Do organizations really have formal information disposal processes…I think NOT!

Do organizations really have formal information disposal processes…I think NOT!

Do organizations regularly dispose of information in a systematic, documented manner? If the answer is “sure we do”, do they do it via a standardized and documented process or “just leave it to the employees”?

If they don’t…who cares – storage is cheap!

When I ask customers if they have a formal information disposal process, 70 to 80 percent of the time the customer will answer “yes” but when pressed on their actual process, I almost always hear one of the following:

1.    We have mailbox limits, so employees have to delete emails when they reach their mailbox limit
2.    We tell our employees to delete content after 1,2, or 3 years
3.    We store our records (almost always paper) at Iron Mountain and regularly send deletion requests

None of these answers rise to an information governance and disposal process. Mailbox limits only force employees into stealth archiving, i.e. movement of content out of the organization’s direct control. Instructing employees to delete information without enforcement and auditing is as good as not telling them to do anything at all. And storing paper records at Iron Mountain does not address the 95%+ of the electronic data which resides in organizations.

Data center storage is not cheap. Sure, I can purchase 1 TB of external disk at a local electronics store for $150 but that 1 TB is not equal to 1 TB of storage in a corporate data center. It also doesn’t include annual support agreements, the cost of allocated floor space, the cost of power and cooling, or IT resource overhead including nightly backups. Besides, the cost of storage is not the biggest cost organizations who don’t actively manage their information face.

The astronomical costs arise when considering litigation and eDiscovery. A recent RAND survey highlighted the fact that it can cost $18,000 to review 1 GB of information for eDiscovery. And considering many legal cases include the collection and review of terabytes of information, you can imagine the average cost per case can be in the millions of dollars.

So what’s the answer? First, don’t assume information is cheap to keep. Data center storage and IT resources are not inexpensive, take human resources to keep up and running, and consume floor space. Second, information has legal risk and cost associated with it. The collection and review of information for responsiveness is time consuming and expensive. The legal risks associated with unmanaged information can be even more costly. Imagine your organization is sued. One of the first steps in responding to the suit is to find and secure all potentially responsive data. What would happen if you didn’t find all relevant data and it was later discovered you didn’t turn over some information that could have helped the other side’s case? The Judge can overturn an already decided case, issue an adverse inference, assign penalties etc. The withholding or destruction of evidence is never good and always costs the losing side a lot more.

The best strategy is to put policies, processes and automation in place to manage all electronic data as it occurs and to dispose of data deemed not required anymore. One solution is to put categorization software in place to index, understand and categorize content in real time by the conceptual meaning of the content.  Sophisticated categorization can also find, tag and automatically dispose of information that doesn’t need to be kept anymore.  Given the amount of information created daily, automating the process is the only definitive way to answer ‘yes we have a formal information disposal process’.


Defensible Disposal means never being accused of spoliation for hosting “Shred Days”

U.S District Judge Ronald Whyte in San Jose reversed his own prior ruling from a 2009 case where he issued a judgment against SK Hynix, awarding Rambus Inc. $397 million in a patent infringement case. In his reversal this month, Judge Whyte ruled that Rambus Inc. had spoliated documents in bad faith when it hosted company wide “shred days” in 1998, 1999, and 2000. Judge Whyte found that Rambus could have reasonably foreseen litigation against Hynix as early as 1998, and that therefore Rambus engaged in willful spoliation during the three “shred days” (a finding of spoliation can be based on inadvertent destruction of evidence). Because of this recent spoliation ruling, the Judge reduced the prior Rambus award from $397 million to $215 million, a cost to Rambus of $182 million.

Two questions come to mind in this case; 1) why did Rambus see the need to hold “shred days”?, and 2) did they have an information governance policy and defensible disposal process? As a matter of definition, defensible disposal is the process (manual or automated) of disposing of unneeded or valueless data in a way that will standup in court as reasonable and consistent.

The obvious answer to the second question is probably not or if yes, it wasn’t being followed, otherwise why the need for the shred days? Assuming that Rambus was not destroying evidence knowingly; the term “shred-days” still has a somewhat negative connotation. I would think corporate attorneys would instruct all custodians within their companies that the term “shred” should be used sparingly or not at all in communications because of the questionable implications.

The term “Shred days” reminds many of the Arthur Andersen partner who so famously sent an email message to employees working on the Enron account, reminding them to “comply with the firm’s documentation and retention policy”. The Andersen partner never ordered the destruction or shredding of evidence but because anticipation of future litigation was potentially obvious, the implication in her email was “get rid of suspect stuff”. The timing of the email message was also suspect in that just 21 minutes separated Ms. Temple’s e-mail message to Andersen employees on the Enron account about the importance of complying with the firm’s document retention policy from an entry in a record of her current projects in which she wrote that she was working on a case involving potential violations of federal securities laws.

The Rambus case highlights the need for a true information governance process including a truly defensible disposal strategy. An information governance process would have been capturing, indexing, applying retention policies, protecting content on litigation hold and disposing of content beyond the retention schedule and not on legal hold… automatically, based on documented and approved legally defensible policies. A documented and approved process which is religiously followed, and with proper safeguards goes a long way with the courts to show good faith intent to manage content and protect that content subject to anticipated litigation.