People Get Ready
The “New” FRCP Will Change Your Life
I recently dove headlong into the subject of litigation readiness and the role that electronically stored information (ESI, in that world’s parlance) plays in it, especially in light of the "new" (more than one-year-old now) Federal Rules of Civil Procedure. I found myself both out of my depth and tremendously fascinated. Maybe I shoulda been a lawyer.
In some ways, it reminded me of an old Steve Martin routine, back when he was amazingly funny (as opposed to today, when he is merely amazingly brilliant). He would say, "Hey, remember a few weeks ago when we found out that the world was going to end? You know...that we’re all going to die soon? Oh, come on...you must remember this. And, remember...? We decided not to tell all the stupid people...oh...ooops."
I’m not implying anyone is stupid, truly, but it IS shocking to me how few people are fully prepared to respond properly in the event of litigation or subpoena in a high-court case, now more than a year since the amended FRCP rules were enacted.
I don’t think I remember any other "Event" ("Y2K!" "Sarbanes-Oxley!!" "Melinda voted off Idol!!") that has been as unexpected and potentially damaging. Well, maybe the Melinda thing...after all, that time we ended up with Blake.
So I met with a group of experts in the field to get to the bottom of FRCP preparedness; the very specific role that litigation support and case management plays in the greater information universe; and whether we’re one "Morgan Stanley" away from a HUGE explosion in the IT/business world.
Ready or Not...Here it Comes
There’s general consensus that the heavily regulated industries, such as pharma and financial services, as well as the largest companies in the world, are fully aware of the implications represented by amendments to the FRCP...even if they are not fully prepared to respond.
"The big pharma, healthcare and financial services companies may not be prepared for the revised FRCP—in fact, many of them are not—but they are definitely aware. It’s squarely in their radar. But smaller enterprises that aren’t necessarily at risk may not consider it a big deal," says Craig Carpenter, VP marketing for Recommind. "Companies that get very few lawsuits per year tend to deal with them on an ad hoc basis. And that seems to work OK. The only thing that will get companies like that to adopt e-discovery tools would be if they got caught in a ‘Morgan Stanley moment,’" Craig says. Or their competitor does.
Johannes Scholtes, president and CEO of ZyLAB North America, agrees with that assessment. "Smaller companies don’t care; they figure they don't get sued that much. But once they’ve gone through the process, they will try to implement tools for the next time! The regulated industries—utilities, pharma or airline maintenance companies—have always been prepared because they had to be," Johannes continues. "What the FRCP has done is suddenly regulated the entire US market...now everyone is in a regulated environment. And the FRCP also apply to any company that does business in the US or with US companies. It’s a worldwide situation, and companies outside the US are totally unprepared to comply."
And speaking of being unprepared, I don’t think ANYONE was ready for the huge affect the new FRCP rules would have on the basic function of counsel v. counsel: "The new rules are not necessarily as dramatic a change as some people make them out to be. What they DID change is the process for how the parties have to work together to identify ESI, find out where it is and how it’s going to be delivered," Craig says.
"The deadlines are also a big deal," adds Johannes. "It’s easier to push someone to an unfair settlement because of the close deadlines."
Craig continues: "The sea change is in the ‘meet-and-confer’ meetings. You have to reveal everything, meet to discuss what you have and where it is and haggle out the best ways to find and deliver it. That’s a very different way of thinking and acting for lawyers; they’re used to being obstructionist in the discovery process, and now all of a sudden they have to cooperate. It’s been tough."
The main thing, I think, to remember about the new FRCP rules is that they aren’t really that new. There’s ALWAYS been an "FRCP." And it’s not even the fact that ESI is now discoverable...it always has been. What’s truly demanding about this new environment is that it requires the various in-house counsels, the outside law firms and the many, many affiliated business units in every company in America to change the way they work together. It’s a big deal, and it’s pretty much gone unnoticed except among the biggest organizations. It’s as though Y2K was coming, and we forgot to tell the stup—sorry, I said I wouldn’t go there.
Change Agent for our Times
Matt Camassa is director of business development for LiveOffice. He shares some interesting statistics: "A survey recently asked 400 IT managers if they could meet FRCP requirements, and 53% admitted they could not," he reports. What he didn’t add, but could, is that most of those have never even heard of the amendments. "FRCP is gaining visibility, but from an understanding standpoint, there’s still a long way to go. I liken it to the financial services industry. After the SEC levied some huge fines for non-compliance, companies became more aware. When we see monetary penalties for not being able to produce email in the case of litigation or subpoena, there’s going to be a lot more awareness and more education. And education breeds responsibility."
Maybe. But Galina Datskovsky, senior VP of development for information governance at CA, thinks that mere education hasn’t had quite the impact that Matt would like it to. "There are a lot of people who choose to do absolutely nothing about it. Why not? Their marketplace is a factor; some people don’t feel they’re high-risk for litigation, or at least a high-court’s litigation. Some are lulled into a false sense of security because nothing has happened to them. Yet. But there are also many companies that want very much to do something, but don’t know how to get started. It LOOKS like a very large undertaking—which it is. But they feel they need to bite off the whole thing or they won’t be in compliance. So they’re walking themselves onto a ledge they can’t get off. I know a 150-year-old company, with 150 years’ worth of information. They don’t know where to start. I told them they will be sitting here in five years, 155 years old, and STILL won’t have a process in place...and they’ll have five year’s more stuff! So, it’s only going to get worse."