September 11, 2024 · 12:36 PM

Three Key eDiscovery Lessons from Domus BWW Funding v. Arch Insurance Company

By John Patzakis

Domus BWW Funding v. Arch Insurance Company is a recent decision focused mostly on issues and challenges related to preservation of Electronically Stored Information (ESI) in a large enterprise. It is an instructive case for in-house counsel, as it demonstrates how avoidable eDiscovery failures can lead to potentially devastating court sanctions.

Case Background

In Domus BWW Funding, LLC v. Arch Insurance Company (decided August 12, 2024), Plaintiffs brought an insurance coverage claim against Arch Insurance for defense costs related to an underlying civil matter. In its first eDiscovery failing, Arch Insurance did not issue a litigation hold until four years after having constructive notice of the claim.

Employees at Arch Insurance identified relevant ESI, but due to what the court identified as a lack of supervision by counsel, critical potential evidence was mishandled. Arch Insurance’s In-house counsel did not follow up with the paralegal tasked with executing an ESI search, the parameters of which both parties agreed to. Additionally, Arch Insurance inadvertently deleted key emails during a data migration in the summer of 2023.

The Court criticized Arch Insurance’s handling of the ESI search, describing the delay as indicative of “counsel’s disdain” for its discovery obligations. The Court found Arch Insurance’s actions caused prejudice to the Plaintiffs in the form of delays, costs and lost evidence, justifying sanctions under Rule 37(e)(1). The Court ruled that the Plaintiff could introduce evidence of Arch Insurance’s eDiscovery failures at trial and would issue a jury instruction as an evidentiary sanction.

There are three key takeaways from this case:

1. Arch Insurance’s Main Failing was Lacking an Established eDiscovery Process.

Arch Insurance’s challenges centered on its complete lack of an existing process to address eDiscovery preservation. Arch Insurance and their counsel failed to issue a timely legal hold. And when the collection did finally occur, it was highly reactive, haphazard, resulted in inadvertent destruction of ESI, and required the manual efforts of custodians because Arch Insurance had no enterprise-capable collection capability.

Having an established and demonstrable eDiscovery process will not only reduce costs and risk, but it will also demonstrate to the court that your organization takes its eDiscovery obligations seriously. And this case shows that a lack of established eDiscovery process will leave the court with the opposite impression.

2. Court Faults Arch Insurance’s Unsupervised Manual Collection

Arch Insurance improperly relied on custodians to collect ESI without attorney supervision. Courts have repeatedly criticized this practice. (See E.E.O.C. v. M1 5100 Corp., (S.D. Fla. July 2, 2020), district court excoriates defense counsel for allowing the practice of unsupervised custodian ESI self-collection, declaring that the practice “greatly troubles and concerns the court.”)

This again is a symptom of a lack of established eDiscovery process. Without a clear workflow with automated reporting, tracking, transparency and technical execution, it is difficult for attorneys to effectively supervise such a disjointed and ad-hoc exercise.

3. Arch Insurance Failed to Take Advantage of a Targeted Search

While the parties stipulated to a targeted and proportional keyword search protocol to identify and collect potentially relevant ESI, Arch Insurance lacked an enterprise capability to execute such a search. Properly targeted preservation initiatives are favored by the courts and enabled by next generation software to search data sources quickly and effectively in-place throughout the enterprise. The ability to collect data directly and transparently from custodian laptops, desktops, Microsoft 365 and other cloud sources into a RelativityOne / Relativity workspace is a game-changer that enables Attorney’s to begin review in hours rather than weeks.  But without such a capability, an organization must revert to manual efforts that either result in costly data over-collection or faulty, non-defensible effort.

In sum, Domus BWW Funding is an illustration of what often happens when an organization does not have a systematic eDiscovery process in place. An effective process is established through the right people, processes and technology, such as the capabilities of the X1 Enterprise Platform. X1 Enterprise Platform significantly streamlines the eDiscovery workflow with targeted, in-place search and collection with direct upload to a review platform, thereby significantly reducing costs and risk, allowing in-house counsel to demonstrate to the court that they take their discovery obligations seriously.

