Last week saw the release of the 2,200-page report by Anton Valukas on the Lehman Brothers collapse.  Valukas was appointed examiner by the U.S. Bankruptcy Trustee probing the reasons for Lehman’s failure in September 2008.

Note: Examiners in bankruptcy cases are appointed to investigate accusations of wrongdoing or misconduct. Their job is to determine whether creditors can recover more money in these cases, and their findings often serve as guides for more lawsuits and even regulatory action.  Mr Valukas is a Jenner and Block lawyer who specializes in criminal law and business litigation.

The report took one year and cost $38 million and it paints a damning portrait of the role of Wall Street and London’s financial center and the off balance-sheet trades used to mask Lehman’s true financial condition.

The report is nine volumes and 2,200 pages but downloaded quite quickly to our iPad.  We are spending most of weekend reading it.

Repo 105

There is extensive media coverage of the report so we won’t labor through all the details, and as we have previously reported there are a large number of civil lawsuits and government investigations underway, all  employing a boatload of contract attorneys, accountants and forensics specialists.  Preparation of the report required 70+ contract attorneys.

But in summary, the big item is the revelation of a particularly aggressive accounting practice, known internally as “Repo 105” that Valukas said helped the investment bank mask the true depths of its financial woes.   Over hundreds of pages (all in Volume 3 by the way),  Valukas details the genesis of and the process behind Repo 105.  

Based on standard repurchase agreements (repo) — short-term loans commonly used by many firms for daily financing needs, in which borrowers temporarily exchange assets in return for cash up front — Lehman took a particularly aggressive accounting approach to these transactions.    The controversy stems from whether the agreements can be booked as a sale, or whether they should be treated as asset financings.  Lehman used repos to temporarily park assets off its books to make its end-of-quarter debt levels look better than they did — while calling them sales instead of loans.   So they temporarily removed securities inventory from the balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008.

Repo transactions that Lehman (and other investment banks) use are normal to secure short‐term financing.  But with a critical difference: Lehman accounted for Repo 105 transactions as “sales” as opposed to financing transactions based upon the overcollateralization or higher than normal haircut in a Repo 105 transaction. By recharacterizing the Repo 105 transaction as a “sale,” Lehman removed the inventory from its balance sheet.  So they reduced its publicly reported net leverage and balance sheet.  Lehman’s periodic reports did not disclose the cash borrowing from the Repo 105 transaction – i.e., although Lehman had in effect borrowed tens of billions of dollars in these transactions, Lehman did not disclose the known obligation to repay the debt.   Lehman used the cash from the Repo 105 transaction to pay down other liabilities, thereby reducing both the total liabilities and the total assets reported on its balance sheet and lowering its leverage ratios.   Lehman never publicly disclosed its use of Repo 105 transactions, or its accounting treatment for these transactions. 

You can see why Repo 105 would be a tempting thing in the midst of a brewing financial crisis.  Leverage had become a focus of the ratings agencies and was widely thought to be an indicator of bank risk, which meant Lehman would have been hell-bent on reducing its leverage — at least publicly.  At the same time prices for things like CMBS and subprime loans were falling and/or illiquid – Lehman could not have reduced its balance sheet simply by selling things off without incurring large losses.  Hence the repo, which the bank increasingly used between 2007 and 2008 — even breaching its own internal cap on the repo’s use (about $22bn as of summer 2006). 

But there was a catch …

One catch.  According to Valukas, no American law firm would sign off on its use.  Enter Linklaters (a highly respected British law firm) who gives Lehman the answer it wanted: so long as the repos were conducted in London through the bank’s European arm, and so long as the company took other cosmetic steps to make these transactions appear to be sales instead of financings, Linklaters determined that they would pass regulatory muster.

Linklaters reply to the report findings:  the firm was not contacted by Valukas and its legal opinions were not criticized in the examiner’s report as wrong or improper.

