The Modern Archivist

The NY Times on Data Growth

The NY Times’ Shelly Podolny ran a recent opinion piece on the growth of information. Particularly troublesome was the cost of information overload which was estimated to be in the “…hundreds of millions of dollars yearly.” According to the NY Times:

The current volume estimate of all electronic information is roughly 1.2 zettabytes, the amount of data that would be generated by everyone in the world posting messages on Twitter continuously for a century… More stunning: 75 percent of the information is duplicative. By 2020, experts estimate that the volume will be 44 times greater than it was in 2009.

And it is in the business world where all of this data is continuously being stockpiled – mainly because doing so seems easier than figuring out what is permissible to delete.  There are other costs associated to information hoarding as well, costs like e-discovery which can add up to millions of dollars every year…on top of settlements forced on companies by e-discovery’s costly nature.

As internet usage expands in volume, this problem faces both Wall Street and Main Street:

…it’s not the giants like Google or Amazon or Wall Street investment banks that are responsible for creating the data load on those servers — it’s us. Seventy percent of the digital universe is generated by individuals as we browse, share, and entertain ourselves…

Podolny asserts that no matter what we do, “…improvements in the digital highway usually just lead to more traffic…” But here at ZL we believe that is a fallacy. ZL believes in smarter traffic.

By reducing duplicative information within organizations, storage footprints can be reduced by over 75 percent. Using proven methods like stubbing, single-instancing and SaaS, we believe in a further reduction of IT capital expenditures while preventing the hidden costs of rogue data.

On top of this, ZL can categorize and (most importantly) delete data based upon the content or metadata. This puts real teeth to a retention schedule and means that there is even less information being stored.

Less processing power storing less information means smaller server farms, reduced energy consumption, and a decrease in a corporation’s carbon footprint.

As Podolny asserts, “No one wants to give up the pleasures and benefits that the digital domain provides.” With smart information management, no one will.

The Case against Gmail

I love Gmail. The features, UI, and integration of this service are second to none. I even use Gmail as my main e-mail client for non-professional use. However, Gmail cannot be used in the business world for one reason: it is not 100% reliable.

Yesterday, Gmail users have been reporting a huge problem – that all of their emails, labels, themes, folders and settings had been erased. According to Google, this may affect .29% of the Google Mail database. Although this seems like a trivial amount (29 out of every 10,000 mailboxes), the loss of any mailboxes at all to a corporation is substantial.

What if one of the lost accounts happens to be a C-level executive or a custodian in an eDiscovery case? I know of no IT or Legal department that would want to be traced to a problem of that magnitude. We all know how important e-mail is for day-to-day business. And imagine how indefensible it would be to explain that Google lost all of your evidence.  A day after the issue was reported, the Google engineering team is still “investigating”.

According to one blogger cited on HuffPo, “It is clear from the Gmail forums and Twitter that hundreds if not thousands of people have had their Gmail accounts compromised. A firm believer in the concept of cloud computing, it never occurred to me that my Gmail account could one day disappear.”

Cloud service providers will always have this problem – even Google can’t guarantee everything. You can check the status for the issue on Google’s forum here.

ZL’s Unified Archive will make sure this never happens for any company. While Gmail may lose e-mails forever, ZL’s e-mail archiving allows end-users (or only admins) to restore anything from single messages to entire mailboxes. In the case of user-error or disaster, everything is recoverable.

SAC Capital: Dumping Data

According to the Wall Street Journal, two former hedge-fund managers from SAC Capital Advisors have been acting quite suspiciously lately – one even took his computer drives apart with pliers and deposited the left-overs in four different garbage trucks around NYC. In testimony, the offending manager, Donald Longueuil, explained in very colorful language that, “It’s all f—in’ ripped apart. Everything’s gone.”

That is one way to enact a retention policy.

Mr. Longueuil had been reacting to this WSJ article about a federal probe into insider trading. Now, there’s no way to tell how SAC Capital manages their electronic data, but I am sure that no compliance officer is happy when someone is ripping up hard drives by piece.

