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An Education in Records
What You Don’t Know CAN Hurt You

This article is part of the Best Practices White Paper Records Management, Risk & Compliance [October 2009]
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The following is a true story, but I will not pretend that I knew it out of my own brain... I did what everyone does. I Wikipedia-ed it:

This year is the 400th anniversary of New Amsterdam, now more familiarly known as New York City. In 1609, Henry Hudson, an Englishman sailing for the Dutch East India Company, made the first exploration of what is now New York harbor and of the majestic river that today bears his name, laying the foundation for the Dutch claim on the area. His voyage of discovery led to the creation of the Dutch West India Company and ultimately to the founding of New Netherland, including its trading post at the mouth of the river—New Amsterdam.

The Dutch East and Dutch West Indies Companies were the first publicly traded companies. They were the first companies to trade shares. They were also the first companies to fall to corruption scandals. And they were the first companies to have records management problems...

Seems the hand-written records surrounding the founding of New Amsterdam that were stored in the actual Amsterdam were collected up by an overeager public servant, who promptly and efficiently set it all out on the curb for the garbage man one day in 1850...nearly 250 years after their creation.

Tragic. But very happily there were copies of those files back in New York City, which were eventually translated from the Dutch to English and exist to this day.

So, sometimes a backup is a good thing. Sometimes, though, not so much.

Are YOU Ready?
I spent a couple days last month talking about records management with two of the undoubtedly smartest people in the world on the subject: Annie Goranson is the discovery attorney for the Symantec Corporation. And Dr. Johannes Scholtes, as frequent readers know, is president and CEO of ZyLAB North America.

I won’t try here to "merge" their comments into a fancy narrative, nor will I pretend any interviewing prowess is in any way illustrated here. But I WILL try to summarize what these two acknowledged experts had to say during our conversations last month:

"There’s much more interest in proactive discovery as a result of the changes to the Federal Rules of Civil Procedure (FRCP)," started Annie. "People may not know all of the details of FRCP, but they are aware enough to realize they probably don’t have enough of an information management system in place to cope with them! So they kind of get stuck, and don’t know what to do. It’s overwhelming for them to contemplate. They don’t know where to start."

She continued: "There are those companies that are constantly responding to discovery requests and litigation. They are used to it. But the companies that are frozen in place are the ones that haven’t had a lot of litigation, and don’t have any—or not enough—experience. But one thing’s certain: Once they’ve been stung and realize the costs, they start to think about better ways to do it."

I asked Annie whether there are specific industries that seem to be more tuned in to litigation preparedness? "The industries that are already more regulated, such as finance or pharmaceuticals, also tend to be more litigious. In a sense, those industries are almost automatically prepared, because they’re required by regulation to keep certain information, maintain strict records retention and disposition policies, respond to information requests on a regular basis. These companies are used to litigation; they deal with it every day and expect to deal with it every day.

"But," she continued, "there are a lot of other industries where there’s litigation, but you wouldn’t necessarily expect it...but it happens a lot! For instance, education (who knew?). And manufacturing, with its product liability issues. And local and state government, which have to satisfy FOIA requirements and ‘open book’ and records requirements."

I wondered whether the size of the organization, not so much its vertical industry, also had any bearing on its preparedness for litigation, and she had an interesting perspective. "Small and medium-sized businesses (SMBs) may have an even greater need for automating records and information management," she said. "Big companies that DO have in-house counsel are getting more and more involved in information management issues of all kinds. This is arising mainly from discovery challenges.

"But those requirements don’t change if you don’t have a full legal department. There are many, many companies that have no in-house counsel, or maybe at minimum have contract attorneys. But these contract attorneys are usually specialists in contract negotiation or something like that...not litigation, necessarily. In some cases, you can get feedback and support from the attorney’s larger firm, but it can be really expensive to have outside counsel come in and make recommendations."

In these cases, Annie thinks, the attorneys have to be brought up to speed on the expertise required by the business. "There’s a huge learning curve," she said. "Outside lawyers can never have full visibility into the workings of the business."

So what’s the solution for those SMBs who (a.) don’t have a fancy legal team; and (b.) don’t have the bucks to maintain a relationship with an outside firm?

"If you don’t have an in-house legal team, or you don’t have a close ongoing relationship with outside counsel, sometimes you can have a ‘point person’ on the management side that might have some legal knowledge, or at least maintains a close relationship with the attorneys," she said. "They may not have everyday contact, but at least they have a relationship."

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