This is very mature technology, and the regulated industries were the first to embrace it. We’re seeing it now in companies that are in the M&A space and going global; they want to be careful not to compromise a Hart-ScottRodino-type approval process that takes place in many countries.
Editor: How can ZyLAB help in those situations?
Mack: Our technology is able to get into PDFs that might not have text or search the audio if audio or video files are being sent. It goes deeper and it has very advanced pattern matching and something that is called text mining, where you don’t need to know the exact keywords but you know “somebody gave something to somebody” and it can find that type of a pattern.
Editor: How important is e-discovery in countries outside of the United States?
Mack: It is becoming a fixture in many countries because it provides evidence that may be critical to resolving a dispute. Internationally, it is being used increasingly in disputes involving big business, patents and anticompetitive behavior.
Editor: Does ZyLAB offer advantages because of the locations of its offices?
Mack: Yes, we’ve been operating for years in all of the countries of the EU, in the East and in South America. The Middle East in particular is a hot spot for us, and we’re beginning to see some emerging requirements coming out of Africa.
Editor: I assume that ZyLAB is a kind of an official or unofficial consultant to many courts that are being exposed to the fact that a lot of information resides in ESI.
Mack: Yes, and we do have some court systems that have purchased our software so that they better understand e-discovery issues. Johannes Scholtes, our founder and chief strategy officer, has been assisting overseas governments, law firms and corporations for years on how to get a handle on the electronic information that pertains to their cases.
Editor: Is company data more secure if managed and stored behind a firewall or in a cloud?
Mack: That’s a good question, and the answer with respect to the cloud depends on who is running the cloud and the layers of security protecting it. Its physical security, of course, is important and data security is essential. A good rule of thumb is to examine other users of the cloud. Optimum security is assured if it is used by businesses that do business with a government and therefore must adhere to the highest intelligence standards. Increasingly “behind the firewall” means under corporate control and most corporations, if they haven’t already done so, are evaluating putting some of their data in the cloud. The economics are too compelling not to, so now the only question is, how do you do it in a way that keeps the data secure and keeps it in the right jurisdiction?
Editor: What is the impact of the EU Data Privacy Directive on discovery strategies for cross-border litigation, particularly given the Directive’s extraterritorial reach?
Mack: When people think about the EU Privacy Directive, they think about taking data out of the country – an action that might trip a violation – but it could actually be as simple as putting a legal hold on or doing some pre-searching, so it’s important to have processes and procedures in place to protect personally identifiable information when looking through a person’s or a company’s data.
The reach for the EU is all the countries in the EU, and underneath that each country has its own privacy landscape and directive and laws. For example, France is much more strict than many other countries, so our approach is to work with the U.S. team, if there is one, and the in-country team, if there is one, to help them understand the timelines. It may take longer to get data out of the EU into a U.S. court, and there are certain procedures to shorten the period. If the U.S. team knows that and gets a good sense of what that timeline is, they can better represent their client and perhaps negotiate the timeline upfront in the meet and confer. It’s not enough anymore in the U.S. courts to say, “Oh we’re going to have a delay.” What kind of a delay and how much of a delay? From a support perspective ZyLAB can help in those discussions.
Published April 23, 2012.