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August 27, 2024 · 10:36 AM

Addressing Critical Information Governance Challenges from Departing Employees

By John Patzakis and Chas Meier

When employees leave an organization, they often leave behind a significant amount of valuable information. This poses major information governance challenges, as companies must decide how to manage litigation holds and retain essential data assets.

A common response to this challenge is to retain departed employees’ laptops, hard drives, or keep their Microsoft 365 or Google Workspace accounts active. However, this approach is both expensive and inefficient. Another often-used method is creating a full disk image of the laptop for archiving. While this preserves data, it is a slow and cumbersome process that can require vast amounts of storage, sometimes reaching petabytes, which becomes both costly and unwieldy. Neither approach offers the ability to gain insights from the data, nor do they allow for intelligent and targeted data extraction, making it difficult to leverage these data assets effectively or comply with legal and regulatory requirements.

To address these challenges, X1 has developed a game-changing workflow utilizing our X1 Enterprise Platform, offering a streamlined and cost-effective solution. With our platform, organizations can process hundreds of laptops and Microsoft 365 accounts in a single day. Leveraging X1’s unique and patented in-place indexing technology, data extraction becomes highly targeted, allowing for efficient responses to litigation holds. This means that each litigation scenario can have a tailored search applied across all relevant data sources simultaneously, enabling precise data extraction.

For example, one company with over two dozen active litigation holds has employed X1’s solution, allowing them to save detailed keyword search routines crafted by their counsel. These searches can be quickly and programmatically applied not only to data on specific laptops but also to archived PSTs and associated Microsoft 365 accounts. Once the targeted data is extracted, the company repurposes the laptops for new employees, resulting in significant cost savings—estimated to be in the millions—and a reduction in storage requirements.

Beyond managing litigation holds, another core benefit of X1’s solution is its ability to extract key data assets from departed employees to retain within the company’s knowledge base. This capability is especially valuable for law firms, consulting firms, and organizations that rely heavily on high-end knowledge professionals. For instance, one law firm uses X1’s workflow to rapidly search large, archived PST files from departed attorneys to identify and separate key data related to ongoing matters. This ensures that crucial information remains accessible to the firm or is appropriately transferred to the attorney’s new firm. Additionally, vital legal and business insights from retained documents and emails are quickly mined and reviewed, enhancing the firm’s overall knowledge management.

Client Example:
• Overview: A major pharmaceutical retailer uses X1 within Relativity to perform 50 data collections weekly, covering both Mac and PC environments. The system allows them to repurpose laptops from departed employees within days instead of months, leading to substantial savings.
• Integration: The company eliminated the need for traditional eDiscovery tools to remediate laptops, opting instead for X1’s more efficient approach.
• Time and Cost Savings: This shift has saved the company millions by:
1. Reducing the reliance on costly traditional eDiscovery tools.
2. Minimizing the risk and cost associated with retaining unnecessary data.
3. Reintroducing millions of dollars’ worth of computer equipment back into circulation.
4. Completing these processes in one-tenth the time it would have traditionally taken, vastly improving operational efficiency.

Conclusion:
In today’s fast-paced and data-driven world, organizations face numerous challenges when it comes to managing and retaining data from departed employees. Traditional methods, such as retaining physical devices or creating full disk images, are not only costly and time-consuming but also fail to provide the flexibility and insight needed to effectively manage information assets. X1’s innovative solutions, particularly its patented in-place indexing technology, offer a modern, scalable, and efficient alternative. By enabling targeted data extraction, streamlining the process for litigation holds, and supporting knowledge retention, X1 empowers organizations to manage data governance with precision and agility.