“When people frantically begin shredding sensitive documents and deleting computer files and smashing flash drives and chasing garbage trucks at 2 a.m. … it is not because they have been operating legitimately,” said Manhattan U.S. Attorney Preet Bharara.

This is a prototypical case of why companies cannot allow end-users to manage the retention of their data – they are allowed to break the law and destroy the evidence. Prosecutors will not be kind to such a poorly governed company. Already the government has been broadening the scope of the investigation into SAC and its partners.

In this case specifically, SAC Capital could have benefitted from e-mail and file archiving to ensure that they keep a copy of all business-relevant data from their computers. With this information they could have proven Mr. Longueuil to be an isolated manager who went off the reservation. Instead, they will be at the center of an expanded federal investigation.

Alaska needs ZL’s Unified Archive

Over 2 Years and Waiting

Alaska now has only a few months to find and release 25,000 pages of e-mails from former half-term Governor Sarah Palin and her administration.  So far, Alaska has taken over 986 days to collect and review records from the Palin administration that was in office for only 966 days, or just over 2.5 years.

The Delays with Finding E-mails

Recently, Alaska attorney general John Burns granted the 15^th extension for the request, but assured everyone that the new deadline is “firm.” He explained the reason for the delays:  “The Governor’s Office has responded to several other very broad requests for Governor Palin’s emails, including eight requests that required review of over 25,000 pages. Due to limitations of the state’s email system, just collecting the email records responsive to those requests took several months.” [Emphasis added]

The number of delays and extensions may be a record for FOIA requests. And, incredibly, the governor’s office asked that those who requested the records pay for their production. According to MSNBC, it will cost over $15 million dollars to get the documents.  Here is a breakdown from the Associated Press:

When the Associated Press asked for all state e-mails sent to the governor’s husband, Todd Palin, her office said it would take up to six hours of a programmer’s time to assemble the e-mail of just a single state employee, then another two hours for “security” checks, and finally five hours to search the e-mail for whatever word or topic the requestor is seeking. At $73.87 an hour, that’s $960.31 for a single e-mail account. And there are 16,000 full-time state employees. The cost quoted to the AP: $15,364,960. (And that’s not including the copying costs since they apparently have to print all documents in hard copy, review and then copy them for production).

This is appalling and frankly way out of line with typical e-discovery costs.  In fact, I am sure that the judges and e-discovery experts who drafted the Judge’s Guide to Cost-Effective E-Discovery would reject these cost estimates out of hand.  Alaska and other state governments should already be prepared to answer similar Freedom of Information Act (FOIA) requests in a responsible and timely manner. To take over 2 years and charging millions of dollars undermines the concept of a transparent government. And if it is true that the delays are brought on by the state’s inefficient IT infrastructure, then they need to talk to ZL.

ZL’s Unified Archive as the Solution

Using ZL’s Unified Archive, Alaska (or any other government agency) can search, find, and review e-mails from one platform in minutes.  Citizens and journalist will no longer have to wait years or be charged millions for access to information that should be readily available to them. They will be better able to hold their state governments accountable and, as we have seen recently in Egypt, a government which is truly accountable to its citizens benefits everyone.

News Flash: e-Discovery Sanctions on the Rise

Okay, so maybe it isn’t shocking to learn that E-Discovery sanctions have risen every year in the past 10 years.  But it is surprising to find that the rise has been so great and that it continues regardless of aggressive attorney educational efforts and maturing technological solutions.

If you haven’t already seen it, last month the folks at legalworkshop.org published a thorough analysis of e-discovery violations throughout the past 29 years (yes, there was an e-discovery case in 1981). You can find the original post here.  According to the authors “ESI has played a more predominant role in pretrial discovery; producing parties have struggled to comply with ever-expanding and increasingly complex responsibilities. The liberal scope of discovery in federal courts, when coupled with ESI’s defining characteristics—high volume, broad dispersal, and dynamic nature—also confounds efforts to conduct discovery effectively and economically.”

We continue to see this played out in the courts and in the marketplace. The ruling in Qualcomm Inc. v. Broadcom Corp concluded that Qualcomm and its counsel failed to produce more than 200,000 pages of relevant electronic documents and was ordered to pay $8.5 million in legal fees. In the Victor Stanley v. Creative Pipe decision, intentional e-discovery mishaps nearly led to jail time and cost over $300,000 in sanctions.

