The 'paper trail' no longer consists of paper.
More than 90 percent of all business documents are now created digitally, and computer forensic techniques allow recovery of evidence invisible to most computer users. So if you think your organization is prepared to face a lawsuit, you may want to think again.
If you have not yet got the message about e-mail retention delivered by a Florida state judge to Morgan Stanley back in May, then be afraid. Be very afraid.
Because if you have not internalized that message, your document retention strategies could land not only your company, but you, yourself personally, in very deep water indeed. Or at least cause you major career embarrassment. Just ask Robert Saunders and Arthur Riel, both technology executives who were deposed in the lawsuit against Morgan Stanley, which will end up costing the company a cool $US1.58 billion unless it succeeds on appeal.
Because that judgement, which found Morgan Stanley had deceived billionaire Ronald Perelman over a business deal, highlights some lessons all companies should learn, experts say. Like that keeping e-mails is a must, but keeping too much metadata about those e-mails is an absolute, definite no-no. Like the fact that IT executives may find themselves in court testifying about their efforts to retrieve vital e-mails, and that that testimony could prove deeply embarrassing to them. Like the fact that courts these days are extremely unlikely to accept - and perhaps even inclined to actively punish - pleas of incompetence with regard to e-mail retention. Like the fact that there are major tensions between technology and the law yet to be resolved. And like the need for CIOs and corporate litigators to achieve a genuine meeting of the minds if they are going to keep themselves and their companies out of deepest doo doo.
"Basically what has happened in this country [the US] is that discovery of documents which takes place as part of civil litigation and a part of criminal investigations has come to routinely include electronic documents," says Eric Rosenberg, a former litigator with Merrill Lynch & Company and now president of e-mail policy consultancy LitigationProofing.
"It's so routine that it is expected to be part of every process. The problem is it's a complex, expensive process to make sure you have found all the required material and reviewed it and produced it. And that has led to a lot of issues in litigation about whether proper production of the documents to the adversary has been done during the course of the litigation."
Rosenberg says courts these days tend to demand that organizations facing litigation provide their adversary with a comprehensive array not only of electronic documents, but also the metadata associated with those documents. Meanwhile courts find themselves increasingly embroiled in argument about which side will pay for that provision; who should be responsible for doing that work and how it should be supervised; and how the courts can determine whether any failure to produce electronic documents was deliberate, and if so, what remedies should apply.
"Companies need to take a very serious view of electronic document retention. They must dedicate high-level, coordinated litigation and IT resources to retention and recovery issues," Rosenberg says.
"[In the Morgan Stanley case] the judge specifically pointed out and criticized alleged misleading testimony by an executive director of IT for Morgan Stanley. I think that sort of very pointed attention to the need for technology executives to testify and to the risks of incorrect testimony would grab the attention of [CIOs]," Rosenberg says.
"Morgan Stanley is going to be a harbinger," Bill Lyons, CEO of records retention software company AXS-One, told Reuters in May. "I think general counsels around the world are going to look at this as a legal Chernobyl."