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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

While records and information management (RIM) requires a multidisciplinary approach, qualified legal counsel is often in the best position to ensure compliance with the myriad of record retention laws and to help companies significantly reduce storage and litigation costs. Here is a primer on RIM concerns and why properly trained legal counsel is the best choice for handling it:

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Content management with audits and litigation in mind: Legal counsel should assist all company functions in understanding what to write and what not to write. For example, records addressing a quality issue should be factual and not include legal buzzwords such as “defect,” “liable” or “guilty,” nor should they contain subjective judgment words like “dangerous,” “risky” or “unsafe.”

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Accurate assessment of company documents: Because legal counsel is cross-functional, it is in a prime position to inventory records across the company and help determine where and how records should be retained to facilitate a reasonable turnaround if the data is requested, for example, in accordance with the TREAD Act.

Proper retention of key records: This involves legal requirements and takes into consideration the duration of the statutes of limitations. Records must be retained long enough to substantiate claims or defenses in audits or litigation. Most auto suppliers are ISO certified and while ISO 9001 specifies that certain quality records be retained (see section 4.2.4), it does not provide retention periods. That said, there may be legal requirements in the U.S. or otherwise (see Verband der Automobilindustrie [“VDA”], Quality Management in the Automotive Industry, Documentation and Archiving, Volume 1) dictating the retention of these records. Even in the absence of such requirements, key records should be retained long enough to pursue or defend an action. If you have locations in Germany, the VDA should be consulted. This document specifies that critical characteristic records must be retained for 15 years or longer.

Defensible disposition: There is a cost associated with the retention of electronic data that is redundant, obsolete and trivial, so-called ROT, as well as outdated key records. It has been estimated that the cost to retain just one GB of data ranges from $2 to $20 per year. Storing 1 TB costs between $2,000 and $20,000 annually.&nbsp;

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Even a medium-sized company, with 400 to 500 employees, stores approximately 30 to 40 TB of data. While the IT staff might argue that storage is cheap and may be getting even less expensive, the issue is that the amount of data to be stored is growing at a staggering rate. A study by the Pew Research Center found that the volume of organizational data doubles every 1.2 years.

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Other studies have estimated that data past its retention period, or is otherwise ROT, accounts for 50-70 percent of data stored by the average organization. Essentially, most companies are paying to store large amounts of data they could actually delete. A one-time deletion of 25 percent of data could result in savings of $30,000 to $150,000 over five years for a medium-sized company.

In addition to reducing storage costs, decreasing the volume of outdated records and data can mitigate legal risk and the costs associated with eDiscovery during litigation. A study by the Minnesota Journal of Law, Science and Technology noted that eDiscovery costs range from $5,000 to $30,000 per gigabyte.

By properly disposing of data before a legal hold occurs, a company can reduce its review and production costs and, potentially, avoid having to explain misleading and/or poorly written documents during litigation or audits.

Data Analytics and eDiscovery

Let Legal Take the Wheel on Records, Information Management

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