Valukas deems Richard Fuld (Lehman chairman and chief executive officer) “at least grossly negligent” in his role overseeing Lehman.  Fuld’s lawyer said my client “did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of their accounting treatment.”   Although elsewhere in the report there is discussion of  emails Fuld received with documents concerning the transactions,  Fuld’s attorney came up with what will be the #1 excuse for all CEOs going forward:  Fuld “did not use a computer” and “he cannot open attachments on his BlackBerry”. 

Note:  for an excellent treatment of why Lehman’s use of the accounting rule can’t be explained away as a legal technicalitybut goes to the heart of the legal culture in the UK see this post from the IFLR Bulletin by clicking here.

The e-discovery elements

But the most intriguing part of the report we have read concerns the sheer size of the data  and the search methodology/software  used in examining the documents.  Valukus’s report was a mammoth task involving e-mails, reports, data sets and interviews.  Answering the questions required an extensive investigation and review of Lehman’s operating, trading, valuation, financial, accounting and other data systems.  Interrogating those systems proved particularly challenging, first because the vast majority of the systems had been transferred and were under the control of Barclays (who took over a large part of Lehman operating units);  by the time of the Valukas’ appointment, Barclays had integrated its own proprietary and confidential data into some of the systems, so Barclays had legitimate concerns about granting access to those systems.

The second challenge was more daunting. At the time of its bankruptcy filing, Lehman maintained a patchwork of over 2,600 software systems and applications.  It was decided early on that it would not be cost effective to undertake the enormous effort and expense that would be required to learn and access each of these 2,600 systems. Rather, Valukas directed his financial advisors to identify and acquire an in‐depth understanding of the most promising of the systems.

How the review was conducted:

1. The available universe of Lehman e‐mail and other electronically stored documents is estimated at three petabytes of data — roughly the equivalent of 350 billion pages.  For perspective, a petabyte represents one quadrillion bytes, and is three orders of magnitude larger than a terabyte.  The entire text content of the Library of Congress has been estimated at 20 terabytes.  So Lehman’s archives were 150 times larger than one of the largest libraries in the world.
2. Valukus carefully selected a group of document custodians and search terms designed to cull out the most promising subset of Lehman electronic materials for review. In addition, Valukus requested and received hard copy documents from Lehman and both electronic and hard copy documents from numerous third parties and government agencies.
3. In total, the Examiner collected in excess of five million documents, estimated to comprise more than 40,000,000 pages. All of these documents have been converted to electronic form and are maintained on two computerized databases, Stratify and CaseLogistix.
4. Documents were reviewed on at least two levels. First level review was conducted by lawyers trained to identify documents of possible interest and to code the substantive areas to which the documents pertained; those so identified were subjected to further and more careful review by lawyers or financial advisors especially immersed in the earmarked subjects. In order to reduce the cost of review, the Valukus sought and obtained the court’s approval to retain contract attorneys.  A group of more than 70 contract attorneys, supplemented by Jenner & Block attorneys, conducted first level reviews.
5. All second level (and beyond) reviews were performed by Jenner & Block attorneys or Duff & Phelps professionals.  Valukus estimates that he has reviewed approximately 34,000,000 pages of documents in the course of his investigation.
6. The entire body of e-mail in the Stratify database —  4,439,924 documents, approximately 26 million pages— has been reviewed.   Approximately 340,000 of the CaseLogistix documents — roughly eight million pages — have been reviewed.
7. Although a large number of the CaseLogistix documents were not reviewed, that database is fully searchable, and Valukus is reasonably confident that the repeated and focused searches applied against that database have discovered most if not all of the most relevant documents.
8. In most cases, documents were produced to Valukus under stipulated protective orders, which are described in Appendix 5 of the report. Subject to those orders, the document databases created remain a resource for the bankruptcy estate and the parties. The database includes computerized tagging which will allow persons interested in making their own searches to narrow and focus search requests.

Note:  details of the expenses including the cost of contract attorneys and search costs are detailed in the bankruptcy fee filings which will we include in further updates to this post.  It will interesting to analyze what cost savings might have been possible had Valukas used such methodologies as Recommind’s predictive coding (click here and click here), or perhaps used Index Engines full content/metadata indexing platforms (click here and click here) to access each of Lehman’s 2,600 software systems. 

