Redaction: The e-Discovery Killer App for 2009

The process of redaction evokes images of legal teams gathered along large conference tables surrounded by boxes stroking black permanent markers across brittle documents, while assistants shuttle between photocopiers and bates stamping machines to prevent an adversary from spotting a privileged smoking gun. In fact, a recent survey of law firms across the United States revealed that 74% of those law firms taking the survey still perform redaction manually, while only 44% now employ technology to protect privileged information. With the transformation of modern litigation from print to digital, those who incorporate and master the use of electronic tools have a distinct advantage.

The management of an exponentially increasing universe of electronically stored information (“ESI”) is challenging the legal community to more efficiently control discovery. “The question comes down to how to do it effectively,” says Eric J. Sinrod, a partner with Duane Morris LLP in San Francisco.

The answer is complicated by the 2006 amendments to the Federal Rules of Civil Procedure (“FRCP”), which expanded the types of sensitive and proprietary content that are discoverable, as well as how legal teams must handle them. A recent example of incorrectly redacting documents filed in the PACER federal court filing system highlighted the danger of publicly revealing information sealed by court order. Failure to comply with redaction rules can be costly both to a firm and its client.

Cost Containment and
The Dynamics of Review

In a January 2007 speech, Cisco Systems Inc. General Counsel, Mark Chandler, famously declared, “the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour.” Those hourly fees are often the largest part of the bill for discovery services and the more labor intensive the project, the greater its expense.

This is consistent with a Forrester Research report, which concluded that spending on e-discovery technology is expected to reach at least $4.8 billion by 2011, largely driven by an estimated 40% annual increase in gigabytes to be processed. This will have a critical impact given that some estimates place the cost of reviewing a single document at between $4 and $10.

It is, after all, no secret that review is the single largest cost center in the EDRM (Electronic Discovery Reference Model) continuum. In fact, as part of that review, it is the responsibility of legal counsel to properly redact all documents prior to production. As the recent survey reveals, most lawyers are manually searching through thousands of printed documents, wasting time and exposing their review to the likelihood of human error. The combination of impracticality and risk endanger a case before an adversary receives a sheet of paper.

And there is lots of it, given that almost 800 megabytes of recorded information is produced per person each year, 92% of which is in on a computer, backup tape or other storage media. When legacy data and duplicates are factored into this amount, the total is staggering.

The Essence and Importance of Electronic Redaction

The widespread impact of the amendments to the FRCP has heightened awareness of document review and production in ways that have transformed the process. Judges are more attentive and adversaries are far more sophisticated. “The importance of redaction cannot be overstressed,” says Dan Sedor, a partner and co-chair of the Discovery Technology Group with Jeffer Mangels Butler & Marmaro LLP.

Sedor notes that a single electronic file may contain privileged information, as well as relevant, non-privileged and discoverable details. He highlights that a producing party and its lawyers are obliged to produce the latter but must protect the privilege as to the former. “Platforms that permit redaction facilitate production of responsive information while protecting the privilege,” he adds.

Sedor's point is echoed throughout the legal community. Electronic redaction is different from standard redaction requiring the use of a Sharpie' marker or redaction tape and a lot of hope. It is the complete removal of content from an electronic document, making it irretrievable and unavailable for view, print, search or copy.

Using Redaction on Offense,
Rather Than Defense

The vast array of electronic media and explosion of potentially responsive data has presented creative counsel with a unique opportunity for evaluating a document production. “When we have not received any redacted documents, I am highly suspect of how they did their privilege review,” notes Helen Bergman Moure, a partner with K&L Gates LLP and a member of its e-Discovery Analysis and Technology Group. Moure remarks that redacted documents indicate a thorough review for privilege and a thoughtful release of material that is not privileged. Few or no such items often indicate that a party completely withheld any document that had any protected content at all. “That is not usually a defensible position to take,” she adds.

In fact, it is not even realistic. If most communication is completed through e-mail, including messages to and from legal counsel, there is unlikely to be a set of documents of any size that does not include some partially privileged documents. If, in fact, there are no redacted items, counsel has probably been overbroad in what he or she claims to be privileged. Challenging an adversary's privilege calls based on the lack of redaction is a persuasive argument to a special master or a judge, who tend to be much savvier than even just a few years ago.

Insufficient Redaction Could
Cause Irreparable Harm

The reason that most of the lawyers surveyed still prefer manual redaction over electronic removal is because improper redaction can have dire consequences. “You can't help but wonder if that black line across the text is going to remain once you print the document,” notes Fernando M. Pinguelo, a partner with Norris, McLaughlin & Marcus, P.A. and Co-chair of its Response to Electronic Discovery & Information Law Group. That crisis of confidence is only exacerbated by examples like the one cited in Schaefer v. General Electric, Civ. No. 3:07-cv-00858-PCD (D. Conn. May 31, 2007), where legal counsel for the plaintiff improperly redacted documents by simply placing black bars over the text set for deletion. Although a court
order mandated that the revealed information be sealed, the flawed documents were e-filed and available for download from PACER. When GE realized that readers of the material covered by the black lines could copy and paste the content into Microsoft Word, GE's attorneys filed an unsuccessful motion to dismiss.

While a lawyer who has produced insufficiently redacted information could be in violation of various ethical rules and subject to malpractice, FRCP Rule 26(b)(5)(B) provides a “claw back” provision where both parties can enter an agreement to return unwittingly produced protected materials without claiming waiver. In the absence of such an agreement, the court can decide if the documents must be returned or not. Regardless of the outcome, the damage is often irreparable.

In 2009, that damage will be unacceptable because electronic redaction will be anointed as the killer app and an essential tool in proper e-discovery processing. Using anything less than the latest technology is unnecessarily costly, but more importantly, potentially reckless.

