Tuesday, August 16, 2011

Government Agencies Look Within to Solve E-Discovery Woes

The Federal Trade Commission recently launched what's likely to be a broad antitrust investigation of Google. David Shonka, the FTC's principal deputy general counsel, says there is a misperception that government agencies have unlimited resources to shoulder the burden of electronic data discovery costs in big cases like this.

"You have to keep in mind that by the time you take $100 billion in tax revenue and divide it [among] the various shops and departments, the allocation available can be very small," says Shonka, who also heads the agency's E-Discovery Steering Committee. "It is not unusual for the FTC to litigate a company over a product that has a larger advertising budget than our entire appropriation."

Individual agencies find it difficult to keep up with the growing costs and complexity of EDD. A few of the larger agencies do have dedicated EDD staff and processes in place, but many others have neither the experience nor expertise to manage electronically stored information. "It's a tale of two cities, rich and poor," says Jason Baron, director of litigation, U.S. National Archives and Records Admini­stra­tion. "If e-discovery is perceived as a core competency for an agency, it is more likely to get budgeted. But if [EDD] is not seen as an immediate threat, then requests for more advanced software are likely ignored."

According to IDC, a technology research firm, 14 government agencies will experience cutbacks in IT spending between 2011 and 2012. Some cuts will be deep — the Department of Housing and Urban Development plans a 41% cut in IT spending for the next fiscal year (bit.ly/LTN1182b). Last summer the White House asked agencies to cut at least 5% from their budgets by identifying programs that do little to advance their core missions.

A 2010 survey by IE Discovery found more than 40% of government attorneys who are involved in EDD battles say that their EDD burden grew in the past year. Because of budgetary and other constraints, 70% of EDD projects are handled in-house; fewer than 20% are outsourced. "The theory is that government employees have more muscle than the opposition," says Chris May, CEO of IE Discovery. "But I think a lot of times, people perceive resources that just aren't there."

Not only do agencies lack resources, but often vendors are not an option because of statutory prohibitions against sharing information with outside parties. "It's fair to say the government has to find its own way to deal with a lack of resources, because we don't have the option of going into debt," says Shonka. "Even if the budget is there to work with contractors, there are often too many complications to even let that be a consideration."

Agencies operate under new orders to lean heavily on electronic recordkeeping, but without EDD budgets. U.S. CIO Vivek Kundra launched a "Cloud First" policy in 2010; the 2009 Open Government Directive makes transparency and collaboration an explicit rule, regardless of technical hurdles in producing records.

Government litigators often manage EDD without proper software. For example, without automated litigation holds, agency attorneys must contact custodians via e-mail; manually manage documents; and track ESI via spreadsheets.

But there is some good news. Several agencies are trying to incorporate EDD protocols into business processes, such as archiving e-mail to make it more accessible for EDD.

• At the FTC, Shonka and Holly Frost, assistant director, technology and information management, have been building a software suite to manage electronic records through all phases of litigation or records requests.

• Program manager Larry Creech has deployed a system to automate litigation holds for the U.S. Postal Service.

• The Department of Education has built a workflow system for records management, FOIA requests, and EDD, led by Harley Methfessel, senior counsel for IT.

Just as David Shonka has taken on a leadership role in e-discovery, other agencies now have established dedicated EDD attorneys. Patrick Oot (author of this issue's cover story), joined the Securities and Exchange Commission earlier this year as special counsel for e-discovery.

The Department of Justice has Allison Stanton, director of e-discovery for the civil division, and Sarah Montgomery, senior litigation counsel for e-discovery, who fulfills a similar role for the criminal division. Last year, the DOJ's civil division and the executive office for U.S. Attorneys each acquired 12 new positions and millions of dollars in new funding just for electronic discovery and litigation support.

Baron points out that government agencies have distinct missions, so it is impossible to imagine a one-size-fits-all EDD approach. "Every agency must build on legacy platforms," says Baron. "At NARA, we use Groupwise, not Outlook, for our own e-mail, making us different from many other agencies. But you have to work with what you have."

There is no option to ignore EDD, which means government attorneys must deal with the burden. As the saying goes, "necessity is the mother of invention." With the ongoing budget crisis, these agencies will likely have to continue to find ways to conduct e-discovery searches — and production of discoverable data — on their own, with little outside support. Fortunately, insiders say that agencies are developing EDD expertise in-house to manage discovery more efficiently.

Though this is true primarily for agencies that deal with high volumes of data and discovery requests, the growing EDD competence is a real phenomenon. But the question remains: can the government catch up to its private practice opponents? "In some ways government agencies are ahead of the game. A few sophisticated firms in e-discovery private practice are certainly well ahead of many government attorneys in having access to the latest software and technologies, like predictive coding," says Baron. "But you are beginning to see similar capabilities in federal agencies too."

Government Agencies Look Within to Solve E-Discovery Woes

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