must track employee e-mail
By Christopher S. Rugaber, Associated Press
Saturday, December 2, 2006
U.S. companies will need to know more about where they store
e-mails, instant messages and other electronic documents
generated by their employees in the event they are sued,
thanks to changes in federal rules that took effect today,
legal experts say.
The changes, approved by the Supreme Court's administrative
arm in April after a five-year review, require companies and
other parties involved in federal litigation to produce
"electronically stored information" as part of discovery,
the process by which both sides share evidence before a
Federal and state courts have increasingly been requiring
the production of such evidence in individual cases. The
new rules clarify that the data will be required in federal
Under the new rules, an information technology employee who
routinely copies over a backup computer tape could be
committing "virtual shredding" once a lawsuit has been
filed, said Alvin F.
Lindsay, a partner at Hogan & Hartson LLP and expert on
technology and litigation.
Companies still could routinely purge their archives if the
data aren't relevant to cases companies have pending or
expect to face, though specific sectors such as financial
services remain governed by other data-retention rules.
The new rules make it more important for companies to know
what electronic information they have and where, especially
because of a provision that requires lawyers to provide
information much earlier than before on where their clients'
data are stored and how accessible they are.
Large companies are likely to face higher costs from
organizing their data in order to meet those deadlines, said
James Wright, director of electronic discovery at
Halliburton Co. Besides e-mail, he said, companies also
will need to know about things more difficult to track, like
digital photos of work sites on employee cell phones and
information on removable memory cards.
There are hundreds of "e-discovery vendors" and these
businesses raked in approximately $1.6 billion in 2006,
Wright said. That figure could double in 2007, he added.
Lawyers will have to spend time reviewing electronic
documents before turning them over, Lindsay said. Although
electronic searches can help narrow the amount of data, some
high-paid lawyers will still have to sift through casual
e-mails about subjects like "office birthday parties in the
pantry" to find the relevant information, he added.
But Martha Dawson, a partner at the Seattle-based law firm
of Preston Gates & Ellis LLP who specializes in electronic
discovery, said companies will not have to alter how they
retain their electronic documents. Rather, she said, they
will have to do an "inventory of their IT system" in order
to know better where the documents are.
The new rules also provide better guidance on how electronic
evidence is to be handled in federal litigation, including
guidelines on how companies can seek exemptions from
providing data that isn't "reasonably accessible," she
said. This could actually reduce the burden of electronic
discovery, she said.