By managing all steps from your contract management tracking and lifecycle management, you will take clear action to minimize the legal liability cost of electronically stored information.
In December 1, 2006 the Federal Rules of Civil Procedure (FRCP) was revised to address e-discovery issues. Under this civil procedure, ESI was added as a new category of evidence in court. The limitation on ESI states that a party doesn’t need to produce this type of documentation if it is either unreasonably accessible or exceedingly costly. However, the key rule from the FRCP that allows business to minimize the legal liability cost of ESI is FRCP Rule 37. This rule provides an exception when electronic evidence is eliminated as a matter of regular business processes through an established document retention plan. In this article we will discuss how to minimize the legal liability cost of ESI through the use of contract management system.
Definition of ESI
Electronic stored information includes all digital elements such as email, digital files (e.g. Word, PDF, etc.), digital images (e.g. JPEG), voicemail and SMS. Generally, 1 GB is about 75,000 printed pages. The average email inbox of one person contains about 2GBs of data or 60 bankers boxes of documents.
High Cost of ESI
ESI is not only expensive to produce but also to review during legal process. The approximate cost of printing 75,000 pages of electronic documents is estimated to be around $15,750. The lowest cost of copying and burning data onto DVD at mid-range attorney review cost is $0.50 per DVD. As an example, on July 2011 the lawyers at Jenner & Block, which represented the Entertainment Software Association against the State of California, asked California to reimburse its legal costs after winning. The tab included 50 rushed copies for a cost of $1,754.50 and 75 non-rushed copies for a cost of $1,520.50. Therefore, it is essential that you adhere to a document retention policy, which allows you to minimize unnecessary ESI.
Minimize Financial and Legal Risk
Given the high costs of ESI both inside and outside the court room, it is not a surprise that companies are looking for solutions. A May 2007 study from the Aberdeen Group found that nearly 65% of enterprises report that contract lifecycle management has improved exposure to financial and legal risk. A key step in this process is to select a contract management system that meets the needs of your company. On the one hand, you contract management system must allow you to keep inactive files for legal, financial and historical purposes in an accessible format that is cost efficient. This can be achieved through Software-as-a-Service (SaaS). On the other hand, your contract management system must maintain a transparent atmosphere on which clear accountability prevents deviation outside tolerable ranges of risk.
A digital contract management system allows your company to have a detailed, well conceived record management policy that will be followed by everybody in your firm. By managing all steps from your contract management tracking and lifecycle management, you will take clear action to minimize the legal liability cost of ESI .