Catalyst or Cataclysm?

Information Management Journal, Sep/Oct 2004

A Message from the Editors

Incremental changes often make a difference in process, spurring a rethinking of how things are done. This has been true in the records and information management (RIM) world, where attention has focused on the transition from paper to electronic records and their attending policy, procedural, and political aspects.

Now comes a shift in perspective that is reshaping ideas about what is required for good - or at least adequate - records management, the cumulative result of subtle changes over the past several years. Thanks to high-profile investigation, litigation, and regulation, RIM topics have moved from industry journals to general business magazines and even to the mainstream press, ending the image of RIM as a custodial function in the minds of many. Meanwhile smaller, subtler changes have occurred as well, and their cumulative effects will have an impact for years to come.

The coming change in RIM is like an earthquake at sea, washing a tidal wave over the entire profession. Broadly, it goes to the heart of why, how, and by whom records are managed. It has the power to drive progress and move issues forward, but it will also threaten basic tenets, accepted principles, and conventional knowledge. The force for change has many positive aspects in that things that languished will finally get done; but it may well divide records practitioners into two classes: those who learned records management in a paper-based world and are trying to adapt that knowledge to fit the electronic age, and those who, like the records they manage, have only lived in a digital world.

Changes in Discovery and Settlement

The justification for RIM, once based largely on avoiding legal discovery and settlement costs, has shifted. The pendulum on discovery costs is starting to swing from defendant to plaintiff: In Kubulake vs. UBS Warburg, a gender discrimination suit, UBS Warburg estimated its costs to produce e-mail in response to Kubulake's discovery request at $250,000. The company asked the court to consider making the plaintiff share the costs of document production. Kubulake countered that she was only one individual with limited resources, not a major corporation. The court held that Kubulake should pay $75,000 toward the cost of e-mail production for use in her case.

Given the costs associated with discovery and the knowledge that many companies want to avoid those costs, settlement demands have escalated in recent years. But, in another sign of change, some companies refuse to be intimidated by the threat of what may or may not be found in their records, choosing to take their chances in court rather than be intimidated by extortionist settlement demands. Pharmaceutical firm Bayer AG devised a twopart strategy for settlement of product liability lawsuits on its Baycol product, setting a range of amounts payable to those actually harmed and aggressively contesting other claims. In a turnabout on the usual practice of plaintiffs' demands for overreaching discovery, Bayer won an order requiring plaintiffs to document injury in order to proceed, a ruling that is expected to dismiss half of the 6,200 remaining Baycol cases.

Discovery costs and litigation will remain risk factors that can be met with sound records management, but the work of groups such as the Sedona Conference, a research and education institute dedicated to the advanced study of law and policy, will contain or erode these costs in the future.

Why Manage Records Redux

Displacing the emphasis on legal matters, broad-based legislation such as Sarbanes-Oxley has had enormous effect on the RIM industry. The realization that records management is an important part of compliance has changed the perspectives of everyone responsible for controlling corporate risk, a fact not lost on the technology market. Forrester Research claims that the records management imperative is driving enterprise content management technologies, a market expected to be worth $1 billion by 2006. Forrester sets the compound annual growth rate (CAGR, that is, the year-over-year growth rate from a base amount) for RIM at 59 percent by 2006. To get an idea of how large this is, consider that the CAGR for the electronic storage market is about 20 percent.

Lucrative markets attract new players. The diversity is good in that many ideas are represented; it is bad in that, without a codified body of knowledge or best practice, everybody and anybody can claim RIM expertise regardless of their experience or depth of understanding, and this is already happening.

Lawyers are getting into the records business as consultants who advise their clients on discovery strategy, e-mail retention, and other recordsrelated topics. One attorney author advises clients to save e-mail according to the job titles in organizations, so that all e-mail for the president, vicepresidents, board members, and others in senior-level positions would be kept forever. As most RIM professionals know, this practice, if followed, is tantamount to labeling a box "Jon Smith, VP of Marketing" that is then stored long after Smith's tenure without hope of review, retrieval, or disposal, taking up space and harboring who knows what.