A quick analysis of the data shows that written rulings on E-Discovery almost tripled between 2003 and 2004 – with a steady increase in each consecutive year and culminating in 2009 with 111 total rulings, 46 sanctions awarded and 12 adverse jury instruction sanctions. The rise of adverse jury instruction sanctions should be of particular concern for  defendants since it was found that the sanctions disproportionally affect them.  Indeed, since 2005, the courts have seen between a 1:5 to 1:3 ratio of plaintiff sanctions to defendants’.

With sanctions being given out at historic rates, it behooves legal counsels to take advantage of timely educational opportunities.  For

example, ZL is hosting a webinar next week, December 14^th, on Ethics in E-Discovery (sign up here) and another on 1/11 and 1/25 in January.

For more information click here.

In addition, in-house attorneys should re-evaluate their e-discovery software to see

if it can scale to match the incredible influx of documents and includes air-tight audit trails to prove the defensibility of all actions taken.  By combining education and the tools to properly address e-discovery, ZL aims to help all of our customers develop an unquestionably defensible e-discovery process.

Government Rewarding Whistleblowers and Effective Whistleblower Policies

A little publicized provision in the new Dodd–Frank Wall Street Reform and Consumer Protection Act, “…requires the Commission to pay an award…to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action…”

In the end, the provision allows the commission to pay between 10 to 30 percent of any recovery over $1 million to whistleblowers who give original information of fraud. As the Wall Street Journal’s Law Blog points out, “It opens companies up to more scrutiny from the SEC, and will likely raise costs.”

Corporate compliance systems will be under increased scrutiny internally, as employees are given incentive to tell on their employers, and externally, from the SEC itself. It is of importance to develop a system to quickly conduct internal investigations and to develop a set of whistleblower policies conducive to such an environment.

An effective whistle blower policy will:

• prohibit employees from interfering with the right of another employee to blow the whistle
• prohibit employees from retaliating against an employee for having made a protected disclosure or for having refused an illegal order
• provide a procedure for raising a concern to the corporate legal department
• provide a procedure for filing and addressing complaints of retaliation for whistleblowing.

Once these policies have been enforced, it is then vital to implement a robust investigation process – a process which manages internal reports of fraud and investigations directed by the SEC itself. The ability to quickly launch a thorough investigation, to identify areas of risk or to take action against open cases, becomes increasingly important as scrutiny increases. The Dodd-Frank bill pushes to light the mandate to create an environment of corporate transparency – an order now directly from Washington.

Investigations can take months to complete – disparate data sources and an incomplete data map can make collection a logistical nightmare. By deploying ZL Technologies’ Unified Archive, enterprises can manage and search through all of their unstructured data (including email and file shares) from one platform. This cuts down collection from days or weeks to seconds. With the Unified Archive, responding to an allegation of misconduct has never been simpler.

Extended Functions of E-Discovery: Regulatory Compliance and Internal Investigations

E-discovery solutions have naturally been classified as litigation support, and in this post I’ll go over why this area continues to be of growing concern. In another section, I will cover why the same solutions which provide litigation support can also help to solve internal investigations as well.

First, rising litigation highlights the importance of e-Discovery. In Fulbright’s most recent survey litigation survey, over 90% of U.S. and U.K. respondents expecting legal disputes to increase or remain the same:

…93% of U.S. and 97% of U.K. respondents expecting legal disputes to increase or remain the same this coming year. This expectation comes during a year when 87% of U.S. respondents faced new litigation in the past year (up from 83% last year) and 53% of all respondents initiated a suit in the past year (up from 48% overall last year)….In the U.S. – and for large-caps in particular – intellectual property and patent litigation are also high on respondents’ radars.

And, according to the same study, “More regulators have been investigating a greater variety of companies, from small to large and across sectors – particularly banking, health care and energy.” Rampant regulatory changes and stricter enforcement seem to have increased the need for the ability to find documents within an enterprise.