For companies navigating complex data environments, especially those utilizing BYOD policies, X1 Enterprise Platform ensures compliance while protecting privacy. By implementing X1’s advanced platform, organizations can not only reduce costs and save valuable time but also gain a strategic advantage in managing their information governance needs. We invite you to explore how X1 can transform your data management processes and help you stay ahead in the ever-evolving digital landscape.

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August 6, 2024 · 10:04 AM

Granting Microsoft 365 Super-Admin Privileges to eDiscovery Service Providers is Very Risky and Unnecessary

By John Patzakis and Chas Meier

In a world where data breaches are not just possible but expected, securing sensitive information becomes paramount. However, in many cases, organizations are unnecessarily handing over the security keys to the kingdom to eDiscovery Service Providers by providing them with very heightened security privileges to their Microsoft 365 tenants. This is because the more manual methods relied on by service providers often involve gaining high-level permissions usually only reserved for senior trusted IT directors and executives within the client organization. Such broad access can lead to unauthorized data access, including creating new accounts for others outside the organization, data overcollection, and unintended data modifications and even deletions. These unnecessary accommodations can cause severe irreversible damage, security breaches and overall complication with compliance efforts.

Clients are often told such high-level security access is absolutely necessary. In truth, service providers only resort to such measures when they fail to utilize best practices technology. In many cases, service providers, once they gain elevated administrative permissions, simply run basic scripts that they position as proprietary, which have little functionality other than the bulk download of M365 data. These scripts only work if very high-level access is granted to the user of the scripts. Once the service provider completes their mass data download from M365, they are off to the races with their traditional highly lucrative eDiscovery workflows of excessive data volumes due to overcollection, extensive processing and project management, and final eventual staging into review, all leading to excessive costs and unnecessarily extended timelines.

In contrast, our customers believe X1’s strategy for M365 Data Access is unique and disruptive to legacy approaches still utilized by many service providers. We designed our approach to maximize security, enhance operational efficiency, and ensure economic advantages for our clients, setting new benchmarks that challenge conventional industry practices.

  1. Uncompromised Security with Read-Only Access
    X1’s approach to accessing client information in a read-only least privileged manner exemplifies our commitment to security. In our approach a client grants read-only permissions to the X1 Enterprise solution licensed and controlled by the client, through an application that also remains under the control of our client and has a built-in expiration. No X1 employee ever needs to have access to or personally utilize the client’s M365 credentials. There is no ability for X1 to create new accounts or even delegate M365 permissions. This approach eliminates the risks associated with more invasive access levels that other eDiscovery providers often require.

    X1’s methodology ensures that the data remains pristine and untouched throughout the eDiscovery process. This approach not only supports stringent compliance with legal and regulatory standards but also shields organizations from the pitfalls of unauthorized data manipulation. It significantly reduces the potential for costly security incidents, reinforcing the trust our clients place in us to handle their most sensitive information.

  2. Index-in-Place: Elevating Data Integrity and Efficiency
    Our “index-in-place” technology stands in stark contrast to the traditional data extraction methods employed by many service providers. These providers often relocate substantial data volumes from clients’ M365 tenants to their environments—a practice driven by the desire to increase hosting volumes and, consequently, revenue. This not only introduces significant security risks but also strains client resources and infrastructure.

    By indexing data directly within its native environment, X1 maintains the integrity and security of the data. This approach significantly reduces the exposure of data to external threats during transfer and storage. It also enhances the speed and accuracy of search and collection processes, enabling quicker responses to legal inquiries and reducing the overall time and cost of eDiscovery.

    Moreover, this method highlights our principle of avoiding the “fox guarding the henhouse” scenario, where providers have incentives that might conflict with client interests. Our clients appreciate the transparency and integrity of keeping their data within their controlled environment, free from unnecessary external manipulation or exposure.

