Managing Your Data Landfill: How Electronic Records Management Can Protect Client Data and Generate New

Opportunities for Law Firm Growth.

Author: Eric Everson, MBA, MSIT-SE Juris Doctorate Candidate, May 2013 Florida A&M University College of Law

Introduction: Lawyers are in the business of information. In todays information economy, backing up your companys data is more than a good idea its an absolute necessity. (PC Magazine, 2013) In an environment where data threats such as viruses, storage faults, and hackers are an everyday occurrence, law offices are not an exception to the risks of data loss. As data storage costs come down, lawyers are especially prone to becoming data hoarders. The problem with data hording is that the amount of information we are generating is going up exponentially while the cost of storing it is not going down fast enough for us to be able to store all of it. (Forbes, 2012) While some data hording tendencies can have their advantages, it is important to have an effective Electronic Records Management (ERM) strategy in place to prevent the creation of a data landfill. An effective ERM strategy will enable lawyers to better understand, protect, and leverage the data they store to protect client confidentiality.

What is ERM? Electronic Records Management (ERM) simply implies automation of records management processes and procedures. (The U.S. National Archive and Records Administration, 2013) The first big misconception about ERM is that the E denotes the electronic nature of the record itself. The truth is, we do not live in a paperless system and many industries remain very paper-based. An effective ERM strategy is about putting in place an system that organizes the information that your business stores. Despite the transformative introductions of eFiling and eDiscovery, for lawyers, much of the legal system remains driven by paper records. While much of this paper will be tailored to the management of electronic records, it is important to carve out this distinction as ERM covers both paper and electronic records.

Within the context of electronic records, attorneys are increasingly generating, handling, and storing electronic files. The most basic definition of an electronic file is one that includes all files that are maintained in computer-readable form. Examples of popular electronic files that attorneys often encounter include: email, documents, images, and website content. The principles of ERM begin from the point that files are first encountered and are concerned with converting such electronic files into electronic records. What a lawyer decides to do with an email for example (read and save in the inbox, read and move to a designated email folder, read and reply, read and delete, do not read and delete, read preview and mark as junk, etc.) can lead to the first steps of an effective ERM strategy. As the laundry list of examples just provided demonstrates, not all emails are handled the same; this is true of all electronic files. In the example when a new client contacts the law firm, the collection of client data can also become a point of first encounter for ERM purposes. If intake software is used to capture the clients personal information and reason for contacting the firm, the system will generate an electronic record of its own. Additionally, upon an initial meeting with a client, the client may provide certain electronic files to the attorney. In essence, the foundation of establishing an effective ERM strategy is rooted in understanding the data, where it enters the business, and how it is stored. As the ABAs Records/ Document Management website declares, The core asset of every law firm and legal organization is information. (American Bar Association, 2013) Implementing an ERM strategy is a great way to protect client data.

Data Basics: Data is a term that gets tossed around casually across many industries with little consideration as to what is actually meant by the term. To understand data better, it is important to understand a foundational computer science distinction between data, information, and knowledge. In practice, the term data is regularly applied to mean all three however for purposes of ERM, the classic data pyramid (University of New England, 2004) requires us to separate the three. Data is considered to be a precursor to information; at its base, data and facts are synonymous. Computer scientists might generalize that data is a series of observations, measurements, or facts. It is just important to remember that though data is generally just a collection of facts, data is not always factually accurate. From data, we can derive information. Information is the application of data and is generally assigned some meaning or purpose. Further, knowledge is what humans gain from their perceptions and understanding of information. ERM strategies concentrate on the collation of data and information and establish an organized framework for purposes of storage and accessibility. For attorneys one of the great vulnerabilities that electronic records introduce is the risk of exposing confidential client information. Data breaches happen every day, thus it is important to develop an ERM strategy that helps you best protect the information that your clients entrust in you. While it may seem wise to just save everything, it is important not to adopt habits that lead to the creation of data landfills.

Data Landfill: Dont Be a Data Dumper Did you know that just like the eggs in your refrigerator, data has an expiration date? While it will not cause foul odors to emit from your hard drive, hording data beyond its expiration date can contribute to system strain and even data loss. While a strict read and delete policy is never recommended, a critical component of establishing an ERM strategy is understanding how long you have to hold on to certain records. It is important to establish an organized approach to storing records that allows you to manage stored content rather than creating a place to dump your data. At the forefront of managing your data is identifying how long to store it. One way to handle the storage period is to establish a record retention policy with expiration dates that signal acceptable deletion timelines (also known as defensible deletion). While the type of record will be determinative of storage duration, many lawyers follow the ABAs Sample Document Retention Policy. (American Bar Association, 2010) Even the development of case law on the topic of electronically stored information (ESI) does not require perpetual retention. The general standard for storage of electronic records is, Evidence that must be preserved includes documents, electronically stored information, and physical evidence that the party knows or reasonably should know is relevant to claims or defenses in the action, is reasonably calculated to lead to the discovery of admissible evidence, or is reasonably likely to be requested during discovery. (In re PFIZER INC. SECURITIES LITIGATION, 2013) While knowing how long to keep material is critical, equally important is the ability to find what you are looking for. In implementing an ERM strategy, one of the most important components is establishing an indexing solution. There is an abundance of file indexing software on the internet. Selecting a solution that fits your needs is often a process that requires

an attorney to select the software that fits their needs best. One of the deficiencies of most file indexing solutions is that they are exclusively designed for electronic records indexing which fails to incorporate paper records. Though a paperless law firm may be the reality for some, a stroll through most law offices will demonstrate the continued reliance on paper within the practice of law. This may require that in addition to an indexing system that a reliable process is established to electronically track paper records too. For smaller law offices this may be as simple as a tracking spreadsheet, where others may require databases or even complete document tracking systems. No matter the requirements of ones storage, it is all for nothing if you cannot find what you need when you need it. ERM solutions do not have to be expensive and generally are not very expensive to establish. The real cost in an ERM strategy is in the ongoing management of the records, which marks the importance of deleting as your record retention periods expire.

