This then results in most businesses simply preserving everything -- or at the very least preserving a much larger universe of data than necessary -- in a risk-averse approach to preservation. While this may help stave off sanctions, the expense and the headaches really come about when a business needs to cull through the unsorted informational backlogs of hundreds of employees during the discovery process (the portion of a litigation where a party is required to search and review information).
While search technologies, such as predictive coding, have grown in sophistication by leaps and bounds to the point that it is often unnecessary to have eyes-on review of every document in the informational universe to locate relevant information, it is still very expensive to cull through information either during discovery or when trying to determine what information a business needs to preserve.
The solution to this problem is simple in theory but difficult to achieve in practice -- sort data on the front end to ensure that information can be easily sorted by custodian, date of creation and topic, and don't keep information beyond its useful shelf life. This is a smart thing to do from a business perspective as well as a legal perspective. Managing information well, and making business-critical information easily accessible to those who need it when they need it, is vital to the success of any business.
Unfortunately, there are not many folks who can efficiently design and actually implement a system like this. There is a dearth of information managers that have the skills and breadth of knowledge to help businesses manage their information adroitly -- hence programs like Columbia's Master of Science in Information and Knowledge Strategy, designed to fill this educational void.
Clever information managers are able to design information management structures wherein individual custodians presort what they store, get rid of what they do not need, and are able to access information that they need quickly and easily.
While these general principles of information management hold true on or off the cloud, any business using a cloud model needs to make sure that it still has the ability to quickly archive, copy and preserve electronically stored information (especially email) by custodian.
If a cloud service provider does not have a system in place to promptly corral, preserve and secure data in response to a litigation hold, the business using the provider will suffer the consequences.
Cloud legal benefits
Yet, by the very nature of the cloud, corralling cloud-based information can be much easier than gathering information from a bevy of individual custodians. If a cloud service provider has a system in place to easily copy and preserve information relevant to a litigation (either by custodian or department), then the business using the provider will reap the benefits.
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