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By Dennis Kennedy, Evan Schaeffer and Tom Mighell
September 2005
Dennis Kennedy (DK): Hurricane Katrina also blew away the idea we had for this month's column. We decided it was impossible for us to pretend it was business as usual when outside events were so tragic. While the human impact of these events is of far more importance than our thoughts on electronic discovery, we wanted to explore in this column some of the potential consequences of disasters like Hurricane Katrina on our subject area - electronic discovery.
Evan Schaeffer (ES): The impact of Katrina on law firms along the Gulf Coast was enormous. New Orleans alone was home to 7,500 lawyers, according to an article in the National Law Journal. Many lost not only their homes, but also their firms.
Tom Mighell (TM): The odds are that many of these firms, as well as other companies, will never recover from the disaster. I have read statistics that 40% of companies affected by a disaster such as this never re-open, and 80% are closed within five years of the disaster.
(DK): The first common assumption that lawyers like to make is that paper is better or paper is safer than information in digital or electronic format. How does that assumption stand up when file rooms of paper are sitting for days and weeks under water? While clerking for a judge years ago, I worked on a trial in which the building in which key records were kept was flooded. And, the water flooding the building was contaminated by toxic waste. Do you still have the same sense of comfort about paper that you had before Katrina? Do you feel that digital information is inherently less safe? I certainly do not.
(ES): Digital storage has its own problems, of course. Following the Challenger disaster, some electronic data on magnetic tapes was recovered off the Florida coast but was unreadable. Six weeks in seawater had corroded the tapes. I'm sure the floodwaters in New Orleans have posed many of the same problems, at least for those whose data was stored within reach of the water. Along other parts of the Gulf Coast, buildings were simply swept away-along with their digitally-stored information.
(TM): But here's where digital information at least has the advantage over paper documents. Given that most firms in New Orleans had ample warning of the coming hurricane, they should also have had time to make sure their computer backup tapes (or whatever format they were in) were located away from the office. A proper disaster recovery plan should include provisions for making sure the data backup is not located in the same place as the original.
(DK): Think of the volume of information that can be carried on DVDs, external hard drives and other digital media these days. I suspect that Tom will know how many bankers' boxes of paper documents will fit onto a 1-gigabyte USB drive. Once we get information in digital form, we move into the world of bits rather than atoms, as Nicholas Negroponte has said. It's hard to move atoms (i.e., paper) around, store them and deal with them. Imagine loading up all of those bankers' boxes and hauling them out of town ahead of a hurricane. In digital form, we can carry immense amounts of information in the form of bits on small, manageable devices. In fact, we can even get them out of danger and store them by transmitting them over the Internet.
(ES): Digital media can seem miraculous in a lot of ways. On the other hand, once I get my USB drive all loaded up and ready to go, I'm terrified I'm going to lose it. Companies affected by Katrina had much more serious problems. According to one article I read, IBM had at least 100 "disaster recovery clients" in the region destroyed by Katrina. The report from IBM wasn't good. Many companies thought they were ready for anything-after all, all their important data was stored in digital form and backed up-but weren't able to get their operations up and running when having to rely solely on the back-up data. Others had no disaster plan in place at all.
(TM): Are we talking about personal or firm-wide disaster recovery here? I agree that it's a good idea for attorneys to keep a USB drive available to quickly store and back up documents, but this really isn't a reliable backup solution (by the way, Dennis, my 1GB USB drive will hold 64,782 Word pages or over 100,000 e-mail messages). I'm curious, though, about Evan's comment that even with back-up data, the IBM clients still weren't able to resume operations - if the backup isn't enough, what's the point?
(DK): Next, add to our equation the flooding and possible unavailability of the court system, other government records and document files of all types. How do you prove even simple matters when the filing systems and paper records that house that proof are gone, unavailable for long periods of time, or prohibitively expensive to recover? It raises interesting questions. Will law firms involved in electronic discovery and electronic filing prove to play a key role in restoring the legal infrastructure? Will law firms who have conducted electronic discovery have an enormous advantage over law firms that have not? How will clients react when they find that the paper records they entrusted to their law firms were not protected and are not salvageable? It'll be a mess, in more ways than one.
(ES): Even the most electronically-modern courthouses were affected by Katrina. PACER put out a post-Katrina notice that its information systems were affected in courts all across the Gulf coast, including Florida. In some places, the CM/ECF system was down entirely. In others, PACER said court information might not be current. On the other hand, I haven't heard any stories about electronic data being lost entirely. The entire Vioxx MDL, for example, was moved from New Orleans to Houston following the storm, and was even able to maintain all of its existing deadlines.