  3. Transparent Pricing Promoting Efficiency and Reuse
    X1’s innovative pricing model stands out by encouraging the efficient reuse of tools without penalizing clients for data volume. This approach directly contrasts with the common industry practice where costs escalate with the volume of data hosted or processed. Our pricing structure is designed to align closely with our clients’ needs for predictable and reasonable costs.

    By not charging based on data volume, we foster a more sustainable and rational use of resources, allowing our clients to plan and budget more effectively. This pricing strategy supports not just cost savings but also promotes a more strategic use of eDiscovery tools, encouraging practices that are both economically and environmentally more sustainable.

Conclusion
X1 is dedicated to setting a higher standard for secure, efficient, and cost-effective data management solutions in Microsoft 365 environments. Our innovative approaches to read-only access, index-in-place technology, and volume-independent pricing ensure that our clients receive unparalleled service that prioritizes their security, operational efficiency, and financial well-being.

We invite you to join us in this transformative journey and experience the peace of mind that comes from knowing your data remains in place until you target a collection to migrate into review. For a demonstration of the X1 Enterprise Platform, contact us at sales@x1.com. For more details on this innovative solution, please visit www.x1.com/x1-enterprise-platform.

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July 23, 2024 · 10:55 AM

Enterprise Search is Dead. A New Approach is Here.

By John Patzakis

In today’s fast-paced digital world, employee productivity hinges on robust enterprise search capabilities that allow quick and easy retrieval of an organization’s documents, emails, and other unstructured data. Despite the critical nature of this capability, many organizations have historically invested considerable time, money, and effort into now-obsolete tools built on flawed enterprise search architectures. These legacy tools, often ineffective, have become completely untenable in the era of remote work and the widespread use of platforms like Microsoft 365 and Google Workspace (formerly G Suite).

The Limitations of Traditional Enterprise Search
Traditional enterprise search architectures rely on gathering all relevant data through crawling and mass migration tools, centralizing it into a single repository. This approach, though prevalent for years, has significant drawbacks:

  1. Security and Governance Risks: Duplicating and then centralizing sensitive data in a single repository creates a prime target for cyberattacks, runs afoul with data protection regulations, and is completely contrary to information governance principles.
  2. Scalability Issues: The sheer volume of data in modern enterprises, often amounting to hundreds of terabytes, makes central repositories impossible.
  3. Incompatibility with Modern Platforms: Legacy systems are ill-suited to integrate with platforms like Microsoft 365, which are now dominant in enterprise environments.

Duplicating vast amounts of sensitive data and centralizing it in an external repository is not only risky but also extremely impractical. Despite this, some vendors continue to push these outdated solutions, ignoring the evolving needs of modern enterprises.

X1 Search: A Revolutionary Approach
X1 Search addresses these challenges with a game-changing approach that offers a distributed, individualized enterprise search workflow. This innovative architecture brings several key benefits:

  1. Distributed Index and Search In-Place Technology: X1’s proprietary and patented technology enables scalable search capabilities while maintaining robust security. Each employee has an individual search index aligned with their permissions, ensuring they only access data they are authorized to see.
  2. No Mass Data Duplication: Unlike traditional systems, X1 does not require the mass duplication of data. Users interact with original documents and emails, facilitating actions like opening, replying to, or forwarding them directly from the search interface.

Enhancing Productivity with Unified Search
The latest iteration of X1 Search transcends its desktop origins, offering the ability to instantly search across various platforms, including Microsoft email, Teams, OneDrive, SharePoint, as well as local files and emails, all within a single unified interface. This powerful capability can significantly boost productivity, saving users hours each day by streamlining access to critical information. Additionally, X1 Search now supports Google Drive and Gmail, broadening its utility across different cloud ecosystems.

User Experience and Endorsements
A critical aspect of X1 Search’s success is its excellent user experience. With over 100,000 users, the solution has garnered widespread acclaim. Max Underwood, a long-time user from a large defense contracting firm, states, “X1 Search is my go-to, must-have search application on my desktop. Nothing even comes close to matching X1 Search’s speed and accuracy in finding what I am looking for exactly when I need it.”

