Deidre Paknad of PSS Systems on the next frontier in the litigation hold process

August 19, 2009 | Leave a Comment

PSS Systems is a pioneer in the development of litigation hold solutions, having introduced the Atlas Solution Suite over two years prior to the adoption of the electronic discovery amendments to the Federal Rules of Civil Procedure. Currently, PSS solutions govern over 210,000 active legal holds, involving more than 15 million custodians. Readers of this blog are aware that one of the main causes of spoliation sanctions is the failure of organizations to adequately preserve data. This problem is particularly acute in large organizations, where counsel must adequately disseminate litigation holds from headquarters to the most distant branch office. (One of the figures in Zubulake v. UBS Warburg was based in Hong Kong.)

I spoke with Deidre Paknad, the president and CEO of PSS Systems, and asked her about the challenges she sees in this area. She responded that operationalizing the litigation hold process is probably the biggest challenge faced by organizations. Firms need an accurate, consistent, and ongoing understanding of the status of their litigation—not only from the institution of a legal hold, but through the process of the case and the termination of the litigation. Multiply this by hundreds of cases and thousands of custodians, and the issues are readily apparent. This predicament causes many general counsel to throw up their hands and impose a “hold everything” litigation hold upon the company—causing information paralysis and nightmares for the IT department.

Ms. Paknad observed that many attorneys are recognizing the implications of the “hold everything” position, and the need to accurately track litigation holds. However, she believes that the next frontier of the litigation hold process involves the IT department. It’s not enough for the legal department to send a legal hold notice (often just an e-mail) to the IT department. Legal holds must be transparent to the IT organization—they, as well as the legal department, must have the same accurate, consistent and ongoing understanding of the legal holds affecting the company.

An example of the consequences of the failure to involve the IT organization in the legal hold process was demonstrated in In re NTL Securities Litigation, 244 F.R.D. 179, 2007 U.S. Dist. LEXIS 6198 (S.D.N.Y 2007). Spoliation sanctions were imposed upon NTL despite the fact that counsel circulated two litigation hold notices. After the notices were disseminated, NTL outsourced their IT operations to IBM, who was never made aware of the hold. Employees received new computers when the IT operations were outsourced, but no one knew whether e-mails written on the old computers were saved or not.

PSS Systems has developed the Atlas for IT module of the PSS Solution Suite to address this issue. The module contains a legal governance workflow system specifically designed for the alignment of the legal and IT departments. The IT department can determine in real time the systems subject to a legal hold and insure that data is preserved when personnel leave or systems are retired.

The transparency of legal holds throughout the organization is also an important driver in cost reduction. When legal holds are accurately targeted, data not needed for business or litigation purposes can be discarded. Less data in the organization means less data which needs to be reviewed for discovery requests. Legal hold visibility also facilitates more accurate planning and discovery cost estimation.

A successful and effective litigation hold process can mean the difference between a settled case and spoliation sanctions, which can turn the entire focus of a matter from the merits to discovery failures. PSS Systems has developed the Atlas Suite, the only end-to-end solution for corporate legal, IT, records and business users designed and built on a single, cohesive governance platform. Their web site is www.pss-systems.com.

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