One year later - forty-four percent of corporate counsel report companies being unprepared for onset of revised federal rules for e-discovery

November 29, 2007

LexisNexis Corporate Counsel Survey highlights challenges, lingering misperceptions in complying with Federal Rules of Civil Procedure (FRCP) since implementation a year ago

November 29, 2007 — New York, NY, November 29, 2007 - Forty-four percent of corporate counsel attorneys revealed their companies were not prepared when the revised Federal Rules of Civil Procedure (FRCP) for e-discovery came into effect in December 1, 2006, according to the recently conducted LexisNexis® Corporate Counsel Survey. Additionally, 20 percent of corporate counsel were unaware of whether or not their company was prepared for the amendments to the federal rules prior to implementation. The survey also suggests that some significant challenges and misconceptions about the rules are still prevalent, but that companies have made strides in 2007 to be better prepared.

The survey, conducted by LexisNexis during the Association of Corporate Counsel 2007 Annual Meeting in late October, also revealed the top challenges that corporate counsel have encountered in their attempts to comply with the new rules, and whether the revised rules have resulted in cost reductions or increased discovery workload. Results are being released to coincide with the first anniversary of the new rules on December 1, 2007.

This is the second year in a row that the LexisNexis Corporate Counsel Survey has been conducted – each time soliciting opinion about the new FRCP for e-discovery. It is part of the LexisNexis effort to continually monitor the legal market in order to provide a set of Total Practice Solutions capabilities addressing the complex and changing needs of legal professionals.

“Results of the LexisNexis Corporate Counsel Survey bring to light how unprepared corporate counsel attorneys felt they were when new amendments to the federal rules went into effect a year ago, and that challenges still exist,” said Courtney Barton, attorney and vice president of industry relations at LexisNexis® Applied Discovery®. “But, results also indicate that over the last year many corporate counsel have begun to take the fundamental steps necessary to ensure their companies are better prepared for discovery and litigation.”

Challenges with Compliance

Corporate counsel attorneys who responded to the LexisNexis Corporate Counsel Survey indicated that their biggest challenges in complying with the FRCP for electronically stored information typically involved internal systems and processes.

Top challenges reported include:

  • Communicating with IT departments (27 percent)
  • Finding budget to put systems and tools into place (25 percent)
  • Getting buy-in from upper management on the importance of litigation preparedness (21 percent)
  • Finding e-discovery staff with a good mix of IT and legal expertise (9 percent)

Misperceptions of the Rules

The survey also suggests that confusion still exists regarding certain elements of the new rules. For example, 70 percent of corporate counsel attorneys believe that the rules require them to produce documents in their “native file” format. This is an incorrect assumption, and it is up sharply (up 27 percent) from last year’s response to the same question.

Impact on Workload and Cost

While provisions of the new federal rules require early engagement by parties – particularly to discuss, agree upon and execute e-discovery – 76 percent of corporate counsel attorneys report that the new rules have not helped trim costs nor reduce the scope of discovery work for their companies. In fact, survey findings show that the new FRCP have created an increase in discovery workload for corporate America in most cases. For example, 73 percent of survey respondents said that their company has seen an increase of up to 20 percent in discovery workload as a result of the new rules since their implementation last year.

Positive Steps Taken

Despite challenges and misconceptions, many corporations appear to be taking the fundamental steps necessary to ensure their companies are compliant with the new rules. For example, 82 percent of respondents said their company has a document retention policy, two-thirds said they have implemented a formal legal holds process and more than 40 percent said they have conducted employee training for compliance this year. Further, a quarter said they have hired an e-discovery counsel or ESI coordinator.

Additionally, just over half of respondents said they have taken more elements of the discovery process “in-house” as a way to control costs and management of the discovery process.

“The future of e-discovery will become increasingly complicated, and corporations should anticipate challenges ahe