Conclusion
As organizations navigate the complexities of remote work and vast amounts of unstructured data, traditional enterprise search solutions fall short. X1 Search’s innovative approach, leveraging distributed index and search in-place technology, offers a secure, scalable, and user-friendly alternative. By eliminating the need for mass data duplication and providing a unified search experience across multiple platforms, X1 Search is setting a new standard for enterprise search capabilities, empowering employees and enhancing productivity in the modern digital workplace.

X1 Search is available for individual purchase on the X1 website and large volume, enterprise purchase by contacting X1 at sales@x1.com. To learn more about X1 Search visit www.x1.com/products/x1-search.

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June 25, 2024 · 11:28 AM

X1 Achieves Unmatched Throughput and Results in Several Recent M365 eDiscovery and Information Governance Engagements

By John Patzakis and Chas Meier

As discussed previously on this blog, X1 and our active enterprise customers believe X1 Enterprise Collect is the best solution available to address M365 data sources as well as on-premises sources such as laptops and file shares. In recent weeks, our customers and partners have executed several projects on a massive scale and have captured and documented X1’s performance metrics.

No other solution in the industry can index data across the enterprise as fast or as scalable as the X1 Enterprise platform, including Microsoft Purview Premium. When compared to Microsoft Purview, with its built-in architectural constraints and throttling limitations, X1 can index nearly eight times the daily volume of Purview or any other competitive “connector” technology can achieve in the market. X1’s distributed index-in-place methodology, combined with horizontal scaling of our index hosts, make X1 the only solution truly capable of handling the rapid indexing, identification, searching and collecting/remediation of mass data sets in the TB’s or PB’s across the modern enterprise. X1 effectively addresses cloud and on-premises data sources in a unified manner, including distributed endpoints, network file shares, M365 data sources including Mail, OneDrive, Teams, and SharePoint, as well as other cloud data sources.

In several recent large-scale eDiscovery and information governance projects, X1 Enterprise Collect, on average, was able to collect and index M365 data (MS Mail [including archived mail and modern attachments] Teams, One Drive and SharePoint) at a rate of approximately 350 GB per day. This is nearly 8 times faster than Microsoft Purview, with its documented throughput limitations at 2GB per hour. X1 can achieve even faster throughput by scaling out virtual cloud computing resources.

Daily indexing volumes for endpoints and on-premises file shares vary due to the performance characteristics of each machine, but X1 indexes and searches endpoints in parallel yielding extremely high aggregate daily indexing and collection throughput.

Detailed documentation on these metrics and a further briefing on these engagements can be provided upon request.

X1 achieves such scalability through a decentralized approach that does not rely on the M365 or Purview search Index, which has known issues with the number of file types supported, consistency of search results, accuracy, and throughput. X1’s approach enables a very scalable, accurate, defensible, and robust indexing and data collection at unmatched speeds.

In addition to greatly reducing risk, X1’s capabilities also enable massive cost savings. X1 Enterprise Collect significantly streamlines the eDiscovery workflow by bringing targeted collection results directly into the review platform, thereby eliminating over collection, over processing, and over importing just to cull. X1 will populate ESI (Electronically Stored Information) straight into Relativity from an X1 collection without multiple hand offs, extensive project management and inefficient data processing.

The ability to collect data directly and transparently from custodian laptops, desktops, M365 and other cloud sources into a RelativityOne/Relativity workspace is a game-changer that enables legal and compliance teams to begin review in hours rather than weeks. As facts become known and collection focus changes, X1 allows teams to pivot and respond in hours. With the ability to efficiently take multiple bites of the apple, X1 enables teams to start fast and stay agile.

For a demonstration of the X1 Enterprise Collect Platform, contact us at sales@x1.com. For more details on this innovative solution, please visit www.x1.com/x1-enterprise-collect-platform.

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