The process of redaction evokes images of legal teams gathered along large conference tables surrounded by boxes stroking black permanent markers across brittle documents, while assistants shuttle between photocopiers and bates stamping machines to prevent an adversary from spotting a privileged smoking gun. In fact, a recent survey of law firms across the United States revealed that 74% of those law firms taking the survey still perform redaction manually, while only 44% now employ technology to protect privileged information. With the transformation of modern litigation from print to digital, those who incorporate and master the use of electronic tools have a distinct advantage.

The management of an exponentially increasing universe of electronically stored information (“ESI”) is challenging the legal community to more efficiently control discovery. “The question comes down to how to do it effectively,” says Eric J. Sinrod, a partner with Duane Morris LLP in San Francisco.

The answer is complicated by the 2006 amendments to the Federal Rules of Civil Procedure (“FRCP”), which expanded the types of sensitive and proprietary content that are discoverable, as well as how legal teams must handle them. A recent example of incorrectly redacting documents filed in the PACER federal court filing system highlighted the danger of publicly revealing information sealed by court order. Failure to comply with redaction rules can be costly both to a firm and its client.

Cost Containment and
The Dynamics of Review

In a January 2007 speech, Cisco Systems Inc. General Counsel, Mark Chandler, famously declared, “the most fundamental misalignment of interests is between clients who are driven to manage expenses, and law firms which are compensated by the hour.” Those hourly fees are often the largest part of the bill for discovery services and the more labor intensive the project, the greater its expense.

This is consistent with a Forrester Research report, which concluded that spending on e-discovery technology is expected to reach at least $4.8 billion by 2011, largely driven by an estimated 40% annual increase in gigabytes to be processed. This will have a critical impact given that some estimates place the cost of reviewing a single document at between $4 and $10.

It is, after all, no secret that review is the single largest cost center in the EDRM (Electronic Discovery Reference Model) continuum. In fact, as part of that review, it is the responsibility of legal counsel to properly redact all documents prior to production. As the recent survey reveals, most lawyers are manually searching through thousands of printed documents, wasting time and exposing their review to the likelihood of human error. The combination of impracticality and risk endanger a case before an adversary receives a sheet of paper.

And there is lots of it, given that almost 800 megabytes of recorded information is produced per person each year, 92% of which is in on a computer, backup tape or other storage media. When legacy data and duplicates are factored into this amount, the total is staggering.

The Essence and Importance of Electronic Redaction

The widespread impact of the amendments to the FRCP has heightened awareness of document review and production in ways that have transformed the process. Judges are more attentive and adversaries are far more sophisticated. “The importance of redaction cannot be overstressed,” says Dan Sedor, a partner and co-chair of the Discovery Technology Group with Jeffer Mangels Butler & Marmaro LLP.

Sedor notes that a single electronic file may contain privileged information, as well as relevant, non-privileged and discoverable details. He highlights that a producing party and its lawyers are obliged to produce the latter but must protect the privilege as to the former. “Platforms that permit redaction facilitate production of responsive information while protecting the privilege,” he adds.

Sedor's point is echoed throughout the legal community. Electronic redaction is different from standard redaction requiring the use of a Sharpie' marker or redaction tape and a lot of hope. It is the complete removal of content from an electronic document, making it irretrievable and unavailable for view, print, search or copy.

Using Redaction on Offense,
Rather Than Defense

The vast array of electronic media and explosion of potentially responsive data has presented creative counsel with a unique opportunity for evaluating a document production. “When we have not received any redacted documents, I am highly suspect of how they did their privilege review,” notes Helen Bergman Moure, a partner with K&L Gates LLP and a member of its e-Discovery Analysis and Technology Group. Moure remarks that redacted documents indicate a thorough review for privilege and a thoughtful release of material that is not privileged. Few or no such items often indicate that a party completely withheld any document that had any protected content at all. “That is not usually a defensible position to take,” she adds.

In fact, it is not even realistic. If most communication is completed through e-mail, including messages to and from legal counsel, there is unlikely to be a set of documents of any size that does not include some partially privileged documents. If, in fact, there are no redacted items, counsel has probably been overbroad in what he or she claims to be privileged. Challenging an adversary's privilege calls based on the lack of redaction is a persuasive argument to a special master or a judge, who tend to be much savvier than even just a few years ago.

Insufficient Redaction Could
Cause Irreparable Harm

The reason that most of the lawyers surveyed still prefer manual redaction over electronic removal is because improper redaction can have dire consequences. “You can't help but wonder if that black line across the text is going to remain once you print the document,” notes Fernando M. Pinguelo, a partner with Norris, McLaughlin & Marcus, P.A. and Co-chair of its Response to Electronic Discovery & Information Law Group. That crisis of confidence is only exacerbated by examples like the one cited in Schaefer v. General Electric, Civ. No. 3:07-cv-00858-PCD (D. Conn. May 31, 2007), where legal counsel for the plaintiff improperly redacted documents by simply placing black bars over the text set for deletion. Although a court
order mandated that the revealed information be sealed, the flawed documents were e-filed and available for download from PACER. When GE realized that readers of the material covered by the black lines could copy and paste the content into Microsoft Word, GE's attorneys filed an unsuccessful motion to dismiss.

While a lawyer who has produced insufficiently redacted information could be in violation of various ethical rules and subject to malpractice, FRCP Rule 26(b)(5)(B) provides a “claw back” provision where both parties can enter an agreement to return unwittingly produced protected materials without claiming waiver. In the absence of such an agreement, the court can decide if the documents must be returned or not. Regardless of the outcome, the damage is often irreparable.

In 2009, that damage will be unacceptable because electronic redaction will be anointed as the killer app and an essential tool in proper e-discovery processing. Using anything less than the latest technology is unnecessarily costly, but more importantly, potentially reckless.