Valukas smoothes way to legal action

The Valukas report has armed the regulators and the plaintiff bar with vital information.  And we still haven’t seen the separate SEC report due out shortly.   But there is little doubt his report will make it easier and cheaper for others to build their cases.  The SEC  and DOJ investigators have already indicated the Valukas’ work will speed up the completion of their own report.    They can analyse what the evidence shows or proves rather than cope with the burden of simply collecting the evidence — often the hardest task in a case of this size.   This will help them to make a concrete determination whether there were false and misleading statements about Lehman’s financial condition and whether or who they should charge, either on a civil or criminal basis.

The report may also help determine whether the Lehman bankruptcy estate can sue individuals to recover some of the firm’s losses on behalf of its creditors. Litigation specialists suggested that the report might embolden the trustee for Lehman’s estate to sue professional firms in an attempt to recoup losses suffered by creditors.  Posse List members will recall that after the 2005 collapse of Refco, an examiner’s report helped prompt lawsuits against a number of the defunct commodities broker’s legal and accounting advisers, as well as against individuals in the company.

One interesting note:  Valukas met the SEC and the two US attorney offices (New York and New Jersey) investigating the case to establish protocols for clearing proposed interviews so as not to interfere with any ongoing investigations.   

Still to come …

The report makes fascinating reading on many levels.   We are continuing our read.  We will amend this post as more information is obtained especially anything we find regarding the e-discovery aspects.

Reported by:  Gregory P. Bufithis   Founder/Chairman  The Posse List

Tim Williams is Chief Executive Officer and co-founder of Index Engines.  He founded CrosStor Software, and served as its Chairman and Chief Executive Officer. CrosStor was a pioneer in enterprise-class purpose-built NAS operating systems and SAN/NAS convergence, with over 24 OEM customer including EMC, IBM, and HP.  CrosStor was sold to EMC in November 2000. After the acquisition, Tim served for a time as EMC’s VP of storage operating systems for their mid-range division.

In 2001, Tim led a group of angel investors to restart Tacit Networks (sold to Packeteer in 2006). He refocused their technology, reinvented their business model, attracted new institutional investors, rebuilt the management team and served as Interim CEO until a permanent CEO was found.

Prior to founding CrosStor, Tim served as a consultant for a variety of computer and telecommunications companies. He participated in the development of the UNIX operating system at Bell Laboratories, and has held a number of key engineering positions at high-growth and startup computer companies. Tim has a Masters of Computer Science from New York University’s Courant Institute.   Index Engine’s flagship product, Unified Discovery Platform, won the Gold LTN Award for Best New Product in 2009.

We caught up with Tim at the Masters Conference and in the offices of Index Engines.

TPL:   First of all, congratulations on the Gold LTN Award.

TW:    Thank you. We are very proud of that.  Our Unified Discovery Platform was also recognized for its litigation support and records management capabilities.  We are particularly proud, because the selection process for these awards is based on the publication’s more than 40,000 subscribers voting for technology that represented outstanding achievement in legal technology.

TPL:   Ok, we’ll let you plug the product now.

TW:    [laughing] Thanks.  In short (you can get more from our website) by enabling  a unified, quick, easy and streamlined access to enterprise data, regardless of where it is stored or in what format it is stored, our product makes both e-discovery and records management processes more efficient and cost-effective. As IT and legal teams work together more, solutions that solve problems for both departments, like the Unified Discovery Platform, will continue to be in great demand.

TPL:   You have a direct link we can give folks for more information?

TW:    Sure.  For an overview go here.

TPL:   Actually, you folks take what we’ll call a “fresh” approach.

TW:    We agree. Our product was designed from the ground up for the needs of the modern, data-inundated enterprise. It’s the only solution on the market to offer a complete view of all electronic data assets – not just online data, but offline backup data as well. That’s unique to us – a single system with a unified process and audit trail.  Keep in mind that online data is indexed, de-duped, and de-nisted in-stream in it’s native storage format at wire speeds of up to one terabyte per hour, and similarly, offline data can be processed in it’s native backup formats directly from the backup tape as fast as the tape can be read eliminating any need for a time-consuming restoration process.

