The December adoption of updated Federal Rules of Civil Procedure is forcing major changes in the way solution providers must approach the data storage requirements of customers facing litigation.
And in today's litigious world, that's a lot of customers.
When Joe Kadlec, vice president and senior partner of Consiliant Technologies, an Irvine, Calif.-based storage solution provider, visited New York last month to do his first-ever presentation on the storage requirements of electronic discovery, or e-discovery, the response he received from financial, law and architectural firms was palpable.
One audience member and potential client, in particular, summed up for Kadlec what is on the minds of businesspeople wondering how to handle their data in the face of litigation pressures.
Kadlec related: "An architectural firm's CIO said, 'I'm getting sued over a building we built 12 years ago. I have to get a handle on finding records from 12 years ago. The amount of money it takes to recover not only the data but the applications from 12 years ago. If I didn't have this lawsuit hit me in the face, [the issue] would have gone on the back burner.' "
Randolph Kahn, founder of Kahn Consulting, an information management consulting firm in Highland Park, Ill., that specializes in legal consulting, said e-discovery has become an important customer issue in the past few years.
"E-discovery confounds just about any organization that has litigation," Kahn said. "Anyone selling technology solutions must be aware that compliance problems are at the top of the priority list for IT management today. In the last few years, e-discovery has taken center stage as organizations face the significant burden, expense and hassle of finding and processing all information related to the case."
Forrester Research estimates that spending on e-discovery activities will rise by an average of 22 percent annually to hit almost $4.9 billion by 2011, up from an estimated $1.5 billion in 2006. That spending covers everything, including computer forensics, a specialized service for collecting information from a desktop PC or data storage device; tape cataloging and restoration; extracting data from a data center; and document management tools aimed at providing information lawyers can use.
Despite its potential size, e-discovery is still a niche market, said Gary Fox, national practice director for data center and storage solutions at Dimension Data North America, a New York-based solution provider.
"There are a lot of tools, but they're not complete," Fox said. "Applications for archiving are still highly customized."
But it's a market that solution providers need to watch more closely, especially after a Supreme Court ruling in mid-December that broadened the potential scope for legal discovery, said Dan Carson, vice president of marketing and business development at Open Systems Solutions, a storage solution provider in Willow Grove, Pa.
The new changes to the Federal Rules of Civil Procedure address the fact that more of a company's information is likely to be kept in an electronic format, and specifically it mentions "electronically stored information" as a category for the first time as well as details what data can be kept or deleted and the format in which it must be made available for litigation.
"It was a big change," Carson said. "Before, what a company did with its information was according to company policies. But the Supreme Court said, 'No, information needs to be treated as part of the e-discovery process.' It said company policies do not exclude anyone from discovery policies. This caused us to look more at this space."
Very few, if any, solution providers can provide a full range of services related to e-discovery. Some areas require very specialized skills, such as computer forensics, while other areas require legal expertise.
However, many solution providers have begun working with customers to define new ways to store, archive and retrieve data, either as part of an overall e-discovery process or as the primary basis for e-discovery.
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