Recent Survey Highlights ESI Preparedness, Ownership and Challenges in the US and UK
Regina Jytyla, Esq., Kroll Ontrack
The practice of law around the world is at a tipping point, driven by the technology revolution. Corporations are facing significant risks when confronting litigation, investigations and regulatory matters involving electronically stored information (ESI). The ESI Trends Report by Kroll Ontrack reveals that despite the gravity of potential consequences, most lawyers in both the United States and United Kingdom are still struggling to understand the scope and breadth of issues involving ESI – let alone develop comprehensive plans to manage ESI when the necessity arises.
Survey Highlights
The survey highlights what type of ESI management measures businesses in the US and UK have in place and whether they are in a position to produce electronic evidence complying with legal and regulatory requirements. The survey’s key findings show several similarities and only a few differences between US and UK companies. Three key themes with regard to in-house counsel on both sides of the Atlantic emerged from this report: preparedness, ownership and challenges.
The most important finding from this survey is a severe lack of understanding, preparedness and enforcement by organisations regarding how to manage their ESI. Only 25% of US and 17% of UK in-house counsel claim to be fully up-to-speed with all ESI case law, developments and regulations. Even more astonishingly, approximately half of both US and UK respondents do not have any ESI policy at all. Given the educational and consulting resources available today, this lack of preparedness is unsettling.
As electronic communications increase exponentially each year, the issues will become ever more problematic for companies that fail to educate themselves and take action.
The costs associated with fines, sanctions and lost cases could be debilitating to some corporations. Legal teams should surround themselves with knowledgeable experts who understand the numerous complex technical details and legal considerations of ESI.
Responsibility for ESI
Importantly, the survey also finds immense confusion over who within a company is responsible for creating an ESI policy and who is accountable should the policy fail. Almost half of US and a quarter of UK in-house counsel believe the in-house legal department has primary responsibility for ESI strategy development. Conversely, most UK and US in-house counsel believe the CEO or Board should bear the brunt of responsibility should an ESI policy result in fines, sanctions or damages. Therefore, while the overall responsibility of creating an ESI policy lies largely with the in-house legal department, ESI is a business issue that affects nearly every department. A cross-development approach to ESI involving in-house counsel, IT staff, the Board, the Executive team and the Compliance department is thus crucial. If a cooperative approach is taken, accountability and responsibility will be shared by all those involved. Furthermore, the best written policy means nothing if it is not enforced and making enforcement a shared responsibility will better ensure compliance.
Lastly, the survey reveals that consequences, barriers and challenges abound when it comes to ESI. One consequence cited by nearly three-quarters of in-house counsel in the US and UK is lost time due to inefficient or non-existent ESI procedures. Lost time is lost money. This truism was reinforced when the majority of respondents in both the US and UK cited the financial impact of inefficient ESI procedures. Barriers in executing ESI policies were also cited. Lack of time and ownership – both internal in nature – were the top two barriers found in both countries. In addition, US and UK respondents cited several ESI challenges. Notably, the biggest challenge cited in the US is unmanageable volume, while the UK cited insufficient training. In a hastily evolving area of law and technology, these findings reiterate the multi-faceted nature of ESI issues and the vital importance of implementing a cooperative approach to manage all aspects of ESI – from volume and budget, to technology and training.
Incorrect handling of ESI in litigation and investigations leads to a number of serious consequences for organisations. Despite the incumbent threat to our organisations, research shows that corporations are still failing to take the threat of data mishandling seriously and are not implementing company-wide policies to adhere to their duties under the law. The bottom line is that the senior decision makers within organisations need to take ownership of this issue and ensure that a multi-disciplinary ESI team works together to develop a policy and enforce it within the company. Organisations that choose to take control of their ESI practices are emerging stronger and better equipped to protect informational assets, increase operating efficiency and realise cost savings.
To download a complimentary copy of the ESI Trends Report, please visit: www.krollontrack.co.uk/esireport.
Regina Jytyla Esq., is a Staff Attorney at Kroll Ontrack's Legal Technologies division in Minneapolis.
Disclaimer
This document is neither designed nor intended to provide legal or other professional advice but is intended merely to be a starting point for research and information on the subject of legal technology. While every attempt has been made to ensure accuracy of this information, no responsibility can be accepted for errors or omissions. Recipients of information or services provided by Kroll Ontrack shall maintain full, professional, and direct responsibility to their clients for any information or services rendered by Kroll Ontrack.
Copyright 2007 Kroll Ontrack, Inc & Kroll Ontrack Legal Technologies Ltd.
