IT crapshoot: cost-cutting is costly in disaster recovery, archiving for e-discovery

Disaster recovery and archiving are key zones of interaction for IT and Legal Departments. When a lawsuit is filed and an e-discovery production request is received, a company must examine all of its electronically stored information to find documents that are relevant to that lawsuit. Court battles may arise regarding the comprehensiveness of the examination, the need to lock down potentially important documents and metadata, and the cost of identifying, collecting, preserving, and reviewing documents — all of which are related to the way in which data is stored.

Photo credit: Josie Hill

Photo credit: Josie Hill

With this in mind, I recently sought out Jishnu Mitra, President of Stratogent, a specialized application hosting and disaster recovery services provider, to obtain his perspective on disaster recovery best practices and the relationship between disaster recovery and e-discovery. Key points he made include:

  • effective disaster recovery sites are “hot” sites that can be used for secondary purposes rather than remaining idle;
  • “cold” sites are unlikely to get the job done and are not cheap;
  • efforts to keep IT budgets down by delaying or limiting disaster recovery, or by limiting archiving, can backfire;
  • budget-conscious IT departments are more likely to use archiving features built-in to their software of choice;
  • many IT and Legal personnel have a habit of being disrespectful towards one another and doing a poor job of communicating with one another;
  • more crossover Legal-IT people are needed.

Bruce: Can you provide a little background about Stratogent’s domain expertise?

Jishnu: We offer end-to-end application hosting services, including establishing the hosting requirements and architecture, hardware and software implementation, and proactive day-to-day application management including responding to any issues that arise. Most of the time we are tasked with building a full data center, not the building itself, of course, but a complete software and hardware hosting framework. We aren’t providers of any specific business application (like salesforce.com does). We design, deploy and operate all the layers on which modern business applications are hosted including the application’s framework e.g. .NET, Java or SAP Basis.

Our customers include multi-office companies, who require applications shared between offices, and web-based application SaaS (“software as a service”) companies. The scope is typically quite complex – we don’t build or manage general web sites or blogs — that’s a commodity market and too crowded. We build and manage custom application infrastructures for enterprises or for complex applications that require a range of IT skills to manage. Our customers hire us because they don’t want to budget to hire all of the people they would need to do this internally, or when they are deploying a new application that is beyond the current reach of their IT team. For example, if a company wants to start using a new-to-them ERP [“Enterprise Resource Planning”] application like SAP or (say) a Microsoft based enterprise landscape that needs to scale, we can multiplex our internal pool of talent to give their application 24-7 attention far cheaper than the company can hire and retain the specialized employees they need to do it themselves.

Bruce: So you supply the specialized competencies needed to build and operate complex application environments so that your customers can focus on their core competencies? Then their core competencies don’t need to include what you do in order for them to succeed.

Jishnu: Yes. They know what they want, they conceptualize what they want, but not the hardware they need and the infrastructure software. We can go in from the very beginning saying, “Here’s how you set up a highly available, clustered server farm for your social networking app,” and so on and so forth. We know how to customize it and set it up. They also don’t have our expertise in negotiating with hardware vendors, or in capacity planning, etc. Plus there’s the build phase, loading OSes, etc. We essentially give them over the course of our engagement the entire hosting framework on which the app runs and then take care of it for the long run.

Once we get their hosting framework to a steady state, they get to run with it for two, five or longer number of years with no or limited failure. So their role is conceptualizing on day 1 and then we become a partner organization worrying about how to realize that dream, handling inevitable IT break-fix issues and managing changes over the entire life span of that system. Disaster recovery usually becomes part of that framework at some point.

Bruce: Can you give me some broad idea of the scope of disaster recovery work that you do?

Jishnu: Disaster recovery is not a separate arm of our business. It’s very integral to the hosting services we provide. We build disaster recovery sites at different levels of complexity. It can go from a small customer up to a really large customer. And over time Stratogent gets into innovative approaches to deal with disaster recovery. The philosophy of Stratogent is that we’re not trying to sell a boxed solution to all the customers. It’s more of a custom solution, not a mass market product. We say we will architect and host your solution – and as architect we always add very specific elements for our customer, not just one solution for everyone.

The basic approach, even for small customers, is to choose a convenient and correct location for the disaster recovery site and use a replication strategy based on whatever they can afford or have tolerance to accept. As much as possible a disaster recovery site should be up and running and ready to go at a flip of the switch. They can use the excess capacity at their disaster recovery site at quarter end to run financial reports or for other business purposes, plus it can be used for application QA and staging systems. They can be smart about it, and keep it on, so that they can have confidence in it.

Of course a disaster recovery solution like this can’t be built in just a month or two – to do it right requires creativity and diligence. In one recent instance when asked to do it ”right now”, we had to go with a large vendor’s standard disaster recovery solution for our customer. Everyone knows that this does not get us anything beyond the checkmark for DR, so the plan is to go to a Stratogent solution over time, build a hot alternate site on the East coast, and sunset the large vendor’s standard disaster recovery arrangement.

