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Building a Bigger Sword: Current Trends That May Slash Electronic Data Management Costs in Litigation and Beyond by Geoffrey M. Howard and Andrew Tran Bingham McCutchen LLP

I. Introduction

Electronic information production -- as an industry and a practice -- has matured rapidly over the past few years. Not long ago electronically stored information was a novelty. E-mails and the internet were foreign terms to almost the entire population; electronic data, if preserved, was stored on now-defunct floppy disks and primitive hard drives. Today, the digital age has changed the entire landscape of business and record retention. Information technology (“IT”) networks of large companies like Microsoft send and receive 250-400 million e-mails a month.1 Beyond e-mails, employees at companies produce numerous documents and spreadsheets a day, which are retained in the form of electronic data. Microsoft’s servers back up about 15 terabytes of electronic data a day.2 To put that in perspective, one would have needed over 1,000,000 floppy disks twenty-five years ago to back up the electronic data that Microsoft’s IT network processes in one day today.

We know, now, the “what” of electronic information. We know the “where.” We know the “how,” although steady progress continues in developing tools to better collect, manage and produce large quantities of electronic data. Today, as vendors consolidate and law firms advertise experienced, dedicated electronic discovery infrastructure, the question turns more and more to one thing: cost. Large enterprises increasingly focus on the cost aspects of creating, retaining, deleting and producing electronic information. Of course, cost concern has dominated electronic discovery issues since the beginning of the recent explosion in electronic discovery. It began as shock, followed by a brief period of resignation and has now evolved to an informed and determined reduction effort. This evolution corresponds to an increasingly widespread sophistication amongst lawyers, judges and corporations about the problems and solutions relating to the creation, storage and production of electronic information. This article addresses some current efforts to manage cost without sacrificing the long-established expectations for retention and production of relevant material in a dispute. We begin with the proposed changes to the Federal Rules. We then look at some selected examples of common law developments relating to costs. Finally, we focus on a portion of the current cutting edge in the trenches, including retention, offshoring and outsourcing.

II. The Proposed Amendments

On June 26, 2005, the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States (“Standing Committee”) approved a number of new changes to the Federal Rules of Civil Procedure (the “Rules”). The proposals include a number of amendments to Rules 16, 26, 33, 34, 37, 45 and Form 35. While the approval process is still ongoing -- the changes will be presented to the Judicial Conference on September 20, 2005 and then to the Supreme Court and Congress – some argue the amendments are overdue in light of the changing face of twenty-first century litigation and discovery.


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