Like most things, cost produces the constraints which this process works around. Bringing discovery in-house reduces the cost at an astonishing rate. Patrick Oot, a member of the Law Technology News Editorial Advisory Board, is director of electronic discovery and senior litigation counsel at Verizon, based in Washington, D.C. says:

In July 2008, our EDD team completed a business case that presented an opportunity for Verizon to save about $4 million in legal expenses in one year by establishing an in-house system, with support staff, infrastructure and software for internal data processing, hosting and review. We believe that over the next three years, this business case will yield up to potential 395 percent return on investment.

Following this example, both NBC and Microsoft have moved their discovery internally. At NBC, Jonathan Chow -Chief Information Security Officer (CISO) – heads the IT implementation and explained to ComputerWorld that, as with many corporations, the information security department includes e-discovery as a key responsibility for litigation support, M&A activities, and internal investigations. The move in-house allows NBC to administer searches and investigations internally without the dubious cost of hiring outside vendors.

E-discovery Used Internally

E-discovery solutions have traditionally only been seen as a litigation support tool. But no longer. Today, savvy businesses are using the same tools to solve internal investigations, regulatory compliance and records management issues.

The use of e-discovery tools in internal investigations remains vital for international corporations as well as domestic outfits. All major companies need the ability to search electronically stored information ( ESI) to complete internal investigations that may be generated by HR or corporate security. No matter the regulatory environment, personnel misconduct and fraud detection must be of vital importance for any company – and a particular worry for CISOs, Chief Security Officers, General Counsels, and CEOs. Unauthorized access to sell or manipulate data and sexual harassment or other inappropriate communication has become all too common, and internal investigations have become ever more important as a result.

Compliance with government regulations remains of great importance to industries such as financial services and healthcare as well as the broader set of publically listed companies. NASD, SEC, and HIPAA govern strict regulations on the retention of e-mail and other ESI. As a part of information management and security, e-discovery tools like ZL’s Unifed Archive can manage the retention (or destruction) schedules for ESI based on a granular set of rules. If a company’s ESI were sand in a box, ZL’s proactive e-discovery tool is a very speedy fine-toothed comb.

As the application of e-discovery tools expand, many companies find that classifying them purely as litigation support can be a misnomer. The discovery function serves both litigation support and internal investigations due to the increasing need to hold employees accountable to company policies. No matter the name, the ability to search through a company’s ESI remains a pillar of responsible corporate governance.

Government Metadata Now Subject to Production

On October 7^th, in O’Neill v. City of Shoreline the Supreme Court of Washington ruled that metadata of government records are subject to disclosure under Washington’s Public Records Act (PRA).

The case involved a request for e-mails from employees of the State of Washington. The requested e-mails, which were duplicates, were provided in hard copy format to plaintiff without the original metadata. The plaintiff again requested the original e-mail complete with metadata. Unfortunately, the original e-mail had been deleted. To further complicate matters, at least one recipient in the original e-mail had been included solely in the blind carbon copy (BCC) function, as the to and from fields were not used to address the relevant individual. Metadata in the BCC field is challenging to capture.

Since the City of Shoreline was unable to produce the e-mail and metadata, the plaintiff alleged that the defendant violated the Public Records Act. Upon review from the Supreme Court of Washington, the court declined to hold that the City had violated the PRA, but the court is compelling  the City to recover the requested metadata from the BCC’d recipient’s computer. The trial court was instructed to hold the City in violation of the PRA If the recovery is futile.

O’Neill v. City of Shoreline was Washington’s first exposure to the question over the availability of metadata, and only the second case nationwide. This case, combined with the other case hailing from Arizona, form important e-Discovery precedent. Taking cue from the Arizona Supreme Court, the Supreme Court of Washington ruled that [emphasis mine]:

“Metadata may contain information that relates to the conduct of government and is important for the public to know. It could conceivably include information about whether a document was altered, what time a document was created, or who sent a document to whom…We agree with the Supreme Court of Arizona that an electronic version of a record, including its embedded metadata, is a public record subject to disclosure.”

The scope of production for Washington’s PRA has thus been significantly widened and any future failure to properly capture and produce metadata will result in violations of the Public Records Act. As Arizona and now Washington have shown, this is a trend which is likely to continue as courts learn to understand the value of metadata for providing context and information. State governments must prepare themselves to comply with requests which involve metadata.

