Companies subject to US law are coming to terms with new rules expanding the types of electronically stored information that companies could be required to produce in a lawsuit.
As of 1 December 2006, new guidelines set by the US Supreme Court, called the Federal Rules of Civil Procedure, go into effect. As a result, companies that do not keep close tabs on personal digital assistants (PDAs), instant message conversations and other forms of electronic data may soon be in for a nasty surprise, should they find themselves in court.
It means companies will now be expected to retain and produce a broader range of digital data than before. Flash drives, voicemail systems and instant message archives will all be included in discovery procedures.
According to a recent online survey, executives are ill-prepared for the new rules: A study carried out late late year by Deloitte Financial Advisory Services found almost 70% of respondents (including chief financial officers, lawyers, controllers and tax and finance directors) said they require more training on their own corporate record retention policies and procedures.
Deloitte said the time is ripe to examine data retention strategies. For most companies, the biggest worries stemming from the use of undisciplined instant messaging will be skyrocketing costs and lost productivity during discovery, said Jeffrey Ritter, co-founder of Waters Edge Consulting, a US information management consultancy. "The burden facing companies is cost containment," he says.
Companies can get into real trouble when the CIO, general counsel and records manager are not on the same page, Ritter adds. "The most significant challenge for many companies is the lack of a teamed approach to evaluating the risk."