Kazeon says spend five figures to avoid tens of millions of dollars in legal discovery expense. Its IS1200-ECS product will automatically find, inspect, index metadata and content, classify and catalogue electronic documents of over 700 file types, from servers to notebook computers, and create a discovery database with all relevant documents included and tagged, e.g. Case-1452-Franklin.
Why does this make any sense? It's to do with the amount of corporate litigation in the USA.
Nine out of ten US corporations are involved in legal disputes. The disputes generally involve 'discovery' which is a court-sanctified search of the target company's data files for all material relating to the matters under dispute. The majority of companies involved in litigation use external data discovery (EDD) service providers to trawl their paper and electronic document mountains. This can involve huge expense, up in the tens of millions of dollars area with the average market price for such paper and electronic document and review at $2,000/GB.
Michael Marchi, Kazeon's solution marketing VP, said: "The majority of documents trawled, 99 percent, are electronic. E-discovery is the number one new litigation-related burden for lawyers at companies with annual revenue exceeding $100 million. Average US companies with annual sales of $1 billion or more are engaged in 556 open legal cases, with about 50 new suits added yearly." (2006 survey by Fulbright & Jaworski LLP.)
The legal penalties for not obeying legal discovery requests can run to millions of dollars.
Companies providing in-house eDiscovery tools have seen rocketing growth. Zantaz is one such. From 2001 to 2005 Zantaz saw revenues increase over 3,500 percent.
Now the situation has been made worse by amendments to the US Federal Rules of Civil Procedure (FRCP) which draw the legal requirements much tighter around companies. Kazeon has taken advantage of this to launch the IS1200-ECS, the first product compliant with them.
Under FRCP Rule 26(b), parties in litigation must produce all 'electronically stored' information that is relevant and reasonably accessible. This includes online information in desktops, laptops, servers, and networked storage systems. In reviewing legal discovery requests, a requesting party may identify electronic sources containing information that the responding party is not currently including in their own eDiscovery processes. In other words, all of a company's data, structured and unstructured is now in play.
Consequently, and much to the satisfaction of business development staff in eDiscovery product suppliers no doubt, businesses must now build sufficient processes and capabilities into their IT infrastructure in order to satisfy these new legal requirements.
A Kazeon spokesperson said: "This product has been tailored specifically for the new FRCP amendments and is the first product to do this." It has integrated features which enables legal and IT staff to quickly create a “golden copy” of the discoverable data needed in a dispute, produce a PST or ZIP file, and then safely secure it. It also proactively trawls the entire electronic document store inside a corporation and has an eDiscovery database of all content ready to roll whenever legal discovery requests come in.
The IS1200-ECS' starting price is $80,000. NetApp will resell the product.
We can expect Zantaz and other eDiscovery product suppliers to react quickly. The market is huge, growing fast and US companies will find the opportunity to avoid seven to eight figure sums by buying five to six figure products irresistible.
The impact of the FRCP changes on companies outside the USA will be non-existent. Naturally their US subsisdieries, if they exist, will have to study the impact of the changes, assess the lkelihood of their engagement in litigation, and assess the need of buying their own e-discovery tools, adding yet more cost to the business, responsibility to the IT department, and overhead for the rest of the business to bear.
Suppliers of eDiscovery products will be looking at compliance rules and records retention rules and promoting the view that an in-house discovery/archiving/compliance tool is worthwhile because it hits three targets instead of just one. Ditto suppliers of eDiscovery services.
The whole area is fast-developing and it probably makes sense to hold your horses and see how it develops before deciding to buy a product or a service.
Alternate product suppliers to Kazeon are Clearwell Systems, Index Engines and Zantaz which also supplies online services.
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