From an e-mail perspective, which is highlighted in this case, states will be required to journal e-mails into an archive in order to be able to capture all relevant metadata. For instance, in order to capture the BCC metadata used in this case, the state would have had to archive the e-mail using a journal method. ZL Technologies’ Unified Archive provides the ability to journal, along with many more functionalities to archive the content and metadata of over 1000 file types. Visit www.zlti.com to find out more.

Elastic Clouds, Archiving and E-Discovery

A key aspect of managing archiving / e-discovery costs with the cloud, whether it is on the public cloud or a private on-premises cloud, is the ability to control hardware costs by matching it with the required workload through elastic scaling. In this article I will talk about why elasticity is important information governance and the different cloud computing layers (SaaS, PaaS, IaaS, etc.) that are required for a cloud computing solution.

Both archiving and e-discovery are well-suited for elastic cloud solutions due to the amount of one-time work needed. For archiving this often occurs when migrating from one system to another; while for e-discovery, this often occurs during collection and processing which is associated with individual matters. During any of these tasks, a large amount of processing power may be needed to collect and process data, whether it is several gigabytes or several hundred terabytes. In a traditional solution, hardware resources are fixed over the short-term meaning that either you cannot easily obtain additional needed resources or you are budgeted for peak loads and have additional carrying costs when not performing those functions. Using an elastic cloud-based solution allows organizations to match their hardware with their processing needs, scaling up when needed and scaling down or redeploying when not needed. At ZL Technologies, our customers run cloud environments ranging from several servers to several hundred servers, easily adding and removing servers as necessary for archiving and e-discovery.

To be truly effective, a cloud-based system must be cloud-enabled at several layers:

• Infrastructure – Infrastructure as a Service (IaaS)
• Platform – Platform as a Service (PaaS)
• Application – Software as a Service (SaaS)

Cloud infrastructure is generally easy to obtain, whether it is on Amazon’s public cloud or a VMware-powered private cloud; however, this takes advantage of only the most basic resource pooling benefits of cloud computing. By scaling at the application layer, a SaaS / PaaS solution enables true elasticity where servers can not only be easily brought online, but also brought into the worker pool to share tasks and then be redeployed when the tasks have been completed. Today, cloud-based elasticity at the SaaS and PaaS layers generally needs to be built directly into the archiving / e-discovery solution.

ZL Unified Archive®’s success as a scalable archiving and e-discovery solution (see IDC case study) is based on its ability to scale at the application and platform layers using ZL’s Globally Redundant, Integrated and Distributed (GRID^TM) platform and applications. The GRID^TM platform and protocol was developed by ZL to handle carrier-class Internet and mobile deployments that manage 100,000s of users and millions of emails per day for some of the world’s largest telecoms. This same technology allows ZL’s Fortune 500 customers to effectively manage hundreds of terabytes and billions of documents in the cloud.

If you are interested in learning more about scaling archiving and e-discovery in the cloud, please contact us at ZL Technologies for an in-depth discussion of offerings and case studies.  Or visit us at the upcoming IQPC conference for Oil and Gas Companies in Houston.  We will be there discussing both cloud computing on day 1 and how to move from reactive e-discovery to proactive e-discovery on day 2.  

Archiving Software is the Best Way to Handle eDiscovery

Barry Murphy’s recent post discussing whether file/email archiving software or ECM software is best for e-discovery reminded me of the little boat that Quint used in Jaws.  Mr. Murphy correctly points out that, “While ECM systems are closely connected to content-centric processes (think insurance claims management), the information deemed necessary could be archived (alongside email and other content) – and the archive could become the eDiscovery system of record.”   This is precisely what we are seeing in the market today.  Archiving solutions are being asked to ingest all document types including ECM files (like Sharepoint) so that there is one repository for all documents that need to be searched, culled and reviewed for e-discovery purposes.  And with the explosion of data inside large companies, this problem will only grow.  As most companies are realizing, when it comes to e-discovery – you are going to need a bigger boat.

Thanks for the awesome picture Steve!