Managing the Costs of Your Data: How much does it cost to store a gigabyte (GB) of data? Though there are a number of figures available the general range is: $1.50-1.80 per GB. (PC World, 2012) The thing is, data storage solutions have experienced a decrease in recent years, yet while that price may be reflective of data storage, it fails to capture the cost of managing data once it has been stored. In her book (that every attorney should probably read), e-Discovery for Dummies, author Linda Volonino correctly asserts, Even if storage is cheap, management is costly. Good ERM is expensive because of the management, not the storage. (Volonino, 2006) The management of information is literally an entire discipline within computer science, but even at a basic level

there are some things that can be done to reduce the costs of data management. We have already touch upon the importance of record retention policies and indexing solutions, but another key method in reducing data management costs is through creating a prioritization process. A prioritization process within information management systems allows an ERM administrator to determine which files are of greater importance for purposes of storage. One approach for example is to consider the intrinsic or extrinsic value of the data. If an attorney spends hours and hours doing research in preparation of a legal matter, chances are that attorney may want to archive that collated collection of data for future use. Additionally, if an attorney pays for certain information (such as case research, eDiscovery processing, industry reports, consulting attorney memorandums, etc.) this information is likely to be assigned a greater prioritization value than something that could simply be Googled. Another way that data management costs can be driven down is through cloud storage solutions. Modern cloud storage providers offer back up of computers and external hard drives in real time without affecting network performance. Regardless of where your employees access the data, the cloud files remain accessible via any internet-connected computer, smartphone, or notebook. As the cloud-based eDiscovery software company LogikCull declared in a recent Tweet, Our biased belief is that Cloud providers are like banks and thus have a higher mandate to protect data. Increasingly cloud-based storage is proving to be more secure than offline storage as it is much less susceptible to hard drive or computer component failure, or even inadvertent user error. One way to utilize the cloud as a method of efficient data management is to use it as a vehicle for spring cleaning. If you have a data landfill on your hands, utilize a cloud-based storage solution to sort out and store all of your active storage data.

The cloud can be a valuable asset for attorneys looking to improve stored file accessibility, while providing valuable safeguards for client data. As one cloud based storage provider assures, Carbonite helps you rest easy, knowing your data is encrypted and backed up safely offsite. Backed up files are encrypted at all times and stored on redundant disk arrays at one of Carbonites highly secure data centers. Carbonites browser-based admin dashboard lets you monitor your business backup status from one central point, allowing you to easily manage the backup of your entire business. And best of all, its all for a predictable annual cost you can budget with confidence. (PC Magazine, 2013)

Leverage Your Data: At the onset of this paper, a simple declaration was made, Lawyers are in the business of information. Despite this reality, few lawyers seek formal training in areas of information management systems or data analytics. While attorneys may well be in the business of information, chances are they are sitting on information that could be better leveraged. Who of your current clients are statistically more likely to require legal representation in the next 3 months? What is the geographic distribution of the law firms clients with respect to their law offices and advertising expenditures? When do the firms pricing methods cross into profitability? Where do law firm clients anticipate spending their money over the next year? Why does a client prefer one attorney over another? How often does a follow up call from an attorney result in the generation of new business for that attorney? Maybe you think you know the answers to these questions intuitively, but these are all questions that could be answered more precisely with data. ERM, while a means of protecting client confidentiality and improving

internal efficiencies also provides a means of leveraging data. Outside of the legal industry, businesses are rapidly turning their attention to the importance of business intelligence systems that can grow from their ERM strategy. Business intelligence (BI) is a broad category of applications and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions. (SearchDataManagement, 2013) Think of BI as the dashboard cluster on your car; it tells you all kinds of things like your fuel level and depending on your model how many miles you can drive at your current miles per gallon rate before empty. Though BI technologies are generally focused on larger enterprise users, law firms can also leverage BI. (Edge International, 2012) BI for law firms is about capturing the right KPIs or Key Performance Indicators for example fees billed, fees collected, partner leverage (hours that equity partners at the firm generate), or contribution (a percentage of profit per equity partner). Much of the historic data in these examples can be mined from ERM storage and from there predictive analytics can be applied to leverage accurate BI models.

Conclusion: With new injections of technology, the business of law is changing. While the core asset of every law firm and legal organization is information, it is how this information is managed that will determine the successes of tomorrows law firms. Clients have heightened expectations about how lawyers manage their confidential information and as such an effective ERM strategy offers opportunity to meet this demand while opening new avenues of BI leverage. ERM does not come without its costs, but when properly implemented it can add heightened data security for law firms. Currently the three main reasons for data to require

protection are privacy (simple contact details such as an email address), custody (information whose leak could lead to identity theft) and confidentiality (private documents, contact lists), but high security data, such as bank details and medical records, is expected to overtake confidential information in volume over the next eight years. (The Guardian, 2012) Law firms increasingly handle each of these types of data and must prepare for increases in data volume. Volumes of data are projected to reach 40ZB (zettabytes) by 2020, or 5,247 GB per person. (Id.) To embrace this data explosion, ERM strategies can be created by mixing and matching the technologies and processes that fit the law firm best. Rarely can any organization find a one size fits all implementation solution for ERM. Adopting an effective ERM strategy is the first step in moving from a data dumpers digital landfill toward a cutting edge law firm operating with all of the advantages of enterprise level business intelligence analytics. While the law firm will emerge healthier and more technology proficient, it will also present new opportunities to safeguard confidential client information.

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