Tech Shout!

All companies in the United States of America will now have to keep track of all e-mails, instant messages and any other electronic documents that are generated by their employees. This new formality, which takes effect from toady itself, has come into being due to new federal rules in the U.S.

The new federal rules basically require companies and other entities involved in federal litigation to produce “electronically stored information” as part of the discovery process, when evidence is shared by both sides before a trial. This new rule was approved by the Supreme Court way back in April this year, but has only come into affect from today itself.

According to Alvin F. Lindsay, a partner at Hogan & Hartson LLP and an expert on technology and litigation said that this change makes its more important for companies to know what electronic information they have and where exactly it is stored. Under the new rules, an information technology employee who routinely copies over a backup computer tape could be committing the equivalent of “virtual shredding”.

Legal experts have said that both federal and state courts have increasingly been requiring the production of relevant electronic documents during discovery. Besides, the new rules also require that lawyers provide information about where their clients’ electronic data is stored and how accessible it is much earlier in a lawsuit.

Nowadays, there are loads of “e-discovery vendors” and these businesses ranked in approximately $1.6 billion in 2006. That figure could just double in 2007.

James Wright, director of electronic discovery at Halliburton Co., said that large companies are likely to face higher costs from organizing their data to comply with the rules. In addition to e-mail, companies will need to know about things more difficult to track, like digital photos of work sites on employee cell phones and information on removable memory cards, he said.

Another expense that is most likely to stem from these new rules is that lawyers will have to spend additional time reviewing electronic documents before turning them over to the other side. While the amount of data will be narrowed by electronic searches, some high-paid lawyers will still have to sift through casual e-mails about subjects like “office birthdays” or maybe “office parties” in order to find information relevant to a particular case.

Martha Dawson, a partner at the Seattle-based law firm of Preston Gates & Ellis LLP who specializes in electronic discovery, said the burden of the new rules won’t be that great. Companies will not have to alter how they retain their electronic documents, she said, but will have to do an “inventory of their IT system” in order to know better where the documents are.

The new rules also provide better guidance on how electronic evidence is to be handled in federal litigation, including guidelines on how companies can seek exemptions from