10 Reasons Information Governance Makes Sense: Reason #3 – E-Discovery

Electronic Discovery

“It costs about 20 cents to buy 1GB of storage, however, it costs around $3500 to review 1 GB of storage.”

AIIM International Email Management ROI Calculator[1. AIIM International, Email Management ROI Calculator. Online at, http://www.aiim.org/Membership/article.aspx?IDbb=34769%5D

“87% of lawyers who responded to the survey said electronic discovery is too costly . . . A fundamental problem stems from companies’ not considering the retention of information.”

Digital Data Drive Up Legal Costs, Wall Street Journal[2. “Digital Data Drive up Legal Costs,” Wall Street Journal, September 6, 2008.]

In Brief. IG makes sense because it reduces the cost and pain of discovery. Proactively managing information reduces the volume of information exposed to e-discovery and simplifies the task of finding and producing responsive information.

In the past five years, electronic discovery has evolved from a specialized legal issue into a disruptive force in the business, IT, legal, and information management realms.  This transformation was kicked off in the US by the 2006 amendments to the Federal Rules of Civil Procedure, and fueled by years of inattention to information management at many organizations, which had allowed vast stockpiles of unnecessary email, documents, and databases to accumulate.

Today, organizations can expect to spend millions of dollars finding, processing, and producing responsive digital information in the course of a major lawsuit. One out of five large organizations spends more than $10 million each year on litigation (excluding settlements and judgments).[3. “Fifth Annual Litigation Trends Survey Findings: Direction and Dynamics.” Fullbright and Jaworski L.L.P., 2008.]  By 2011, it is expected that organizations will spend nearly $5 billion annually on e-discovery tools.[4. Forrester Research, Inc., “Believe It — eDiscovery Technology Spending to Top $4.8 Billion By 2011,” December, 2006.]

The expense of e-discovery comes from many sources, but one of the most significant is the cost of finding, processing, and reviewing information that has been unnecessarily retained. The law on this point is quite simple: if you possess information at the time you know or suspect it will be responsive to a legal matter, you must preserve it – even if you could have normally disposed of it in accordance with your records management program.

The proactive nature of IG means that unnecessary information is disposed of as soon as it is no longer needed and all legal requirements for its retention or preservation have been satisfied. IG enables us to get rid of unnecessary information in a defensible manner. As such, it can reduce the amount of information that needs to be reviewed in the course of a legal matter.

When working with clients, it is not uncommon to find that 75 to 95 percent of the information created by the organization in the email system, for example, has no long-term business value or legal retention requirement and can be disposed of in the ordinary course of business. These percentages vary by system and industry, but the amount of “record” content is usually much lower than “non-record.” Further, a good IG program reduces the amount of duplicate information stored by an enterprise. Duplication is expensive and wasteful. It is not uncommon to find that 40 percent or more of the data colllected from clients in e-discovery is duplicate information.

The value of IG then, is that it can help organizations defensibly reduce the amount of information stored by orders of magnitude – a benefit that is felt not only in reduced management costs, but also reduced e-discovery costs and risks.

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