New Rules on Retaining Digital Business Documents

New rules take effect that help companies decide how many e-mails and other digital items they have to keep in case someone sues them and demands the documents be brought to court. Even small companies can generate millions of digital documents in a very short time, and systems for managing them can be expensive.

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With all the e-mails, instant messages, voice mails and faxes that pass through - even a small company - these days, a lawsuit can involve retrieving massive amounts of information.

Prosecutors, defenders and judges want to know who wrote what, when. Today, new rules go into effect governing just how companies must save and produce information, should they find themselves in court.

NPR's Ari Shapiro has more.

ARI SHAPIRO: About 20 years ago, Susan Hackett finished her first year of law school. She landed a summer job in Washington, working on one of the biggest cases of the day - the AT&T-MCI antitrust suit.

Her job was, what's known in the legal profession, as document review - which is not nearly as interesting as it sounds.

Ms. SUSAN HACKETT (Association of Corporate Counsel): Literally, there was a whole building that had been put aside, where there were rooms that were stacked - from floor to ceiling - with boxes.

SHAPIRO: Those boxes contained files that came straight from the offices of phone company employees.

Ms. HACKETT: And all of us little squirrel law students were working our way, looking for nuts, through all of these boxes and we spent a whole summer doing nothing for 12 hours a day, except sorting paper.

SHAPIRO: They were looking for documents that would be relevant to the case. Today, Hackett is general counsel for the Association of Corporate Counsel. And in retrospect, she says, that building full of phone company files looks laughably small.

Ms. HACKETT: Now you'd have to multiply that by 400, or by 4000, because the amount of documentation that can be kept electronically is so exponentially higher than the amount that people will keep in their drawers, that there is just no comparison between the two.

SHAPIRO: It's not just the amount of information that's changed. Phoenix Attorney, George Paul, is co-chair of the American Bar Association's Digital Evidence Project. He says that for thousands of years, humans had stored information the same way by moving molecules, whether they're scratching on a stone or clacking on a typewriter. Not anymore. Today, Paul says:

Attorney GEORGE PAUL (American Bar Association, Digital Evidence Project): You can create maybe, 10 million original records, and then edit each of them. And all the information is hooked up to different human minds and is flowing, in essence, like a living ecosystem.

SHAPIRO: A fascinating idea for philosophers, perhaps, but figuratively speaking anyway, lawyers have to put the ecosystem in a box and haul it to a court. Christine Jones is general counsel for The Go Daddy Group, which registers Web site names.

Ms. CHRISTINE JONES (General Counsel, The Go Daddy Group): You can imagine it's very difficult for me to say I can produce the conversations had between employee A and employee B, when they come on an employee-owned cell phone, one of which is run by Cingular and one of which is run by Verizon.

SHAPIRO: Is that something you're afraid you may someday be asked to produce in court and be unable to do?

Ms. JONES: Well, I'm sure I'll be asked. And I'm sure I'll be unable. Whether or not our sanctioned, is going to be up to the judge. Because the judge, I think, based on the new rules - there's broad discretion to determine whether or not the party has acted in good faith.

SHAPIRO: These new rules tell lawyers and judges how to work together to set the guidelines for a particular case. The last time the rules were amended was 1970, when electronic calculators were still a new thing.

Lee Rosenthal, who's a federal judge in Houston, Texas, helped write the rules.

Ms. LEE ROSENTHAL (Federal Judge, Houston): The challenge for the judge, of course, is to try to understand the choices that were before the data producer at the time, and to not be overly influenced by the distortions of hindsight.

SHAPIRO: For companies, one challenge is to responsibly manage millions of documents without blowing the company budget. At Verizon's Washington D.C. legal department, antitrust specialist, Joe Ugolini(ph), sits on a cubicle looking at her computer screen.

It shows a list of folders with attorney's names on them. This is the modern day equivalent of the warehouse where law students worked on the phone company merger case, 20 years ago.

Mr. JOE UGOLINI (Antitrust Specialist, Verizon): These folders down here, are the folders of every contract reviewer we have working on the site right now. So I can monitor their speed. I can see their accuracy. I can check and see what folders they have.

So I can pretty much monitor them and distribute work from here while they're on the site working.

SHAPIRO: But the company still has to pay them a lawyer salary. For one recent Verizon case, more than 200 lawyers worked on document review. Right now, the company has more than 100 lawsuits. And everyday, companies produce more information than they did the day before.

So Verizon's part of a team that's testing new forms of document review. Patrick Oot is the company's director of Electronic Discovery.

Mr. PATRICK OOT (Electronic Discovery, Verizon): We are working on a study that sort of compares the search and retrieval technology, using computers and artificial intelligence, to look at our documents and categorize our documents and comparing that to the traditional process of document review.

SHAPIRO: So computers may one day do the work of some of these attorneys. In the meantime, a cottage industry has sprung up around electronic document recovery. Anyone who knows how to resurrect and organize deleted e-mails tends to make a lot of money.

Small companies who've never been sued may have to decide whether to invest in that kind of program or not, a decision roughly equivalent to choosing whether to drive without car insurance and hope you don't get hit.

Even companies that do have the money to invest in these programs, complain that they're chasing a moving finish line as technology quickly makes the most cutting edge program obsolete. From the prosecutor's perspective, these complaints are just the latest gripes from companies that hate all forms of litigation.

When Tom Debaggio was U.S. attorney for Baltimore, he prosecuted many white-collar cases.

Mr. TOM DEBAGGIO (Former U.S. Attorney): If people were communicating with rocks, people would be complaining, well, preserving rocks and producing rocks is very expensive. We need a thousand dump trucks. Well, this is how people are communicating these days.

SHAPIRO: He says litigation is about resolving factual disputes, and to do that you need the documents, whatever form they're in.

Ari Shapiro, NPR News, Washington.

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