Category Archives: Data Audit

Want Legal to Add A LOT More Value? Stop Over-Collecting Data

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The 2019 CLOC (Corporate Legal Operations Consortium) Conference ended last week, and by all accounts it was another great event for an organization that continues to gain relevance and momentum.  A story in Thursday’s Legaltech News entitled “Why E-discovery Savings Is About Department Value for Corporate Legal” summarized a CLOC session focused on “streamlining e-discovery and information governance inside corporate legal departments.”  At the risk of sounding biased, that seems like a perfect topic to me.

The article’s conclusions from the panel session, namely adding value by wresting control of eDiscovery from outside counsel, consolidating hosting vendors and creating a “living data map”, were all spot on and certainly useful.  One way for legal to add enormous value, however, was NOT discussed: collecting far less data as part of the eDiscovery, investigatory and compliance processes.

As we highlighted on an insightful webinar with our partner Compliance Discovery Solutions last Tuesday (which can be viewed here), the way most eDiscovery practitioners conduct ESI collection is remarkably unchanged from a decade ago, an example of which is shown in the infographic below: consult a data map, image entire drives from each and every custodian (e.g. with EnCase), load these many images into a processing application (e.g. Nuix), process these huge amounts of data (most of which is entirely irrelevant), then move this now-processed data into a review application (e.g. Relativity).

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This legacy collection process for GRC (Governance, Risk & Compliance) and eDiscovery is wildly inefficient, disruptive to the business and costly, yet many if not most practitioners still use it, most likely because it’s the status quo and change is always hard in the legal technology world.  But change here is a must, as this “image everything à then process it all à and only then begin reviewing” workflow causes myriad issues not just for legal but for the company as well:

  • Increases eDiscovery costs exponentially. The still-seminal Rand study on eDiscovery pegged an overall cost-per-GB for identification through production of $1,800/GB.  While some elements of this price have come down in the intervening 6-7 years, especially processing and hosting rates, data volumes and variety have grown by at least as much thereby negating these reductions.  Imaging entire drives by definition collects far more data than could ever be relevant in any given matter – and the costs of this overcollection multiply every step thereafter, forcing clients to pay hundreds of thousands if not millions of dollars more than they should.
  • Is extremely disruptive to employees. Forensically imaging a drive usually requires gaining physical access to the laptop or desktop for some period of time, often for a day or two.  Put yourself in each of those employee’s shoes: even if you are given a “loaner” machine, you still don’t have all of your local information, settings, bookmarks, etc. – which is a major disruption to your work day and therefore a significant drag on productivity.
  • Takes far too long. With forensic imaging of drives requiring physical access to a device, each custodian’s machine must be dealt with.  In many collections, custodians are spread across multiple offices, or on vacation, or remote employees, which often extends the process to many weeks if not months.  All of this time lawyers are unable to access this critical data (e.g. to begin formulating case strategy, negotiating with opposing counsel or a regulator, etc).
  • Creates unnecessary copies of data that could otherwise be remediated. An often-overlooked byproduct of over-collection is that it creates another copy of data that is outside of most (if not all) data remediation programs.  For companies that are regulated and/or encounter litigation regularly, this becomes a major headache and undermines data governance and remediation programs.
  • Forces counsel to “fly blind” for months. Every day the IT and legal teams are spending forensically imaging each custodian’s drives, then processing it, and only then loading it into a review or analysis application is a day in-house and outside counsel are flying blind, unable to look at key data to begin constructing case strategy, conduct informed interviews, negotiate with opposing counsel (e.g. on the scope of a matter, including discovery) or interact with regulators.  This is incredibly valuable time lost for no value received in return.
  • Using forensic tools for non-forensic processes is unnecessary overkill. The irony of this “image everything” approach is that it is extreme overkill: it would be like a doctor whose only procedure to get rid of a mole was to cut off the arm.  Forensic images can always be utilized on a one-off basis in narrow circumstances where there are concerns about possible spoliation of evidence, but for the vast majority of circumstances, a forensic image is completely unnecessary.

As was a focus at the recent CLOC conference in Las Vegas, corporate legal operations are quite correctly focused on showing the value legal is bringing to the business.  However, there is still a fundamental change they need to make to how they handle the collection of ESI for eDiscovery, GRC and privacy purposes that would be an enormous value-add to all parts of the company, including legal: ending the systematic over-collection of data.  How this can be done quickly and cost-effectively has been the subject of previous blog posts, but will be addressed in detail in the next few weeks as well.

