Enterprise-wide records training: key to compliance, success: in today's business environment, every employee must be trained how to correctly manage, control, and protect corporate records and information.

• Author: Swartz, Nikki

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Records and information management (RIM) has never been more critical to organizations than it is today. It matters not what industry businesses are in, what customers they serve, whether they are public or private, or whether they have 10 employees or 10,000. In today's high-tech, high-stakes business environment, information and its management can play a central role in an organization's success--or its downfall.

Today, all employees must become, in effect, records managers, or they must at least be trained in the basics of organizing, managing, and preserving their company's valuable information assets. They all have a stake in making sure records are efficiently and effectively managed so that their organization's administrative, legal, audit, regulatory, customer, and competitive interests are served.

With the massive amount of information created on a daily basis by each employee, the growth in the volume of data in electronic formats, and legal and regulatory requirements, including the Sarbanes-Oxley Act (SOX), managing corporate information has become serious business--with serious consequences for not doing it right.

Exabytes of (Mostly Electronic) Information

With more information being created today than ever before, managing it is no easy task.

According to research by University of California-Berkeley professors Peter Lyman and Hal Varian, 800 megabytes of new information is created every year for every person on the planet, with the majority of it stored digitally. That's roughly equivalent to a stack of books 30 feet high.

Not only is there more information, but it is also increasingly electronic. According to a CIO Insight report, "May 2006 Information Management Survey: CIOs Struggle to Generate Full Value from Their Information," e-mail contributes at least 500 times more data each year than the amount generated by new webpages. According to IDC, the volume of e-mail messages sent annually by business worldwide is more than one exabyte--this is equivalent to all the information that would be contained in 74,000 libraries the size of the U.S. Library of Congress' book collection.

"In fact, 93 percent of all of the information that a business generates today is generated in electronic format--e-mail, word processing documents, information on databases" says Ken Withers, managing director of The Sedona Conference and former senior education attorney at the Federal Judicial Center in Washington, D.C. Employees have been directly affected by the sea change. Instead of file cabinets or shelving systems located in one room or on one floor, employees now have their own desktop computer as well as electronic devices and formats that make it fast and easy to create, alter, access, and share e-mail, databases, word processing documents, and spreadsheets.

This means that maintaining and preserving a complete, accurate, and reliable record is much more difficult. Electronic records are more easily altered than paper records and are extremely portable--file cabinets' worth of information can accompany an employee anywhere he or she goes via a laptop, removable flash drives, or personal data assistant.

The E-mail Achilles Heel

The American Bar Association's Digital Evidence Project and the National Law Journal estimate that more than 30 billion e-mails are sent every day, with 2.7 trillion expected to be sent by 2007. The widespread use of e-mail in the workplace--for both business and personal reasons--poses several challenges and risks for all organizations.

Managing e-mail and not being able to produce e-mail records requested by courts and regulators costs big companies big bucks Bank of America and Morgan Stanley were recently given million-dollar fines for not being able to produce e-mail evidence.

According to research firms, e-mail is now the most-frequently requested type of business record by courts and regulators. Corporate Counsel says 50 to 100 percent of all evidence is e-mail today. Yet that same study noted that 59 percent of companies do not have e-mail retention policies. Research firms have found that only about 50 percent of all large companies have some kind of e-mail archiving system in place. With that in mind, more than half of all organizations should be worried about their ability to produce e-mail in the event of litigation.

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Organizations typically have, at most, only a few days to produce specific electronic records for regulators or prosecutors. If an IT department cannot find the records or takes too long to do so, courts are usually not forgiving. In a 2005 trial, when Morgan Stanley failed to produce hundreds of company e-mails as required, the judge told the jury to assume bad faith on the part of the investment firm for mishandling an e-mail discovery request. The judge ruled for the prosecution and ordered Morgan Stanley to pay $1.6 billion.

According to Corporate Counsel, a typical Fortune 500 company is dealing with about 125 ongoing legal matters at any given time, with at least 75 percent requiring e-discovery. What should be most frightening for companies is this figure from Corporate Counsel: 62 percent of surveyed companies doubted they could show their e-records are accurate and reliable.

While it's important for a company to implement an effective e-mail use and retention policy, it is equally important for that company to communicate its policy to employees as well as to properly train them to handle legal issues that may arise.

Who's Afraid of Legal Holds?

Organizations that do not properly manage their e-mail may be in trouble if litigation is probable. Legal, or litigation, holds require a company to retain all evidence, including electronic, when it is the subject of pending or potential litigation or investigation.

On a normal, day-to-day basis, an organization's focus should be on records retention. During legal preservation and discovery, however, they must focus on records preservation.

Legal preservation requires the organization to stop disposing of anything that it or the other side might need- including records and non-records--even if they have reached the end of their retention period and could normally be destroyed according to policy. And that information must be retained for as long as the legal hold exists, while ensuring that evidence is not altered in any way once subject to preservation.

Discovery is the process of finding, preserving, and producing information in response to a dispute or lawsuit. However, according to the 2005 Cohasset Associates...