Avoid e-mail archiving at your peril: Lawyer

A paper shredder works wonders on a paper trail, but getting data trails to disappear is another matter.

Count Enron and Arthur Andersen among those who learned the hard way when e-mail and document management became a very public learning experience.

“”It taught the corporate world that

the average office shredder does nothing to alter computers where the vast majority of paper documents are created, communicated and stored,”” said Coreen Lawton, a lawyer with McCarthy Tétrault, speaking in Toronto recently to a group of Canadian StorageTek customers.

And with more business being conducted through e-mail, the pressure to store electronic documents securely is growing. According to IDC figures, 60 per cent of business-critical data is now stored in e-mail, including contracts, intellectual property and company know-how, up from 30 per cent in 1998.

“”The obligation to preserve documents for an investigation or a trial is well known and includes digital data, including e-mail,”” Lawton said.

And when forensic auditors come calling, it can be a costly process to produce deleted or unarchived documents. Electronic evidence is quickly becoming a point of focus for evidence gathering or “”discovery”” as it is referred to in legal circles.

“”It’s creating enormous problems for many organizations. In most civil cases, the defendant bares much of the cost in responding to a discovery request,”” Lawton said.

It can be costly to resurrect electronic documents when proper archiving is not conducted. Often when handed a legal order to produce information, many organizations are opting to settle out of court rather than go to the expense of having information recovered.

“”You can delete all day long, but it can still be brought back,”” says Bill Tolson, storage solutions marketing manager with StorageTek. “”Most companies don’t see e-mail as a business record, but most judges in Canada, the US and Europe do.””

StorageTek provides e-mail archiving software that manages the storage, management, compliance and regulatory surveillance (in the financial industry) of e-mail. The system is invisible to the user and means they can have unlimited number of messages on their computer. Old messages are sent to an archive, but can be retrieved when needed.

The increased use of personal computers and sophisticated back up systems has driven up the cost of recovery so much that many organizations are simply settling out of court rather than having to go through a time-consuming discovery process.

In litigation, both parties will often require each other to produce copies of past e-mails satisfying particular characteristics. For example a plaintiff in a cigarette company may request all e-mail containing the word illness or cancer.

“”Responding to such a discovery request, which can also be just a fishing expedition, is extremely expensive to do manually,”” said Lawton, noting a recent case in the US where a company spent up to (US)$1 million to comply with a court order.

Lawton says archived systems can save companies not only headaches, but money, time and physical space.

According to StorageTek, the average e-mail server is saturated in 18 days and IT administrators spend eight to 12 hours per week on e-mail backup and archiving.

“”Administrators are spending a lot of time recovering deleted e-mail,”” said Tolson. “”IT people spend five to six hours every week recovering archived messages and attachments.””

Lawton says there are three reasons to archive from a legal perspective: corporate liability management, corporate asset protection and meeting legal record retention requirements.

While not every electronic e-mail or document needs to be save, there are messages that need to be kept for legal reasons such as corporate governance including articles of incorporation, minutes of shareholder meetings and shareholder registries. As well, documents relating to tax, accounting, employment records and documents that can be used as evidence for corporate liability purposes.

And with users tending to hoard e-mail, maintaining volumes has become a problem for many companies which has also caused a reduction in productivity for employees and IT personnel.

The advantages to using an electronic archiving system include decreased use of IT personnel time, especially when a system crashes due to overloaded capacity of the e-mail storage system and less storage space required both physically and electronically. Electronic archiving will store the necessary data and purge the unnecessary data on the basis of predetermined criteria.

In March, StorageTek released a suite of products serving a range of needs called Email Xcelerator including Email Archive Manager, Email Content Manager and Email Regulatory Manager. The first is for small companies while the second is for enterprise messaging systems. The third provides an e-mail monitoring and review tool for regulated financial organizations. So far, financial institutions, chemical companies and those regulated by federal drug agencies have been verticals expressing interest in the products.

Tolson says while many companies are concerned about legal implications, to date more interest has come from organizations looking to streamline their archiving process and reduce costs.

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