TPL:   So it’s comprehensive?

TW:    Absolutely. We provide the only comprehensive discovery platform across both online and offline data, saving time and money when managing enterprise information for discovery of ESI in the enterprise.        

TPL:   And all this only since 2003, when you started?

TW:    Correct.  Our mission was — and still is — to organize enterprise data assets, making them immediately accessible, searchable and easy to manage.  Enterprise data is growing at 100% per year. Historically, most of that has been offline data. Keeping all of that data organized is a significant challenge. Businesses require timely and cost efficient access to all that data, and at the same time, must maintain compliance to regulations governing it.

Talk to any global enterprise and they will tell you that the total data they have data under management is far greater than the total data available on the Internet. That implies that if they used Internet-class technology to manage it, they would need to build internet-class data centers in the process. That’s not practical. If the goal is to get a handle on all that data, to organize it and make it accessible, a fundamentally different process, a “fresh approach” as you say, was clearly necessary.

TPL:   Ok, bingo.  You have hit on the purpose of this series of interviews. The “tsunami of data” as Ralph Losey says.  A volume of data (and cost of discovery) which seems to be exponentially greater by the minute.  In a nutshell, how do you help clients cope, get organized?

TW:    At a conceptual level, we haven’t done anything unique – we built a rich, searchable index of all the data – we are just doing it far faster (at 1 Terabyte per Hour per engine), far more scalable (up to 1 Billion files and emails per engine) and in place, directly in the native storage format, without copying or preprocessing.

Given that class of power, enterprise-wide search, classification and data management suddenly becomes practical. Our customers can finally see everything they have, and then make the decisions on what to keep and how to store it. They can survive that data tsunami, and scale cost effectively, process it quickly, and manage it efficiently, and most importantly, know what they have, what are the real assets and liabilities contained in their enterprise data. As we like to say, we sell “Power Over Information”.

TPL:   So, we now have a new lexicon, funky technology — and not necessarily technologically astute lawyers.  Are most lawyers technophobic or perhaps they don’t see technology like those of us in the industry?

TW:    Actually, these days, most of the general counsel and law firms we deal with are more technical than they get credit for. I don’t believe they are afraid of technology as much as they are afraid of the unknown. It’s understandable. How can you manage risk on behalf of your company or client if you can’t size it quickly and accurately? So in the past their jobs have largely been focused on avoiding data discovery, as it was too difficult and costly, and generally too hard to control. Index Engines changes that. 

TPL:   So it’s really a lack of knowledge, a lack of familiarity?  How do you help?

TW: Getting the word out that things have changed, that the traditional “burden argument” around discovery of ESI is no longer going to fly, and in fact isn’t even defensible any more – that’s a full time job for us. But as Index Engines gains more and more market awareness, through things like the LTN awards, the legal community will begin realize that the burden argument no longer holds water – it’s now affordable and practical. We’ve transitioned a process that once required specialized skills, significant infrastructure, and many may man hours into an automated process taking only a fraction of the time and requiring only our appliance.

It still amazes us how often online sources of data are used for eDiscovery instead of offline sources. This makes no sense. Online sources rarely have forensic integrity. How easy is it to modify or delete an email stored on a company server?  Litigation hold is often happening way too late – like closing the bard door after the horse is long gone.

Compare that to the point in time forensic copy of the same email stored on a backup tape. This turns the concept of litigation hold on its head. It’s no longer explicitly necessary, because it’s being done every night as a routine byproduct of the company’s existing disaster recovery processes.

TPL:   And your technology works no matter what — potential litigation, government investigation, and internal investigation, whatever? 

TW: That’s right. What’s more, our technology also makes tape remediation feasible. You can typically pay for it for less than a year of the cost of storing that data for a year with a third party provider.

TPL:   And what do you think is at the forefront of the discovery process, the most important thing, the biggest challenge?