Bruce: Given the importance of disaster recovery for a number of reasons, how seriously are companies taking it?

Jishnu: Everybody needs it, but it suffers from “high priority, low criticality”, and the problem rolls from budget year to budget year. Some unpleasant trigger like an outage, or an impending audit instigates furious activity in this direction, but then it goes on to the back burner again. In the recent instance, although disaster recovery was scheduled for a later phase for technical reasons, for SOX compliance the auditor demanded a disaster recovery solution by year end or our customer would fail their audit. So we went out and obtained a large vendor’s standard disaster recovery solution, which met the auditors’ requirements but isn’t comparable to a “hot” disaster recovery site.

The way disaster recovery solutions from some of the large vendors work is this: they have huge data centers where their customers can use equipment should a disaster happen. Customers pay a monthly fee for this privilege. When a disaster strikes, customers ship their backup tapes out there, fly their people out there, and start building a disaster recovery system from scratch. And by the way, if you have trouble here’s the menu for emergency support services for which they will charge you more. And in 95 out of 100 cases it just doesn’t work, but is a monumental failure when you need it most. These are “cold” sites that have to be built from the ground up. It takes maybe 72 hours to get them up, rather to be asserted as “up”. Then, as someone like yourself with application development experience knows, it takes weeks to debug and get everything working correctly. And when you’re not actually using them, standard disaster recovery services are charging you an incredibly high amount of money for nothing except the option of bringing your people and tapes to their center, and then good luck.

Bruce: You mentioned running quarterly financials, QA, and staging as valuable uses for the excess capacity of “hot” disaster recovery sites. Could this excess capacity also be used for running e-discovery processes when the company is responding to a document production request?

Jishnu: Possibly, but I haven’t seen it done yet in a comprehensive manner. The problem is you still need to have the storage capacity for e-discovery somewhere. The e-discovery stuff is a significant chunk of storage, maybe tier 2 or 3, which demands different storage anyway, so it makes sense to keep the e-discovery data in the primary data center because its easy and faster to copy, etc. That said, it is very useful to employ the capacity available in the secondary site for e-discovery support activities like restoring data to an alternate instance of your application and for running large queries without affecting the live production systems.

Bruce: Do you deploy disaster recovery solutions that protect desktop drive, laptop drive, or shared drive data?

Jishnu: As I have said, our disaster recovery solutions are part of whatever application frameworks we are hosting. We as a company don’t get into the desktop environment, the local LANs that the companies have. We leave that to local teams or whatever partner does classic managed services. We do data centers and hosted frameworks. We don’t have the expertise or organizational structure to have people traveling to local sites, answering desktop-related user queries, etc. But any time it leaves our customer’s office and goes to the internet, from the edge of the office on out it’s ours.

Bruce: But when archiving is part of the customer’s platform hosted by you, it gets incorporated in your disaster recovery solution?

Jishnu: Yes.

Bruce: Is Stratogent involved when your customers must respond to e-discovery and regulatory compliance information retrieval requests?

Jishnu: Yes. For example, we recently went through and did what needed be done when a particular customer asked for all the documents in response to a lawsuit. We brought in a consultant for that specific archiving system as well. Our administrators collaborated with the consultant and 2 people from the customer’s IT department. It took a couple of weeks to provide all the documents they asked for.

Bruce: Was the system designed from the outset with minimizing e-discovery costs in mind?

Jishnu: Unfortunately no. In this case archiving for e-discovery was an afterthought and was grafted on to the application later and a push-button experience wasn’t in the criteria when designing this particular system. But it woke us up. We realized this could get worse.

Bruce: So how do you do it differently now that you’ve had this experience?

Jishnu: Here we recommended to our customer that we upgrade to the newest version of the archiving solution and begin using untapped features that allow for a more push-button approach. Keep in mind that e-discovery products weren’t as popular or sophisticated as you see them now.

Bruce: Aren’t there third-party archiving solutions also?

Jishnu: There are several third-party products and you see the regular enterprise software vendors coming out with add-ons. We’re especially looking forward to the next version of Exchange from Microsoft, where for us the salient feature is archiving and retention. Only because email is the number one retrieval request. On most existing setups getting the information for a lawsuit or another purpose takes us through an antiquated process of restoring mail boxes from tape and loads of manual labor. It’s pretty painful, it takes an inordinate amount of time to find specific emails, its not online, it takes days. For this reason we’re looking forward to Exchange 2010 which has features built INTO the product itself. Yes, some other vendors have add-on products that do this also.

Bruce: And I assume you’re familiar with Mimosa, in the case of Exchange?

Jishnu: – Like Mimosa, yes. But when it’s built-in the customer is more likely to use it. By default customers don’t buy add-ons for budgetary reasons. It’s so much easier if the central product has what we need, and that is in fact happening a lot these days. I won’t be surprised if products in general evolve so that compliance and regulatory features get considered integral parts of the software and not someone else’s problem.

