Troy Dunham

As most of us know by now, several changes to the Federal Rules of Civil Procedure impacting the discovery process took effect in December 2015. While much has been written elsewhere about these amendments, the 2006 changes received much wider coverage. I believe this is largely due to the nature of the 2015 changes as understated, with some amendments simply aimed at bringing the FRCP into line with common practice.

The Rules Committee undertook, in the revisions to Rules 26 and 37, to clarify the murky area of proportionality in discovery. Proportionality in this context is very often misunderstood, even by seasoned practitioners. Worse still, since it necessarily relies on an evaluation of reasonableness, often involving technical considerations and their associated costs, an understanding of the legal concept of proportionality under the FRCP isn’t enough. The Committee makes note that the amendments do not substantively change the proportionality analysis, but the revisions highlight the current focus on collaboration. The changes also attempt to clarify how and when proportionality should be considered in the context of both preservation and discovery.

Rule 26 – There have always broadly been two aspects to proportionality in discovery. I used to refer to these as “vertical” and “horizontal” proportionality for brevity. The former referred the burden (usually economic) of discovery on a party relative to the amount in controversy or the importance of the issues in the litigation. The latter referred to the burden of discovery on the parties, relative to each other. The revisions to Rule 26(b)(1) bring these two types of proportionality front and center. I recall that for years after the 2006 amendments took effect, clients argued that a court should impose cost-shifting because of extreme “information asymmetry”, a.k.a., lack of horizontal proportionality. I do have a fear that by (re)placing proportionality prominently in rule 26 as it has, the Committee has encouraged that same line of reasoning in a whole new generation of practitioners. The Committee tries to forestall this argument by noting, “the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Finally, the Committee notes reiterates an earlier iteration stating, “[t]he rule contemplates greater judicial involvement in the discovery process…” I find this last statement concerning because, in my experience, judges have shown a keen disinterest in discovery disputes.

Rule 37 – To refresh your memory, rule 37 deals mostly with failures in discovery and what to do about them. E.g., failure to preserve after a duty attaches. The changes to rule 37 will receive their own blog entry soon, but I find it fascinating how the concept of horizontal proportionality snuck its way into this revision. Neither the rule, nor its amendments mention proportionality. However, the Committee note states, “Another factor in evaluating the reasonableness of preservation efforts is proportionality” and that courts, “should be sensitive to party resources.” It gives an example of a party to a litigation utilizing a less costly method of preservation provided that it is substantially as effective as more costly methods. In other words, if a party skimps on its preservation efforts due to lack of resources, it may still be reasonable under a horizontal proportionality analysis.

More on the changes to rule 37 et seq. later. -td

When I wrapped-up the last post, I summarized some of the challenges to getting the @Microsoft Office 365 Advanced eDiscovery suite setup in your O365 account. Although once setup, use of the tools is similarly arcane. But with that said, the tools do work. As it was explained to me, part of the reason that the setup and operation is so byzantine is because of the different teams that created and operate the different facets of Office 365. For example, it is no surprise to anyone reading this post that the Equivio module was added to the tail-end of the Advanced eDiscovery Suite. Thus, the interfaces between the modules is where the complexity arises. I have no doubt that Microsoft is already working very hard to ease the handoffs between modules.

Currently, the tools work by setting up an eDiscovery case, placing a hold on email and other documents or importing email and other documents into O365, searching those documents, and then performing an initial review in native form either using Equivio (if you have the Advanced eDiscovery tools) or using the Microsoft FAST search engine alone. The review is binary, meaning documents are tagged for inclusion in a larger, more complete review, or they are not. There is no review tool per se. That said, you have to believe that Microsoft is working hard to create – or acquire – a review tool. After documents are initially reviewed in native, the tagged documents can be exported in Concordance-compatible load file for more extensive search, review, and production.

So, should we be afraid? It has been said that a benevolent dictatorship is the highest and best form of governance. The problem with that theory lies in finding a truly benevolent dictator. It was Lord Acton who wrote (in 1877) that “Power tends to corrupt and absolute power corrupts absolutely.” World history is strewn with ostensibly benevolent dictators that power eventually corrupted. Today, even the word “dictator” carries a connotation of caprice and irreverence. I believe that this is at the root of why many members of the IT community harbor an almost visceral distrust of anything Microsoft. From what I’ve heard, it certainly holds true for Microsoft’s Advanced eDiscovery tools amongst many in the eDiscovery world. I didn’t attend RelFest last year, but I have heard stories about an informal audience poll indicating that Microsoft was the biggest threat to the eDiscovery industry as we know it. Now, that may or may not be true but it’s important to remember that, not so long ago, Kcura, Recommind, and even Equivio itself were the disruptors of the legal world. I remember a litigation partner at a former law firm employer telling me emphatically that “electronic discovery is ruining litigation.” It is interesting how quickly an industry can move from disruptor to disrupted. So I ask again: should we be afraid? I believe that it ultimately depends on your tolerance for change and your place in the eDiscovery industry. Microsoft’s foray will undoubtedly have an impact. How much and how quickly remains to be seen. At least initially, there will simply be less data to collect, process, host, and review. For vendors in those lines of business, I don’t think that fear is warranted just yet. But perhaps a bit of uneasiness is warranted…

