e-Discovery Conference: Some of What You Missed
In mid-October, <i>e-Discovery Law & Strategy</i>'s parent company, ALM, joined with the Business Development Institute (BDI) to offer ALM's first e-discovery conference in New York City. The faculty featured several e-discovery luminaries ' here are some highlights in case you missed it.
Bringing Electronic Discovery In-House
Is there a pot of gold at the end of the e-discovery rainbow? <br>As the amount of litigation, regulatory and compliance-related e-discovery grows to epic proportions, some law firms are wondering whether it's time to make capital investments to bring e-discovery processing in-house rather than outsourcing it to vendors.
Taming An Unruly Process
If information is power, then it's not the amount of information that gives us value, but access to the right information at the right time, and in the most suitable form. <br>This is especially true of e-discovery, which, despite all the supportive tools and technologies, has become a complex, time-consuming, inefficient and often costly process. <br>As a result, litigators and general counsel can benefit greatly from targeted data extraction, a process that compiles and organizes all electronic data associated with a case, then automatically extracts a specified subset of information.
Big Brother Is Watching
Companies considering outsourcing today, and companies that have already outsourced significant functions and processes, face an increasingly complex web of domestic and foreign laws and regulations at various levels of government. Compliance with those laws in the context of an outsourcing transaction poses a considerable and growing challenge. This article examines three of the hottest topics in the area of regulatory compliance in outsourcing: Sarbanes-Oxley, privacy, and legislative initiatives focusing on offshore outsourcing.
Ethics and Compliance Programs
Last month, we discussed the fact that a recurrent task facing managers of Ethics and Compliance programs is to make sure their programs are effective, and to demonstrate this effectiveness to both internal and external audiences. We reviewed internal constituencies, including integration with business processes; clear written standards and controls; effective training and communication; and regular monitoring and evaluation. This month, we focus on external constituencies.
The Little Transaction with Big Complex Issues
In January 2003, I received a call from the Chairman of the Board of a long-time client, Grand Toys International, Inc. He asked me to attend a negotiating session for a potential double acquisition by Grand that would fundamentally change this sleepy Nasdaq SmallCap-listed company. I sensed that that this would not be a small undertaking. But I never imagined that the transaction, even after one of the two acquisitions were abandoned, would take nearly 19 months to complete and would involve re-domesticating Grand offshore; dealing with complex proposed tax legislation targeted at preventing large, U.S.-based multinational corporations from avoiding U.S. income taxation; maintaining Grand's Nasdaq listing; and preparing a complex registration statement.
New Tax Requirements for Nonqualified Deferred Compensation
The implementation of nonqualified deferred compensation arrangements providing for distributions upon certain types of arguably foreseeable "hardships" (<i>eg</i>, to pay for college) or in return for a "haircut" forfeiture, cut against the notion that the revenue deferral effect on the government is outweighed by the benefit of permitting the accumulation of additional retirement funds, as these arrangements provide benefits which may not be used for purposes of retirement. The American Jobs Creation Act (the "Act") was passed by the House of Representatives on Oct. 7, 2004, and received final approval from the Senate on Oct. 11, 2004. President Bush is now expected to sign the Act into law before the end of 2004. The Act enumerates an array of requirements intended to curb perceived abuses in the realm of executive compensation. In many ways, the thrust of the new requirements is to conform a number of aspects of the operation of nonqualified deferred compensation arrangements to those applicable to tax-qualified "401(k)" plans. Consequently, to be tax-effective under the new requirements of the Act, deferred compensation arrangements will need to operate in a fashion more akin to true retirement arrangements.
Jury Selection and Media Access
For laypersons and lawyers alike, the trial of Martha Stewart last winter was irresistible legal theater. But if, between all the discussions of Ms. Stewart's courtroom attire and lunchtime dining habits, you missed seeing how the district court and Second Circuit wrestled with the issue of media access to jury selection, you may want to give <i>ABC, Inc. v. Stewart</i>, 360 F.3d 90 (2d Cir. 2004) a read.
Document Destruction Horror Stories
Three recent cases involving government inquiries provide sobering lessons about electronic evidence to corporations and their lawyers. The most notorious, <i>U.S. v. Arthur Andersen, LLP</i>, resulted in criminal convictions. Another, <i>In the Matter of Banc of America Securities LLC</i>, involved SEC enforcement action. The third, <i>United States v. Philip Morris</i>, arose in a Department of Justice civil suit. If nothing else, the cases demonstrate that corporations exposed to such investigations must implement effective and well-maintained information management systems.