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Filed under Best Practices, collection, compliance, Data Audit, eDiscovery, Enterprise eDiscovery, Uncategorized

GDPR Fines Issued for Failure to Essentially Perform Enterprise eDiscovery

By John Patzakis

The European General Data Protection Regulation (GDPR) came into full force in May 2018. Prior to that date, what I consistently heard from most of the compliance community was general fear and doubt about massive fines, with the solution being to re-purpose existing compliance templates and web-based dashboards. However, many organizations have learned the hard way that “paper programs” alone fall far short of the requirements under the GDPR. This is because the GDPR requires that an organization have absolute knowledge of where all EU personal data is stored across the enterprise, and be able to search for, identify and remove it when required.GDPR-stamp

Frequent readers of this blog may recall we banged the Subject Access Request drum prior to May 2018. We noted an operational enterprise search and eDiscovery was required to effectively comply with many of the core data discovery-focused requirements of GDPR. Under the GDPR, a European resident can request — potentially on a whim — that all data an enterprise holds on them be identified and also be removed. Organizations are required to establish a capability to respond to these Subject Access Requests (SARs). Forrester Research notes that “Data Discovery and classification are the foundation of GDPR compliance.” This is because, according to Forrester, GDPR effectively requires that an organization be able to identify and actually locate, with precision, personal data of EU data subjects across the organization.

Failure to respond to SARs has already led to fines and enforcement actions against several companies, including Google and the successor entity to Cambridge Analytica. This shows that many organizations are failing to understand the operational reality of GDPR compliance. This point is effectively articulated by a recent practice update from the law firm of DLA Piper on the GDPR, which states: “The scale of fines and risk of follow-on private claims under GDPR means that actual compliance is a must. GDPR is not a legal and compliance challenge – it is much broader than that, requiring organizations to completely transform the way that they collect, process, securely store, share and securely wipe personal data (emphasis added).”

These GDPR requirements can only be complied with through an effective enterprise eDiscovery search capability:

To achieve GDPR compliance, organizations must ensure that explicit policies and procedures are in place for handling personal information, and just as importantly, the ability to prove that those policies and procedures are being followed and operationally enforced. What has always been needed is gaining immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and returning results within minutes instead of days or weeks. The need for such an operational capability is further heightened by the urgency of GDPR compliance.

X1 Distributed GRC represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints and data servers from a central location.  Legal and compliance teams can easily perform unified complex searches across both unstructured content and metadata, obtaining statistical insight into the data in minutes, instead of days or weeks. With X1, organizations can also automatically migrate, collect, delete, or take other action on the data as a result of the search parameters.  Built on our award-winning and patented X1 Search technology, X1 Distributed GRC is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs while effectuating that all-too-elusive actual compliance with information governance programs, including GDPR.

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Why I Joined X1

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Two weeks ago I joined X1 as CEO, a company I am convinced is in the process of disrupting not just the eDiscovery industry, but the regulatory compliance and corporate governance markets as well.  As I discussed at length with the X1 team and board of directors during the interview process, I see in X1 a ton of similarities to Recommind circa 2007 (shortly after I joined), alongside several additional advantages we didn’t have at Recommind back then.  Does this guarantee greatness for years to come for X1?  Absolutely not.  But it gives us the opportunity to control our own destiny which is all a software startup can ask.  Here’s why.

  • X1’s team and culture are strong. I have learned the hard way how important culture is, how it can be instrumental in raising a collective effort to new heights or hold an otherwise successful company back from reaching its potential.  X1 is filled with people who have been here for 5, 7, 10 and even 14 years (here’s looking at you Alan!).  People here just want to win, to help make clients successful.  Our balance sheet and cap table are clean.  Revenue is growing nicely and we are cashflow positive.  Our investors, shareholders and board of directors have reasonable expectations about our plans and timelines (so far, anyway J).  X1ers are actually nice, which is a refreshing throwback coming from what has become a frequently cutthroat, arrogant culture amongst many of Silicon Valley’s largest tech companies and VC community.  We are building something special at X1, and if we execute well with a customer-centric focus at all times, everything else – accolades, continued revenue growth and profitability, financial gain – will take care of itself.

 

  • Making information actionable is really hard. When I worked at AccessData, a few VC friends of mine gave me grief for being at a company named after a problem that had already been solved.  “Accessing” information is indeed easy in most cases; however, making the right information “actionable” is an entirely different endeavor that is extremely difficult without X1 software.  What has changed over the last 10-15 years is the sheer volume and variety of information being created and therefore subject to litigation, regulatory scrutiny and corporate governance mandates.  Our industry-leading X1 Social Discovery product is proof of this, but the variety of today’s information doesn’t stop at social media: think of collaboration tools like Slack, Skype or Teams.  Simply put, people communicate in a far more varied way today than they used to, and making these varied data types available and actionable is hard.  I want to be at a company that is already addressing these challenges for our corporate, government, law enforcement and law firm clients, with ample runway to extend these capabilities, and X1 is exactly that.

