'Electronic discovery' industry blooming

Some think software providers and tech-services giants will step in and begin baking electronic discovery capabilities into other data-retention products.  For example, storage systems can include "litigation hold" functions that let a company instantly preserve certain records if necessary.

"The ultimate buyers of a company like ours have only just begin to emerge in our space," said Massey at Fios.  "The names we'll associate with the services we provide in three, four, five years from now will be like IBM and EMC and Oracle."

Electronic discovery comes in a variety of forms, offering a wide window into the digital trails businesses leave these days. Some examples:

• In the Enron Corp. fraud case, e-discovery loosened a flood of company e-mails.  At least two document-management companies, InBoxer Inc. and MetaLINCS Corp., are offering free tools that let the public sift through hundreds of thousands of Enron e-mails — some telling, some totally meaningless — that were gathered by the Federal Energy Regulatory Commission.
• A Fortune 100 company that was acquiring a rival got an 18-page request from the Federal Trade Commission for information about the deal.  The company believed the data lay with 265 employees in 11 sites around the world, in a variety of software and computing applications.  Within two weeks, Kroll Ontrack gathered 11.5 million pages of documents, then narrowed them to 4.3 million for the government, with some files coded as confidential to the business.  Kroll Ontrack said it could not name the companies involved.
• A man filed a $25 million lawsuit against a venture capital firm, alleging breach of contract.  He submitted an e-mail that appeared to back his case.  But an expert from the outside forensic firm Electronic Evidence Discovery determined that the man had taken the header from a legitimate message and added his own fake text underneath.  The lawsuit evaporated.  The man was hit with federal fraud charges, but those were dismissed after his lawyers argued that a third party doctored the e-mail.
• Federal investigators probing accounting questions at Computer Associates International Inc. had subpoenaed certain documents. CA executives said the files didn't exist.  A breakthrough came when an outside lawyer for CA's board led a search of hundreds of employees' computers for incriminating e-mails.  The e-mails had been overwritten, but a forensic team from PricewaterhouseCoopers found them with a disk-imaging technique that can reveal both active and deleted files.  Eventually, the software company admitted the fraud and fired nearly all its top brass.

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