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developments in electronic discovery and the legal field in general.

a. Optimize Information Technology Systems and Network Efficiency

A company can create greater efficiency and cut costs through the optimization of its IT systems and network. One way to do so is to establish a document retention policy regarding the routine backup, storage and deletion of its electronic data. Microsoft, for example, recycles its daily backup tapes every 14 days saving it over $1.7 million a year.18 On the other hand, in the Toshiba case, the parties discovered that Toshiba had over 800 backup tapes dating back over ten years. Toshiba admitted that many of these tapes were obsolete, incorrectly labeled or had deteriorated to a point where they were no longer useful. In Toshiba’s case, many, if not all, of the backup tapes were no longer of any business use or value. Yet, Toshiba undertook the expense of storing and managing them. Toshiba was fortunate that it was not compelled to restore and produce the electronic data during discovery. Had it been compelled to do so, it would have cost $1.5 - $1.9 million alone to extract and recover the data and then a substantial sum further to review the documents for relevance and privilege.

Companies of all sizes should consider a document retention policy which provides that backup tapes shall only be kept the minimum amount of time needed for disaster recovery purposes. As stated in the Zubulake opinions and the proposed Rule amendments, a company may routinely delete or recycle its backup data, even when litigation is pending or anticipated, if it follows its pre-established document retention policy in good faith. Routinely overwriting data on backup tapes can significantly cut the costs of replacing expensive tapes and also reduces the substantial storage and handling costs. Companies that keep backup tapes for a extended period of time also incur additional costs in indexing, labeling and managing the tapes. If data on the back up tapes is deemed accessible, or if the retaining party ends up on the wrong end of the cost-shifting analysis, backup tapes become expensive and difficult to produce in discovery. Often times third parties may be needed to recover or extract data which add to labor costs. Given the above, a document retention policy is not only cost-effective, it is a necessity.

Another possible way to optimize a company’s IT system and network is to reduce reliance on expensive backup tapes, which often make archived data difficult to restore for discovery purposes. Some large firms and companies are now implementing a solution called “proactive online archiving” offered by data management companies such as Zantaz.19 Proactive online archiving involves the instant archiving of electronic communications as they are sent or received. The company can set guidelines for the selective capture of any live data -- email messages, attached files, and even instant messages -- from any or all employees. Once data is captured, the data is archived in an easily accessible format and consolidated into a single online repository, either maintained on-site by the company or by the third party vendor. The data can be backed up online for any period of time and routinely deleted, just as with backup tapes.

A proactive archiving system can create a number of efficiencies and cut costs in several areas. The following are some examples:

First, data archived online is easily indexed by any number of criteria -- by employee, location, etc. This allows for quick, efficient, and selective searching and restoration when the need arises. Unlike with backup tapes, expensive restoration software or third party consultants is not needed. The time and expense required to recover and produce data for discovery is also


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