Not only have the likes of Enron and Arthur Anderson been behind the almost obsessive drive for transparency and corporate governance pervading local and foreign markets, but they have also been responsible for the formation of new sectors, the e-discovery sector for one.
According to a Gartner report released in mid-July*, the use of electronically stored information (ESI) to support litigation and regulatory activity of all kinds continues to grow.
"Some legal scholars and practitioners believe it will become the predominant form of evidence production in future. Many companies are considering buying software to support this activity. CIOs, IT compliance and security managers, data centre personnel and in-house counsel need to understand how to conduct e-discovery in their organisations."
The report goes on to say that the market for e-discovery products and services is growing by more than 37% per year.
"Highly litigious industries are moving from an outsourced model for e-discovery to performing more functions in-house. The market will consolidate over the next two years, with three main segments: outside experts - law firms, service providers and consultants, which will focus on existing matters and large cases; infrastructure players - infrastructure vendors that will provide repositories, policy and storage management to handle existing matters and prepare policies and systems for future matters; and pure-play e-discovery - tools for policy management, attorney review and investigatory platform vendors," it says.
The company recommends the following:
* Industries that are highly regulated or face a great number of lawsuits on a regular basis (such as insurance and banking, energy and utilities, pharmaceutical and medical devices/equipment and hi-tech) should consider bringing all or part of their e-discovery processes in-house with enterprise software and appropriate staffing. Additionally, if you find yourself facing a single seminal case that may take years to resolve, you should also consider bringing e-discovery work in-house.
* If you are new to e-discovery and the volume of requests is manageable, spend six months understanding and refining your own processes before making any software purchase or hiring decisions.
* If your company is currently involved in the e-discovery process and you feel as though you are not able to execute it efficiently, engage strategic consulting services from one of the e-discovery consultants or service providers, and learn as much as you can through knowledge transfer.
Growing interest
Bad information management practices are coming to light.
Gartner
"Gartner clients' interest in e-discovery, information retention and information management, for compliance and legal reasons, is growing," the analysts note.
"Those that have not addressed the issue of litigation hold, inventory of IT assets and information retention policies will find themselves scrambling when the first request comes. Those that have been through an evidence collection process at least once are looking to make it more systematic and make decisions about whether to buy tools or outsource. Industries that have traditionally relied on service providers, especially in insurance and banking, are now bringing all or part of their evidence collection and processing in-house.
"Pharmaceutical, energy and utility clients, along with insurance and banking, those that have high product liability burdens and, of course, law firms, are putting out RFPs for 'legal discovery' software. Bad information management practices are coming to light," the report continues.
"Companies are questioning why they are storing so much data and are looking for ways to reduce the volume and thus the discovery, storage and energy consumption burdens, which are direct and non-differentiating costs."
Ask the following questions:
* How many legal matters do we handle each year?
* What procedures do we have in place to manage the suspension of normal deletion routines?
* If we have a high number of matters per year, do we need to hire legal IT specialists?
* What software can we use to automate, fully or partially, evidence collection, litigation hold and attorney review?
"The implications are wide-ranging and touch any company that will be called into court or investigated by regulators. This does not necessarily mean that you will need to buy software, but you need to understand your obligations and how to ease the burden on both legal and IT," the company states.
* Report courtesy of Gartner Africa. Information sourced from: The Emerging E-Discovery Market, Debra Logan, John Bace, 18 July 2007.
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