Five E-Discovery Lessons from the Global Credit Crunch
September 16, 2008 As part of my presentation at CEIC 2008, I briefly explored the relationship between global economic events and litigation trends. The flow-on effects of significant defaults on subprime mortgages in the United States have extended well beyond Wall Street. Notwithstanding, they provide the opportunity to reinforce sound principles for e-discovery management.
1. The Root Cause
A negative earnings report often causes a stock price to decline. A very significant decline may force a corporate collapse. Over-eager lending on subprime mortgages has arguably been identified as the root cause of the current global credit crunch.
Could a more proactive approach to e-discovery, and information management, generally, have at best, avoided and at worst, minimised e-discovery issues currently faced by your law firm or organisation?
2. Know Your Limits (and Stick To Them!)
The current pace of the e-discovery industry is daunting for some, exhilarating for others. Understand your expertise, resources and budget. Know that your law firm or organisation may not be able to manage each and every aspect of an e-discovery project, without enticing increased risk.
3. Remain Diligent
It is without doubt that e-discovery presents unique ethical challenges. However, the failure to disclose relevant information, in a timely manner to shareholders, will arguably hold just as dire consequences before a court.
4. Options are not Optional
Appropriate risk mitigation requires forward thinking and avoidance of having “all your eggs in one basket”. Just as governments and white knights have provided an option of last resort to select corporates on the verge of collapse, others have not been as lucky.
Being forced to accept poor options or arguably onerous burdens during the e-discovery process, should not be an option.
Greenspan, who left office in 2006, said he expected more failures before the crisis eases.
"...And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers."
5. The Importance of Perception
Actions often speak louder than mere words. Then again, the impacts of both are largely dependent on how they are conveyed, both internally and externally.
“I am surprised. It seems amazing that a business as huge as this can fail in this way,” Lomas said at a news conference. “What it underlines for me is the massive importance of market confidence. Once that's gone and nobody wants to trade with you, you're in serious trouble ... there's no way back.”
Reader Comments (1)
You raise very valid points.
From a legal technology point of view - it is a fascinating thing to be seeing the effects of massive losses and downturns on Global stock markets, however a direct inverse correlation with requirements of legal technologies and electronic discovery due to increased litigation & due diligence that is directly attributable to the state of the world at the moment.
Thanks as always.
Doug.