Survey Shows More than Half of US Businesses Are Not Prepared for eDiscovery

On October 21, 2009, Kroll Ontrack announced the results of an eDiscovery readiness survey of "commercial businesses" in the US and UK.  Most of the surveyed businesses have a document retention policy, but fewer than half (46% of the surveyed US businesses) say that they have an "eDiscovery readiness strategy."  For a link to the Kroll Ontrack press release announcing the survey, click here.  You can download the whole survey here.

Businesses are concerned about eDiscovery and are aware of it as an issue, and almost 80% of the businesses think their eDiscovery policies are defensible.  Nonetheless, one of the key takeaways from the survey is that many of the businesses that think they are ready for eDiscovery do not have what Kroll Ontrack refers to as an "eDiscovery Readiness Strategy."  Part of that strategy would include what lawyers call a "litigation hold policy":  a policy to preserve relevant information when the business can reasonably anticipate litigation or a government investigation.  A litigation hold policy would call for the suspension of routine data destruction under a document retention policy when the business can foresee litigation or an investigation.  Only 57% of US companies' representatives responding believed that their businesses have a litigation hold policy.  In other words, many companies may have a false sense of security that they are ready for eDiscovery when, in fact, they are missing a crucial component of eDiscovery readiness. 

In another key finding in the survey, Kroll found that most companies have updated their policies to cover mobile devices, but far fewer have updated their policies to account for social networking, instant messaging, virtualization, and cloud computing.  Moreover, the survey respondents said that they have doubled eDiscovery spending over the past year.  Most of the surveyed professionals foresee the volume of information they need to produce in discovery increasing or at least staying the same.  Thus, most respondents do not see the problem taking care of itself due to decreased volumes of electronic data discovery.  These results show why cost-containment is a critical part of any company's eDiscovery strategy. 

Finally, it is clear that the recession is taking a toll on eDiscovery readiness, with decreased budgets and headcounts.  Companies need to do more work with fewer people and less money.  In the meantime, companies remain at risk without planning and implementing sound eDiscovery readiness strategies. 

Stephen Wu

Partner, Cooke Kobrick & Wu LLP

www.ckwlaw.com

swu@ckwlaw.com

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