In a week of back-and-forth between both sides of the case, the e-discovery bill ran up to nearly $85,000. And that was to resolve a minor issue, a niggling point about how the client notified witnesses that they had to save certain documents in advance of a lawsuit.

“They just didn't do it quite right; they didn’t have a real solid process,” recalled Alon Israely, senior e-discovery adviser at BIA, a New York-based digital discovery services vendor that worked on the case. “It wasn’t a big deal. We didn’t even have any hearings. But even in only a week, it quickly got up to around $85,000. In retrospect, when we analyzed it afterwards, if they were to put $35,000 worth of fixes to their notification system, it would have been about $5,000 of lawyering and two little letters and nipped the issue in the bud.”

To some, of course, e-discovery can seem less like a bud to be nipped and more like a monster to be slain. But, even as e-discovery costs can explode beyond anyone’s control, efforts are under way to understand and control this phenomenon.

As one guest at a recent seminar put on by the Federal Bar Association in Chicago said, the cost of e-discovery can rapidly eclipse the budget of many small countries. The amount of e-data can consume a terabyte of computer space. “I’m not sure what that means,” the same guest said, “but it sounds really big.” It is. One terabyte is equal to 1 trillion bytes.

Further, recent court rulings have made it clear that, in this era, companies must adequately preserve all documents that could be relevant to a lawsuit. In January, the same judge from the Southern District of New York who ruled in the series of seminal e-discovery cases, Zubulake v UBS Warburg , 217 FRD 309 and 220 FRD 212 (S.D.N.Y. 2003), went even further. In Pension Committee of the Univ. of Montreal Pension Plan v. Banc of Am. Securities ., No. 05-9016 (S.D.N.Y. Jan. 15, 2010), Judge Judith Scheindlin determined that parties could be sanctioned if they are negligent in how they wrangle e- discovery.

Negligence could be, among other problems, a party’s failure to issue a written litigation hold (the document that tells the other party what documents must be preserved); a party’s failure to stop automatically deleting e-mail; or the delegation of e-discovery obligations to inexperienced employees.

The 7th Circuit Electronic Discovery Pilot Program, the nation’s only pilot program with principles being adopted, followed and tested, intends to tame e-discovery. Now in its first phase, the program was developed by a committee of about 40 lawyers, judges, in-house counsel and government attorneys. Its goal is to promote “early and informal” exchange of e-discovery. Its principles put a premium on cooperation, not just to make the process smoother but, in doing so, to actually reduce the costs of e-discovery.

“The problem with e-discovery is we so rarely get to the communication. Even though it looks like a monster, so big and so expensive, I think this is going to help in the end to break through a lot of communication barriers,” U.S. Magistrate Judge Nan R. Nolan, who chairs the pilot program, told the seminar audience. “We’re struggling with this. It’s an old culture. We can no longer put up with the culture because of the cost, and the thing is, when we’re suggesting cooperation, in this recession, I am sure you are hearing from your clients that we can no longer afford this.”

via Chicago Lawyer Magazine – Changing the culture of e-discovery.