(TM): The hurricane took out entire web sites, too. The week of the storm, I attempted to access the Eastern District of Texas web site, but couldn't - it turns out the site is hosted on computers based in New Orleans. Dennis, you raise some good questions - I suspect firms that maintain digital copies of their files will be in a better position to help restore any paper files lost by the courts, but any firm with offices above ground level may also have paper files available as well. As far as the courts are concerned, disasters like this underscore the inevitable move to electronic filing of case documents. We probably don't have the room here to discuss the possible ethical implications of not taking proper steps to maintain a client's files.
(DK): Of course, electronic files are not a panacea. Digital media can be lost or destroyed. They may become inaccessible. Electronic storage companies may go out of business. Having a great service level agreement is a good thing, but actually getting your data back is a better thing.
(ES): That brings me back to the importance of having a detailed disaster plan in place before disaster strikes. I'm definitely not an expert, but from what I've read, it was the firms that took the time to plan for the worst that were best able to maintain order after the storm. On the other hand, simply having a disaster plan isn't enough. It needs to be tested too. According to an AT&T survey, as many as seventeen percent of companies don't test their disaster plans once they're in place.
(TM): There's no perfect solution - sure, electronic files are less likely to be destroyed by the elements, but they aren't completely safe either. The best you can do is to have a solid disaster recovery plan in effect, test it, and make sure it is properly implemented.
(DK): The stories I've heard about the devastation of the legal system in the Gulf coast region are astonishing. We may be rebuilding the system from the ground up. What will this mean? I doubt that it will mean the re-creation of index card files, deed books and the like. Similarly, individuals and companies will be taking a much harder look at digital storage of information. The pressure to move toward electronic discovery will be accelerating.
(ES): The firms with a solid digital infrastructure in place before Katrina will probably be the first out of the gate after Katrina. That's a strong incentive to think digital for any firm having to rebuild from the ground up. Index card files and deed books? Those things belong in museums, along with the Rolodex.
(TM): Let’s not forget the library. I can imagine many firms that lost their libraries to the hurricane may elect to move to an electronic research system – it will be a lot easier, and in some cases less expensive, than replacing hundreds and hundreds of books. Firms that have previously maintained paper-based systems will no doubt find themselves facing a brave new world of digital recordkeeping. I’m not sure that more people will be moving to electronic discovery as a result of Katrina, but I think it’s safe to say that one reaction to this disaster will be a move towards a more automated law practice.
(DK): I expect to see a greater willingness of law firms to consider the "application service provider (ASP)" or "hosted services" approach to handling information. In this model, data is accessed over the Internet and it is stored by a third party in a secure, highly-protected facility. This model makes a lot of sense in a disaster scenario. Lawyers have historically resisted the ASP approach, so it will be interesting to see if their receptivity to this model begins to change.
(ES): If lawyers have resisted the ASP approach, it might because they become nervous about turning over data to a third party. But the possibility of disasters like Katrina provides a strong incentive to law firms to think creatively in ways they haven't before.
(TM): In an age where hackers can access the personal data of hundreds of thousands of people, is it any wonder that lawyers are leery when hearing the words "secure, highly-protected facility"? I agree that Katrina will force lawyers to think of different ways to protect and back up their data, but lawyer resistance to ASPs will continue until a measure of trust can be gained.
(DK): We are very early in what will be a very messy process. There are many forces driving the adoption of electronic discovery and it now seems likely that the recent hurricane may give us even more impetus. However, lawyers will face practical problems, not theoretical issues. Was paper a safe choice? Is it still? How will electronic discovery work in a disaster? While it's better to do what we can to help people who have suffered from this disaster, it will also serve as a focal point for rethinking why, when and how to be involved in electronic discovery and whether current models for discovery in general need some changes as well.
(TM): Okay, I'll say what's been bugging me through this whole roundtable: how is electronic discovery relevant to the issue of Katrina and disaster recovery? Will the hurricane force companies to think more about moving to digital documents? Yes. Will that, in the years to come, result in more electronic discovery from those companies involved in future litigation? Probably. But does the hurricane make me want to rethink our current models of discovery and factoring electronic discovery into that mix? Not really. There, I said it.
(ES): Dennis, you opened the column talking about the human scope of the Katrina tragedy. That's something that can't and won't be forgotten. It will be interesting to see, however, whether the disaster also serves as an impetus for changing the way lawyers think about storing and safeguarding information. Or will Katrina come to be remembered as an isolated incident, something that won't be repeated, the hurricane-equivalent of the 500-year-flood?
To Be Continued ...
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