TW:    Its obsolescence. The word discovery presupposes an initial state of ignorance, and that is what nurtures all the fear of the unknown. The challenge must be to remove the need of going through a long internal discovery process in the first place. If you have a solid knowledge management system in place, then you don’t have to discover, you already know. Know if you are in compliance or not, know which employees are increasing your corporate liability, know if your cases are worth settling or should be fought. Know all these things immediately as a matter of standard management practice.

If you don’t know, if you don’t believe knowing is possible or practical, you stay forever in a reactive mode, live your corporate life in a state of denial, forever putting off the inevitable, at an enormous cost in time, money, wasted resources and lost opportunities. The costs of ignorance are enormous.

Let me put it this way:  knowing requires really getting complete power over your data – if you don’t have power over it, it has power over you. I cannot emphasize that enough. To know, you need to integrate data knowledge management deeply into your organization proactively. And key to all that is a comprehensive indexing strategy, one tightly integrated into the company’s backup and storage management policies.

TPL:   There is a feeling among in-house counsel (gleaned from the ACC meetings we attended) that a direct relationship with e-discovery vendors is best, rather than through outside counsel.  Do your law firm clients perceive this as a threat to their business?

TW: I guess it depends on the relationship. Many law firms we know operate as an extension to the enterprise in-house counsel, and their expert opinion is valued. We have a significant internal investment in programs to educate outside counsels about our product and find that they are very receptive to learning about ways to create more value for their clients, especially in tough economic times like these.

TPL:   E-discovery vendors have also had much success the last 2 years moving into the e-discovery space across the whole EDRM model, especially in the area of document review (the “right side”) and that success is due to the continuing move by corporations to move EDD directly in-house.  Document review is a nice piece of change.  Is this a move you contemplate?

TW:    We are focused on solving the problems on the left side of the EDRM model – identification collection, culling – which all have to do with speed, scale and complexity of data.  Our value comes into play when large amounts of data need to be identified, searched, collected, and culled down either for litigation review or for knowledge management projects.

TPL:   Ok, news flash.  There is a myriad of software out there — review software, early case assessment software, ESI management software, etc.  How do you distinguish Index Engines from the pack?

TW:    We feed them. We agree, there are a lot of good review tools out there, and for the most part, our customers have already chosen their favorites. However, none of these tools can access data at the speeds we can and over the various data formats and container that we do. Our speed and scalability are unique and set us apart from the pack. We take that mountain of data and turn it back into a manageable molehill.

TPL:   E-discovery costs are skyrocketing.  Yet much of EDD is now a commodity – and that has changed the structure of the market.  Prices are — shall we say — more predictable and probably more realistic.  E-discovery vendors have capped fees, set flat fees or worked with various forms of pricing estimators.  Have you changed your pricing?

TW:    The challenge in 2010 for everybody — vendors, law firms, etc. — is going to be to stay flexible, stay focused on the needs of the customer, know what value they require, how much capacity they need and charge them only for that value and no more.

This hasn’t required that we change our pricing, but rather that we broaden our pricing and licensing options, and in fact, we’ve invested considerably in that throughout this past year.   Our product can be purchased outright by end users based upon the amount of indexing, search and ingestion capacity needed by the customer. We find that when measured against other products at similar capacities, we are always the price leader.

In addition, it can be purchased with term licenses, and with capacity metering licenses. There are a dozen different combinations of capacity metering in the current release.

Finally, we have a large network of partners that offer our product as part of a larger eDiscovery service offering. It’s not unusual for companies to start working with one of those partners and latter decide on a more proactive approach and bring the technology in house.

TPL:   The big “new new” thing all of last year — at every event we covered — was early case assessment and winnowing relevant data down to reduce the number of documents to review.  As the stats bear out, it is the most expensive part of the process.  But now we have predictive coding, plus the work being done in computer assisted review as evidenced by Patrick Oot and Anne Kershaw’s study “Document Categorization in Legal Electronic Discovery: Computer Classification vs. Manual Review “, plus the work being done by Google and Microsoft on auto-categorization and auto-coding.  Is the technology getting to the point where we can also winnow out the eyeballs — contract attorney reviewers?

