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Search’s Critical Role in Litigation Preparedness

This article is part of the Best Practices White Paper Enterprise Search [May 2008]

Just when the IT world is already inundated with legal terminology due to the December 1, 2006 revisions to the Federal Rules of Civil Procedure (FRCP), yet another technical legal term has begun creeping into the lexicon of the search industry: the "legal hold," which is alternately referred to as a "litigation hold." Like its cousin "e-discovery," the term legal hold connotes a certain foreboding in the form of a visit from the legal department which will result in impossible deadlines with significant downside for mistakes or tardiness.

Simply put, a legal hold is the process whereby all documentation which may be potentially relevant to an investigation or anticipated litigation is preserved and collected, for analysis or production to a third party (typically an adverse party). While legal holds are mandatory for US entities in litigation, they are also relevant to multinational corporations (think Société Générale); furthermore, the legal hold requirement is not limited to litigation as the same obligation is inherent with regulatory investigations, e.g. by the SEC, FTC or DOJ (irrespective of where a company may be headquartered). And the downside of failing to save potentially relevant information can be huge, with court-levied fines, presumption of guilt with respect to elements of a case and even outright adverse judgments representing just a few potential ramifications.

With these doomsday scenarios as a compelling backdrop, just how exactly does one conduct a legal hold? Traditionally, legal holds have been effected one of two ways: either physically sending personnel to copy each individual laptop, server, desktop, etc., or trying to replicate this process remotely (i.e. imaging entire computers "over the wire"). Under either scenario, large volumes of documents—oftentimes hundreds of gigabytes if not terabytes of data—must be collected, organized and sifted through before they can be made useful. Thus, and as with knowledge management, at its core the whole technical side of legal holds is fundamentally a search and categorization challenge. And in this case, the more and deeper sophisticated search and categorization technologies are deployed, the simpler and more cost effective legal holds can become.

Moving Search and Categorization Further Upstream
With the rise of e-discovery’s profile amongst enterprises due to the aforementioned "FRCP buzz," the interest level in deploying sophisticated search for effective legal holds has skyrocketed. Search vendors are responding to this interest with compelling new tools, with emerging search-powered technologies revolutionizing legal holds by making them far more automated, accurate, replicable and cost-effective. And enterprises have not limited the scope of their search deployments to legal holds: these same enterprises are increasingly realizing that the more organized their information is before a legal hold is contemplated, the easier the legal hold process will be. Again, search—and its powerful sibling automatic categorization—occupy key roles in organizing information not just for knowledge management purposes but for compliance, records management and litigation preparedness as well.

Broadly speaking, when seeking to organize information for these purposes, knowing where the information resides and how it is maintained is the first challenge, as awareness of what needs to be organized clearly presages any organization effort. A second challenge relates to the characteristics and purposes of such information. What are the relevant subsets of information? Is the data being kept for business purposes...or for compliance or records management? The answers to these questions will dictate what information is kept and for what length of time. But the effort is well worth it, as effective information organization permits the firm or company to meet all of its e-discovery document retention requirements without getting in the way of secure information access for knowledge management purposes.

Other Uses for Search-Powered Legal Holds
In addition, while e-discovery gets the lion’s share of attention in the US, the utility of solid legal hold technology is not limited to litigation. One recent example concerns the European investment bank Société Générale, which incurred trading losses of some $5 billion as the result of the activities of a single rogue trader, Jerome Kerviel. The bank is undoubtedly conducting its own internal investigation into what their traders were doing prior to the series of events that led to the losses. Moving forward, it would also be helpful (and may be required by EU or US regulators) for firms like Société Générale to run automated, periodic inquiries or to simply track certain information using the same technology used in the legal hold scenario. In this way these banking giants can preserve the necessary information whether or not there is a regulatory inquiry, investigation or lawsuit underway or even on the horizon.

Buyer Beware: "Search" Is NOT Created Equal
One last word of caution is needed with respect to search and categorization technologies: be aware that not all search is the same. With search occupying such a critical role in legal holds (and all along the eDiscovery spectrum for that matter), enterprises are gravitating towards search technology which is more sophisticated yet highly scalable and flexible. For example, simple keyword or even Boolean search is no longer sufficient in the legal hold context as legal holds can often preserve information months or years before the exact scope of an investigation or lawsuit takes shape. As a result, it is frequently impossible to define a fully comprehensive list of keywords—which is one reason why conceptual search technologies are increasingly popular in this context as they allow the net to be cast more widely—but not too widely.

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