Okay, the tongue-in-cheek title was meant to catch your attention and I’m sure we’ve all jokingly talked about “world domination” in business or eDiscovery, but rarely is it a realistic conversation. I once worked with an eDiscovery provider that had a weekly “world domination” meeting, which was high hopes for a company with less than 100 employees! Today I really mean to talk about World Domination and only a handful of companies on Earth can truly threaten World Domination. @Microsoft is one of those companies and it should come as no surprise that the company has finally turned its eye toward the eDiscovery industry. Microsoft is truly world-dominant with its Windows operating system and Office suite of products, not to mention data server infrastructure. With all of those products hitting a saturation point, Microsoft has introduced new business models and offerings to continue the growth, income, and indeed, world domination. When Microsoft purchased Equivio last year for a rumored $200M, it did so with an eye directly fixed upon extending the Office 365 service panoply and capturing eDiscovery dollars for customers already using the Office 365 cloud products. I have been fortunate enough to work extensively with Office 365 as an administrator and to attend several days’ of meetings at Microsoft headquarters in Redmond regarding Office 365 and Equivio integration. It’s pretty amazing, really, when you think about the previous cost of using Equivio, either as a provider or a consumer, versus the monthly cost of adding Equivio to your Office 365 subscription. There are a couple of ways of adding Equivio to Office 365: Equivio is included by upgrading to or purchasing the E5 level of Office 365 Enterprise at a retail price of $35 per user per month. It is also available by adding Advanced eDiscovery to any business-level Office 365 subscription for $8 per user per month. That means that you can have a full Office 365 suite of products including Advanced eDiscovery for as little as $13 per user per month, which works out to $156 per year. Most people spend more than that on coffee. Let’s be clear, the product is not perfect yet. There are still integration issues and enhancements to come but Microsoft didn’t become world-dominant by standing still and I’m sure that the enhancements will come over time. But looking at all that comes with the E5 suite, it is a tremendous value. Even the low cost option offers immense value. One the low end, users get online versions of the Office suite, unlimited Skype for Business online conferencing, Yammer enterprise, SharePoint, Exchange email with a 50GB inbox, 1TB of online storage, as well as some fun additional features like Power BI and Sway. The E5 suite brings all of that plus a lot more including things like conference lines, voicemail, cloud PBX, unlimited inbox storage, Active Directory, AND the Advanced eDiscovery tools. I will dive deeper into the Advanced eDiscovery tools in the next post.

l love quoting the Bard because it’s so easy. That wonderfully prolific writer and thinker gave us so many quotes that can be stretched to fit whatever argument or position we advocate. But I’m getting off topic and that is a topic better suited for another section of this blog…

But what is in a name? in this case it’s Office 365 “eDiscovery” versus “Advanced eDiscovery”. In this post, part two of a three-part series, I’ll take a look at the eDiscovery features of @Microsoft’s Office 365 and what bumping-up to Advanced eDiscovery adds to the mix.

To start, I’m not going to pretend that this is easy. Just because the tools are all consolidated inside of Office 365 and accessible in one place doesn’t somehow make the eDiscovery process – or Office 365 administration for that matter – any easier. The tools are scattered across the Office 365 admin portal(s) with some features available only within certain Microsoft “SKU’s” such as the aforementioned E5 suite which, in turn, rely on byzantine product names like “Exchange Online Plan 2” to designate the eDiscovery products available to you. Or you can add products piecemeal if you don’t need the whole E5 suite by including, for example, “Exchange Online Archiving (EOA) for Exchange Server (plan 92c0a)” and/or “Office 365 Advanced eDiscovery (plan ce71c)”. I’m not making this up. In fact, Microsoft understands the complexity (and I guess it’s an open question whether it is intentionally complex) such that it openly advocates a path for existing eDiscovery service providers to become Microsoft Partners offering Office 365 as resellers and eDiscovery process consultants. But again, I digress.

Let’s break it down this way: most eDiscovery nowadays is primarily concerned with email and then with everything else. This is true for a bunch of reasons including (but not limited to) document volumes, relevance, and data structure. Microsoft coincidentally follows the same data bifurcation by putting all of the Office 365 data in the same two buckets: Exchange Online (email) and SharePoint (everything else). All but two of the Office 365 for Business SKU’s include Exchange Online and it appears that all of the SKU’s include SharePoint. (As an aside, if you were particularly masochistic you could add “Exchange Online (Plan 2) (plan 8cd20)” as a separate add-on to the two Office 365 for Business SKU’s that don’t currently have it.) The reason that this is important is that in order to start using the eDiscovery tools in Office 365, one must: 1) create an eDiscovery Case in the Compliance Center in SharePoint and assign an administrator for that Case; 2) Designate the email accounts involved in that Case and add them to the in-place hold feature in Exchange Online. Thus, Microsoft follows the same “email and everything else” structure by similarly bifurcating the eDiscovery approach in Office 365. Then, if you have purchased the proper SKU, you can proceed to step 3) use Equivio to identify duplicates, near-duplicates, thread email, and predictively code documents within your eDiscovery Case. I should point out that some features related to steps one and two above, are only available with certain Office 365 SKUs but the overall process is the same. Is anyone else confused yet?