'Seismic Event' to Soon Impact E-Discovery

By CHRISTOPHER GULY
Law Times
August 13-20, 2007

With Forrester Research predicting that e-discovery technology spending will catapult from US $1.4 billion in 2006 to more than US $4.8 billion by 2011 - and within that, the review and analytics of related documents will jump from US $300 million in 2006 to over US $3 billion in 2011- Nick Croce likes to think he and his fellow executives at Inference Data "bet on the right horse”.

In fact, they feel their horse is galloping, given the specialty software product their Long Island, N.Y. - based company is marketing to law firms. The analytics Inference built into its software to categorize and prioritize electronically stored information have never existed before the company launched its product earlier this year, according to Croce, president of Inference Data LLC.

"Using Bayesian mathematics, it interprets the concepts of a document, but is not specific to a single word, giving an attorney the ability to rapidly make a determination on a group of documents rather than going through every document and potentially terabytes of information," he explains.

"So, if you're looking for the word 'shred' as it relates to 'shredded documents,' it would group those references and separate them from other references, such as when the word is used in recipes, such as 'shredded cheese,' or in sports, such as 'ripped the other team to shreds'."

Croce says that Inference's technology can search terabytes of data in seconds and show similar results for a keyword.

"An average person can review 200 documents a day, but some legal cases could require 12 years with 500 going through documents every day," he explains.

"In the U.S., there is a reasonableness standard. But we're coming to the point where it's unreasonable for lawyers to review information without some of these advanced technologies."

However, lawyers should be cautious before putting all their faith in software, says Kevin Lo, an e-discovery and computer forensics expert at LECG Canada Ltd.

"Every vendor claims to do everything under the sun, but the software is like Swiss Army knives. They do things like they claim, yet they don't do any one thing particularly well and may be only good at analyzing e-mail, for instance," he says.

"To me, e-discovery is the preparation of electronic data for court, litigation or investigation. But it's a huge umbrella term that encompasses so many things."

"Data is like a huge chunk of meat that is put through a process that grinds it down to small chunks that lawyers can digest," he explains. "Those pieces are then squeezed through a funnel and are hopefully reduced to the information needed for litigation."

For instance, if a company sues a recently departed employee accused of walking away with intellectual property or violating a non-compete clause, an investigator can forensically image that individual's workplace computer.

"We can look for signs - whether data was transferred to a USB thumb drive or CD-ROM, or trace e-mails sent from that computer."

That includes information seemingly deleted, he adds. Whenever you write anything on a computer, the hard drive stores the data on "index cards." If you delete a file, the computer places an "X" on it, but the file still exists unless the space it occupied on the hard drive is filled with new data.

"Sometimes you only find a few phrases, but those can be good enough to give you a case."

Searching for and extracting "inactive data" can also include tracing someone's web-surfing history or determining the last time a document was printed.

But while more lawyers are realizing how technology can assist them in e-discovery, there are still misconceptions about the process, explains Lo.

"People assume because computers are handling something, it should be nice and quick. That's not true, because we're dealing with so much data in so many different formats and an investigation often can be very slow and requires more than just a turnkey solution from a software vendor," he says.

Lo advises law firms against relying on their own information technology specialists to undertake comprehensive e-discovery investigations. "They oftentimes achieve a goal without worrying about legal protocols," he says, adding that he recently came across a case where a corporate "geek" hacked into a computer network to access an unauthorized password and obtain data.

"When we go in and acquire data, we don't copy it - we make a forensic image of it because if the data somehow got altered, the other side in a legal case can sanction a party for spoliation."

Forensic imaging means creating a bit stream copy of data to look at when it was created, last accessed, modified, and so on, explains Marty Musters, director of forensics at Mississauga-based IT security and forensics company NCI. He says that forensic e-discovery experts can also retrieve text messages, photographs, videos, and deleted call histories from cell phones and BlackBerrys.

Yet few lawyers in the province fully understand the "true possibilities" as it relates to e-discovery, says Musters.

However, an increasing number of Ontario law firms are starting to adopt the "management principles" of e-discovery, says Mark Rowell, president of Ethical Solution Providers Inc., a Toronto-based document-management company. "Software in IT infrastructure today is better, faster, and cheaper, so law firms and in-house counsel that had not invested in it earlier are being rewarded now in buying more advanced technology at a less costly price."

He predicts that two years from now, e-discovery will be part of every significant piece of litigation. "It will be on of those seismic events that has the ability to impact the entire profession," says Rowell, who expects his own company's e-discovery component - currently comprising of about 10 percent of its business - to triple in size by 2009.

"I was at a litigation conference recently and heard that the fastest-growing expense for firms with revenues of more than $100 million a year was litigation management. So we're investing substantially in e-discovery with the expectation that the growth curve will continue to accelerate as more firms make the decision that they can not be proficient with out focusing on e-discovery and electronically stored information."

Adds Musters: "I don't think there will be an explosion because litigants, whether they are on the prosecution or defense side, are starting to realize the wealth of information that exists in the corporate network."

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