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Considerations For Data Management
January 2006

Electronic information should be retained if a reasonable probability exists that it will be needed at some point to defend a legitimate business action or if the consequences of not having the information for discovery would be substantial. Having a retention strategy may be one of the most effective ways to address the preservation, retrieval and production of diverse digital content in response to legal action and to prevent some electronic information from inadvertently benefiting the opposing party. Data management should be a matter of official corporate policy, specifically defining the electronic information to be saved, the length of retention, and the parties involved in retention and deletion decisions for each type of electronic document the company generates such as word processing files, spreadsheets, emails and reports or output from other software systems.

When devising a system, be clear on the objectives, create written policies, develop a realistic implementation plan, stringently adhere to the policies and procedures, and be reasonable about the capabilities of the system.

Areas to consider when developing or modifying a data management system include:

• Document Retention.

Working out the details for retention periods should be a collaborative effort between company departments, General Counsel and/or outside counsel. The complexity of a system and its retrieval capabilities should be weighed against the company's immediate and ongoing legal needs. In Lewy v. Remington Arms, 836 F. 2d 1104 (8th Cir. 1988), the parameters for a good faith retention policy were identified by the court. Regarding length of retention, the guidelines indicate the period should be reasonable for the specific document type and need not be the same for each type of document. As an example, the court explained a three-year retention period for documents such as appointment books or telephone messages might be appropriate, but inadequate for customer complaints. The court defined a higher duty of preservation for some types of documents based on the frequency and magnitude of a company's lawsuits and identified records related to product claims as one category that would require a longer retention period. The court also stated the reason behind a company adopting a retention policy could be important when reviewed in court. If the policy was implemented to limit damaging evidence available to the plaintiff, then an adverse inference may be appropriate.

Other areas of retention companies should address include how the company handles automatic purge features, the use and reuse of backup tapes and retrieval of electronic data stored in offsite locations.

• Document Retrieval and Production.

The proof of a system's efficacy is how quickly and accurately information can be retrieved and whether retrieval is done without altering the original structure or content. While retrieval applies to currently used hardware and software, a company must be prepared to retrieve electronic data from unused systems and software as well as archived documents from tapes, CDs, disks and remote locations.

• Document Destruction.

Having consistently applied policies and procedures is important when it comes to destroying documents. It is much easier to defend the act of destroying electronic data when it is a matter of policy and there was no reasonable knowledge that the information would be needed in the future. Flagrant, careless or random acts of destroying documents could become a matter of serious contention if a company knew or should have known that destroyed information could have been evidence.

Once documents are identified for destruction, it is critical that complete eradication take place. Early drafts of documents can become revealing pieces of evidence for adversaries, offering glimpses into unedited or preliminary thoughts, strategies and original intentions. Computer forensics experts have proven their worth by locating information a company thought was destroyed. Upon recovery, the data becomes discoverable even though the company never intended to preserve the data. Procedures for destroying documents must be carefully planned so all versions of a document, wherever they reside, are destroyed when the retention period expires.