 

  • The pressure on companies to find and act upon data is enormous. In the last 2 weeks we have done webinars on finding information on the Dark Web and California’s Consumer Privacy Act (CaCPA).  These topics weren’t on corporate radars – and in the latter case didn’t even exist – as recently as last year.  Add in GDPR, the growing impact of cybersecurity/breaches, migration of information to SaaS platforms and the cloud and the ever-present scrutiny of regulatory authorities globally and companies are struggling to make their information actionable as never before.  And this situation is unlikely to get any simpler or easier in the coming years, as the way we all communicate continues to evolve more quickly every year.

 

I have learned over my career (and life for that matter) that timing is a key part of life.  It’s rarely something we can control, but it has a huge impact on all of us.  X1 has a terrific opportunity to fill key customer needs at the exact time they need it, and has a team committed to customer success that genuinely cares.  I am extremely fortunate to be here at this time and can’t wait to see where we can take the company over the next 5 years and beyond.

– Craig Carpenter

Craig Carpenter 250 sq

 

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Filed under compliance, Data Audit, eDiscovery, Information Governance, Uncategorized

Data Discovery “Is the Foundation of GDPR Compliance”

Recently, I attended a very informative Microsoft GDPR Summit in Redmond, Washington. Microsoft invited their key compliance partners to brief them on Microsoft’s strong support for GDPR compliance within their Office 365 ecosystem, and to engage them in their strategy. The summit featured a slate of legal, compliance and technology experts who provided compelling insight into the GDPR, including challenges and opportunities for organizations as the May 25 enforcement date approaches.

Enza Iannopollo, a featured keynote speaker from Forrester, is an industry analyst with a deep focus on information security, data privacy and GDPR compliance. She noted that per a recent Forrester security survey, only about 30 percent of organizations report GDPR readiness. In her talks with major organizations, Iannopollo sees a strong if not belated commitment as they scramble to achieve readiness ahead of May 18. In terms of what it takes to effectuate GDPR compliance, Iannopollo presented a slide which simply stated the following: “Data Discovery and classification are the foundation of GDPR compliance.” Iannopollo said this is because the GDPR effectively requires that an organization be able to identify and actually locate, with precision, personal data of EU data subjects across the organization.

The speakers identified both a proactive and reactive requirement of data discovery under the GDPR. Iannopollo commented that a robust data discovery capability is needed to produce an intelligent data map, to classify and actually remediate non-compliant data. This data audit process should done at the outset, and also routinely executed on a recurring basis.

For reactive capabilities, Microsoft deputy general counsel John Payseno noted in a separate session that once GDPR enforcement comes online on May 25, 2018, organizations will be required to respond to data subject requests (DSRs) from individual, or groups of, EU data subjects. The DSRs under the GDPR consist of requests for data erasure, data transfer, or a confirmation that data permissively kept is done so in a minimal fashion without excessive duplication or re-purposing outside of the granted consent. Payseno said that companies must be able to document and demonstrate compliance with these DSRs, in a manner generally akin to responding to a subpoena or other legal requirement.

So a clear takeaway from the Microsoft summit is that GDPR compliance requires the ability to demonstrate and prove that personal data is being protected, requiring data audit and discovery capabilities that allow companies to efficiently produce the documentation and other information necessary to respond to regulators and EU private citizen’s requests. As such, any GDPR compliance programs are ultimately hollow without consistent, operational execution and enforcement.

While Microsoft demonstrated their capabilities to conduct effective data discovery in their O365 cloud environment, they openly acknowledge a significant gap for addressing on-premise unstructured data. Effective GDPR compliance requires the ability to gain immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and return results within minutes instead of weeks or months as is the case with traditional crawling tools.

X1 Distributed Discovery (X1DD) represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints and data servers for PII and other data from a central location.  Legal and compliance teams can easily perform unified complex searches across both unstructured content and metadata, obtaining statistical insight into the data in minutes, instead of days or weeks. With X1DD, organizations can also automatically migrate, collect, delete, or take other action on the data as a result of the search parameters.  Built on our award-winning and patented X1 Search technology, X1DD is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs while greatly mitigating risk and disruption to operations.

X1DD operates on-demand where your data currently resides — on desktops, laptops, servers, or even the Cloud — without disruption to business operations and without requiring extensive or complex hardware configurations. Beyond enterprise eDiscovery, GDPR and other information governance compliance functionality, X1DD includes the award-winning X1 Search, improving employee productivity while effectuating that all too illusive actual compliance with information governance programs, including GDPR.