TW:    What’s important is that companies cull down data as early as possible. Ideally, they should cull before any collection is done. That’s another unique capability of our product. Since we can index data very rapidly and in place without first copying it, it allows you to do your first cull prior to collection. That can be an enormous savings.

The technologies that you mention are also promising, particularly during the later review stages of the process, but ideally, the goal should be moving as little data into to those late stages as possible.

TPL:   You recently announced that Index Engines had joined the EMC Velocity2 Technology and ISV Program. In addition, you were jointly conducting test results of indexing performance and capabilities on EMC® Data Domain® deduplication storage systems.  Your press release said “that the Index Engines 3.0 platform is able to perform full content and metadata indexing of backup data stored on EMC Data Domain systems, enabling users to avoid time consuming restores prior to the indexing process. During recent tests conducted by Index Engines with support from EMC, a single indexing engine of the Index Engines 3.0 platform achieved sustained rates of over 1 Terabyte per hour on a Data Domain DD690 storage system”.  For the non-techies (like me) in our audience, work us through that.

TW:     Well, that is part of an on-going program to qualify popular storage vendors at our 1 Terabyte per Hour per Engine indexing speed. You may have noticed that we recently announced the EMC Celerra NAS platform as well. Others are in the works.

What’s interesting about those two announcements is what’s different about them. Data Domain systems store data in backup format – same format as that used on backup tapes. Celerra systems store data in file system formats. What’s unique about us is that one of our Engines can process both in excess of t the 1 Terabyte per Hour speed. No one else can do that.

In the first case in particular, the format of backup data, by design, is optimized for restores versus the indexing process that accompanies eDiscovery efforts. For all the reasons I stated above, backup data, as the most forensically sound copy of data, will inevitably become more important in the eDiscovery process.  Other processes a full restoration of backup data to prior to indexing — an arduous, multi-step process that requires a large cache of disk, and usually a recreation of the backup and email environment.  With the Index Engines platform, indexing systems like EMC’s Data Domain deduplication storage systems, backup data can be indexed directly at high speed without having to restore multiple versions of backups to disk.  And since the backup data is online, we can index as fast as the network allows – we are not bottlenecked on tape technology. Instead of restoration, a comparably small index (roughly 5% of the data) is created that users can use to query the data, cull it and then choose what to extract. 

The combined solution is unique in its capability to enable customers to index de-duplicated backup data and enables a markedly more efficient approach to the eDiscovery process. What’s more we can even allow you to search for individual files and emails on the Data Domain system stored in backup format, and move those individual files and emails to the Celerra NAS file system. Think of it – an email stored inside an Exchange or Notes database, on a compressed, multiplexed backup can be found and individually moved without restoring the rest of the tape, or even the rest of the database. That’s what we mean by “Unified”. We’ve eliminated the brick wall that previously existed between backup formats typically used for offline data and file system formats, typically used of online data. That’s really game changing.

Helpful?

TPL:   Yes, very. And I actually understood it.        But how do you do it? What is the secret sauce?

TW:  As you can see by my background and the background of our co-founder, Gordon Harris, and other early employees, we are really storage guys, not eDiscovery guys. The key to the “fresh” approach we took was to see that the bottlenecks in all other indexing products were storage related, or more specifically, were I/O related.

TPL:   Hold on.  I/O related?

TW:    Sorry.  That’s an abbreviation of Input / Output and refers to the transfer of data to or from an application.   The key to fixing this was to take control of I/O and eliminate any inefficiencies.

So unlike traditional project-based indexing products, Index Engines started by creating  purpose-built indexing operating system that was designed from the ground up to meet the demands of indexing for the enterprise.  By approaching the problem at that level, we were able to achieve enormous improvements in speed and scalability. Most importantly, we eliminated the need to make a copy of the data prior to indexing, or the need to access it randomly, and we created a system that could index data serially in one pass, regardless of the complexity of that data’s format. That’s the secret to our ability to index backup formats as well as file system formats.

TPL:   Tim, we greatly appreciate your time.

TW:    Thanks. I enjoyed the conversation.  We’ll see you at LegalTech.          

