The No-Paper Trail

Boards should make sure that general counsel works smoothly with information technology executives, says Michael Walsh, president and chief executive officer of the legal markets division of LexisNexis, a division of Reed Elsevier. In the event of a legal action against the company, emails and documents should be easily accessed. Walsh spoke to Directorship about how boards can facilitate the process:

LexisNexis used to be known as a document search service, but you have morphed into something rather different, right?

We’re in the litigation services business. We’ll go in and work with corporations and law firms to identify document retention standards and policies. We conduct training programs and audits for them. When it comes to implementing those policies, we’ll help with some pieces of that. We’ll do electronic discovery, for example. If you need somebody to come in, gather up all your data, put in an electronic database and make it searchable, we offer that.

What exactly is electronic discovery?

Let’s say Company A sues Company B. Company B then has a very short period of time to produce potentially millions of documents that are relevant to the case. Historically, that process was done manually. In fact, when I came out of college I worked as a paralegal. There would be enormous rooms filled with documents. An assignment for someone like myself was, “Go through all these documents and find the ones that contain the word ‘fuel.’”

Now, all those documents are uploaded electronically. They’re either scanned in or they come on electronic media like hard drives or disks. We gather up all that data for a customer and upload it into databases. We then provide electronic tools that allow attorneys to quickly search through all the documents and categorize them into which ones you have to hand over to opposing counsel, which ones you can keep privileged, which ones are not relevant. It allows you to respond much faster. But more importantly, it allows you to quickly hone in on whether you have a smoking gun or not.

Are you seeing a lot of demand?

This business has just exploded. We acquired a business in 2003 called Applied Discovery, and they were a pioneer in this field. Now we’re expanding our range of services to make things more efficient. We’re taking the documents and we’re hosting them. They sit in repositories and databases. As companies get sued and re-sued, they need to tap into the same documents. We also integrate a lot of our applications and tools with these documents, so not only can lawyers identify one of them and pull it up, they can also see whether there is any legal authority that relates to one of those documents. They can house the documents in an evidentiary management database that they use to conduct their trial. We’re creating this interconnected web of information that is linking all the original-source research materials with company information.

Overall, do companies do a good job of keeping records for legal purposes?

We recently did a survey of corporate counsels and asked them, “Do you feel that you have good control over your document retention policies?” Only 50 percent of respondents signaled that they had a good comfort level. So this is an area of huge concern.

Are there common standards for what companies should retain and for how long?

The standards vary by industry. The rules, regulations and environments are different for Microsoft than for Goldman Sachs. They’re different in a regulated industry, because there are industry-related specific rules that tell you what you can do and cannot do with your documents. What we do is go in and help a company understand what its issues are and then help them formulate the right policies. How long do you have to keep your documents? How do you map out your IT systems to understand where your problem areas might be? What should your policies and procedures be in the event that you are sued?

How do best-practice companies manage their documents? Are CEOs and boards involved, or just counsels?

It’s got to be led by the corporate counsel. It starts with a very clear set of document retention policies, what you’re going to keep, where, and when you’re going to dispose of it. Getting the right practices in place isn’t something that happens in the general counsel’s office alone. It requires engagement and buy-in from the entire IT department. But that’s difficult. This is one of the top issues that keeps corporate counsel awake at night.