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Filed under Best Practices, compliance, Corporations, Data Audit, GDPR, Hybrid Search, Information Governance, Uncategorized

GDPR Compliance Requires Effective Enterprise eDiscovery Search and Analysis Capabilities

The European General Data Protection Regulation (GDPR), which will be in full force in May 2018, promises to profoundly impact global organizations, requiring the overhaul of their data audit and information governance processes. The GDPR requires that an organization have absolute knowledge of where all EU personal data is stored across the enterprise, and be able to remove it when required.

GDPR-stampGDPR’s potentially significant penalties, which can be up to 4% of total global revenues or 20 million euro (whichever is greater), clearly have teeth and are intended to attain meaningful compliance.  However, The CXP Group, a leading IT research firm notes in an industry report that, “compliance with GDPR will only be legally (effectuated) if an organization is able to identify exactly where data is.”

Under the GDPR, a European resident can request — effectively on a whim — that all data an enterprise holds on them be identified and also be removed. Organizations will be required to establish a capability to respond to such requests. Actual demonstrated compliance will require the ability to search across all data sources in the enterprise for data, including distributed unstructured data located on desktops and file servers.

The GDPR specifies processes and capabilities organizations must have in place to ensure the personal data of EU residents is secure, accessible, and can be identified upon request. Its articles and principles set out several obligations organizations will need to address, including the points enumerated below. These requirements can only be complied with through an effective enterprise eDiscovery search capability:

  • Data minimization: Enterprises should only collect and retain as little personal data on EU subjects as possible. Corporate privacy attorneys advising clients on GDPR and EU privacy shield compliance, note that unauthorized “data stashes” maintained by employees on their distributed unstructured data sources is a key problem, requiring companies to search all endpoints to identify information including European phone numbers, European email address domains and other personal identifiable information.
  • Enforcement of Right to be forgotten: An individual’s personal data must be identified and deleted on request.
  • Effective incident response: If there is a compromise of personal data, an organization must have the ability to perform enterprise-wide data searches to determine and report on the extent of such breaches and resulting data compromise within seventy-two (72) hours.
  • Accountability: Log and provide audit trails for all personal data identification requests and remedial actions.
  • Enterprise-wide data audit: Identify the presence of personal data in all data locations and delete unneeded copies of personal data.

A mandatory aspect of GDPR compliance is the ability to demonstrate and prove that personal data is being protected, requiring information governance capabilities that allow companies to efficiently produce the documentation and other information necessary to respond to auditors’ requests. Many consultants and other advisors are helping companies establish GDPR compliance programs, and are documenting policies and procedures that are being put in place.

However, while policies, procedures and documentation are important, such GDPR compliance programs are ultimately hollow without consistent, operational execution and enforcement. CIOs and legal and compliance executives often aspire to implement information governance programs like defensible deletion and data audits to detect risks and remediate non-compliance. However, without an actual and scalable technology platform to effectuate these goals, those aspirations remain just that. For instance, recent IDG research suggests that approximately 70% of information stored by companies is “dark data” that is in the form of unstructured, distributed data that can pose significant legal and operational risks.

To achieve GDPR compliance and also EU data shield certification, organizations must ensure that explicit policies and procedures are in place for handling personal information, and just as importantly, the ability to prove that those policies and procedures are being followed and operationally enforced. What has always been needed is gaining immediate visibility into unstructured distributed data across the enterprise, through the ability to search and report across several thousand endpoints and other unstructured data sources, and return results within minutes instead of days or weeks. The need for such an operational capability is further heighted by the urgency of GDPR compliance.

X1 Distributed Discovery (X1DD) represents a unique approach, by enabling enterprises to quickly and easily search across multiple distributed endpoints and data servers from a central location.  Legal and compliance teams can easily perform unified complex searches across both unstructured content and metadata, obtaining statistical insight into the data in minutes, instead of days or weeks. With X1DD, organizations can also automatically migrate, collect, delete, or take other action on the data as a result of the search parameters.  Built on our award-winning and patented X1 Search technology, X1DD is the first product to offer true and massively scalable distributed searching that is executed in its entirety on the end-node computers for data audits across an organization. This game-changing capability vastly reduces costs while greatly mitigating risk and disruption to operations.

X1DD operates on-demand where your data currently resides — on desktops, laptops, servers, or even the Cloud — without disruption to business operations and without requiring extensive or complex hardware configurations. Beyond enterprise eDiscovery, GDPR and other information governance compliance functionality, X1DD includes the award-winning X1 Search, improving employee productivity while effectuating that all too illusive actual compliance with information governance programs, including GDPR.

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