Postscript:  LegalTech is one of the premier events in the industry.  It will be February 1, 2 and 3 in NYC (for details click here) and you can find Index Engines in the Exhibit Hall at Booth #2119. 

For all interviews in this series click here. 

In the latter part of the last decade — ok, the fall of 2009 — we completed what we call the trifecta:  full coverage of three of the premier electronically stored information (ESI) and e-discovery events for the litigation industry:  The Masters Conference (click here), the ACC Annual Meeting (click here), and the Georgetown Law Advanced E-Discovery Institute (click here).

As expressed at all of these events we are in “the perfect storm”: ever increasing data volumes; more litigation and government inquiries, and skyrocketing e-discovery costs. 

And if we learned only one thing about the explosion of ESI and corporate data it was this: Craig Ball, Jason R. Baron and Ralph Losey can scare the bejesus out of you.  These guys think in terms of exabytes … and beyond.  Although Jason and Ralph try to make it more palatable by doing it to the tune of Darude’s Sandstorm (click here).   And Craig Ball did assuage our concerns (a bit) by telling us that while we live in an infinite universe it is all manageable.

At all of these ESI events it was stressed — stress being the operative word — that in-house legal departments have been forced to cut their budgets just like their “sisters”, the law firms but with a greatly increased workload.  And the end of 2009 and the beginning of this year saw survey after survey tell us/show us that ESI and e-discovery requests would simply skyrocket.  As one of many examples, see the Enterprise Strategy Group study (click here).

So companies are looking to innovate their way out of the recession, strategically cutting costs, bringing services and processes in-house to gain more control, and doing more than just “quickly brandishing an umbrella looking for a place to seek shelter” quoting the  Enterprise Strategy study.

But as one memorable GC told us at the ACC Annual Meeting in Boston last year “the reality is we need to get control of our ESI — our data data data which seems to be everywhere!! — at the very beginning of our process.  Not just at litigation time”. 

A nightmare.  Or two … or three …. for general counsels everywhere.

And while it is impossible for a general counsel to isolate the effects of software from all the other efforts presumably made to rein in outside counsel and other spends, corporate law departments can control spending via technology.  And there are vendors and technology galore as ESI management, e-discovery, governance, compliance and risk are all melding into one pot.  And those great folks at Gartner have provided us with a nice summary of the e-discovery vendor landscape as we begin 2010 (click here).

So as LegalTech New York comes quickly upon us (click here) we are launching a new series whereby we will post detailed interviews we conducted over the last several months with the thought leaders in ESI management and e-discovery, with links to articles, blog posts and websites, focusing on ESI management and e-discovery for the corporate law department, and the law firm. The series will run up to and through LegalTech, and beyond. We have some 30+ interviews in the queue which will include:  Dean Larry Center, Bob Eisenberg and Nicole Steckman of Georgetown Law CLE; Tess Blair of Morgan Lewis; Jim Moore of Merrill Corporation; Ron Friedmann of Integreon; Deborah Baron of Autonomy; Tim Williams of Index Engines; Steve d’Alencon of CaseCentral; Nigel Murray of Trilantic; Virginia Henschel and Rob Robinson of Applied Discovery; Mary Mack of Fios; Adam Cohen of FTI Technology; Chris Dale of the eDisclosure Project, plus many, many more.

Our intent is to provide a background in finding potential cures for the ESI/data management nightmare as seen through the eyes of the major players in ESI management and e-discovery:  what technology is out there, who is out there, how do you sort through all the technology, procedures, best practices, etc.  Most of these folks will be presenting and/or exhibiting at LegalTech in a few weeks so we’ll also tell you where you can find them at the show. 

And a bit later in this series we will have interviews with Jason R. Baron, Ralph Losey and Craig Ball who will put all this tsunami of “data! data! data!” in perspective for us.

But we start off this series with some interviews with some extraordinary companies that have recently come onto the ESI/e-discovery scene.  First up:  an interview with Andy Wilson, co-founder of Logik.  For our full interview with Andy click here.

For all interviews and posts in this series click here.