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5-Point Plan to Prepare for the New Federal Rules

Judge Scheindlin's Zubulake V decision was an early warning and the Coleman verdict the final warning. The Federal Rules of Civil Procedure have been revised to formally address e-discovery and in the process, have made it a nearly certain element of litigation. Moreover, the rules place a very early focus on existing retention practices and the preservation and discovery of information.

For companies without modern enterprise retention programs and robust legal holds processes, a thoughtful gap analysis and remediation plan is in order. These rules will have a profound effect on companies' retention and litigation strategies and practices.

Readiness Roadmap
With less than six months until the Rules take effect and escalating pressures from adversaries, companies should consider this five-point readiness plan:

1. Examine and improve your legal holds process now. Establish what your threshold for anticipating litigation is (see the Zubulake case for guidance), when and how often you will send hold notices, institute confirmations of compliance, establish your interview process, determine the various collection models and team members, develop re-usable collection plans, and establish an audit plan to test your process.

2. Establish your control and transparency requirements. At a minimum, the person responsible for litigation in house should have ready access to a current list of all legal holds, all custodians under a hold, and all active collections. Attorneys for each matter should have ready access to accurate information regarding all notices distributed for each matter, interviews conducted and findings, all evidence collected in the matter, and how and when it was collected. The longer it takes to assemble this information, the less reliable and accurate the information is.

3. Build a map of the data sources and the individuals responsible for them. Conduct an inventory of the systems and sources of data as well as the storage locations for active, inactive, and archived data. A full review of back-up tape stores is prudent and can help predict future discovery costs. In addition to the data sources, note the business processes that generate the data, the business units with ownership, and the staff responsible on both the business and IT sides. Your Sarbanes Oxley internal controls review is an excellent source of information and the SOX project team is an excellent resource for this effort.

4. Revamp your retention program to enable more efficient and effective preservation. Upgrade the retention program to address electronic information and enterprise legal holds. The policy and schedules should specify lifecycles for all data, not just paper records (the Supreme Court's ruling on the Anderson case validated the legitimacy of disposing of information under retention programs). The program should be a primary vehicle for litigation, IT, and business people to collaborate on information preservation and disposal; make sure that these stakeholders have a shared truth on retention schedules and current legal holds. A critical element of your upgrade is the identification of records coordinators, offices of record, and custodial systems-the key linkages to discovery and preservation.

5. Communicate and educate. Meet with senior management to underscore the importance of legal holds using recent events as examples; educate the executive team on the changes in federal rules. If needed, do an analysis for senior management of the costs of your current process in an accelerated "meet and confer" environment; gauge how litigation costs and defensive options will be impacted. Update your corporate ethics and governance training to include compliance with legal holds and retention policies. Publish revised retention and legal holds policies and consider employee certifications of training and compliance.