Bruce: Do you have other examples of document retrieval from backups or archives?

Jishnu: Actually there are three scenarios where we do document retrieval. Scenario one, which we discussed, is e-discovery. Scenario 2 is when we have seen retrieval requests in acquisitions, mergers and acquisitions, and we had to pretty much get information from all sorts of systems, a huge pain.

Scenario 3 is SaaS driven. For many of our customers, the bulk of their systems are either on-premises or hosted by Stratogent, but some of our customers use SalesForce.com or one of many, many small or industry specific SaaS vertical solutions. In one recent case, one of these niche vertical SaaS vendors, because of some of the issues in that industry, was about to go out of business. We had to go into emergency mode and create an on-premise mirror, actually more like a graveyard for the data, to keep it for the future, to enable us to fetch the data from that service. We figured out a solution for how to get all the customers’ data and replicate and keep it in our data center and continuously keep it up to date. Fortunately the vendors were cooperative and allowed access through their back door to allow us to achieve this. I call this “the SaaS fallback” scenario. SaaS is a great way to quickly get started on a new application, but BOY, if anything happens, or if you decide you aren’t happy, it becomes a data migration nightmare and worse than an on-premises solution because you have no idea how it’s being kept and have to figure out how to retrieve it through an API or some other means.

Bruce: In e-discovery and other legal-driven document recovery scenarios, how important is collaboration between IT and Legal personnel, or should I say, how significant a problem is the lack of this collaboration?

Jishnu: I’ve seen the divide between IT and legal quite often. Calling it a divide is actually being polite; at worst both parties seem to think the others are clueless or morons. It’s a huge, huge gap. And I have also seen it playing out not just in traditional IT outfits, but also product based companies when I was principal architect at Borland. When attorneys came to talk to engineering about IP issues, open source contracts or even patent issues, there was no realization among the techies that it was important. In fact legal issues were labeled “blockers” and the entire legal department was “the business prevention department”. And there is exactly the opposite feeling in the other camp with how engineering leaders don’t “get it” and how talking to anybody in development or IT was like talking to a wall. The psychological and cultural issues between IT and legal have been there for a while. In some of the companies that have surmounted this issue, the key seems to be having a bridge person or team acting as an interpreter to communicate and keep both sides sane. Some technical folks I know have moved on to play a distinctly legal role in their organizations and they play a pivotal role in closing the gap between legal and IT.

Desktop, laptop, email backups critical for employee lawsuits

I recently spoke with Thao Tiedt, a labor and employment partner at Ryan Swanson & Cleveland, PLLC, a mid-sized full service Seattle law firm. (Full disclosure: I’ve benefited from her incisive advice a number of times when I was wearing the hat of corporate counsel.) Our conversation focused on eDiscovery from the perspective of consequences when individual employees use company computers in ways not approved by their employer.

Bruce: Thao, I first asked you this question some years ago, but I’ll ask again so you can catch me up and share this information with a wider audience. When employees of a company use a company computer, even for personal purposes, who does the information belong to after it winds up on the company’s computer?

From an IT perspective, preparing to defend against employee lawsuits starts long before "there is even a smell of dispute in the air."
From an IT perspective, preparing to defend against employee lawsuits starts long before "there is even a smell of dispute in the air."

Thao: In other words, do employees have an expectation of privacy? Yes and no. In the workplace the employer has the right to take that expectation away through a variety of policies and practices. This includes email and voice mail. With telephone conversations, an employer can’t listen without permission of both the employees and others on the line. States’ laws vary; some states require that at least one person on the conversation has to give you permission to record it. But permission can be obtained through fair warning – you don’t have to get explicit permission, it can be tacit, as when a message is played announcing that a conversation may be recorded – when someone hears that and doesn’t hang up permission is implicit. Employees may be given a policy manual or an explicit waiver to sign that states that privacy is waived. If an employee refuses to sign, they can’t stay employed.

Bruce: What happens when employees try to remove information from a company computer?

Thao: People think they’re smart and they can make information go away. Here’s a good example: one of my clients is a company that received a demand for arbitration over alleged sexual harassment. So I had the company put a hold on all of the computers involved, including both the employee’s and the accused manager’s – in their cases by physically picking the computers up. Upon technical evaluation it appeared that the claimant had been wiping hers. But she failed to realize that the company had backup tapes for disaster recovery purposes. Also, this particular company has multiple branches so it has central email servers. And after interviewing co-workers, a hint of impropriety appeared. I asked a one of claimant’s co-workers “anything else we should know?” The co-worker showed me a cellphone picture sent by the claimant, showing the claimant nude from waist up, with the caption “does this change your mind?” Apparently she had wanted the co-worker to date her and he had refused. When we looked at the company email accounts we found lots of these pictures, which we could tell from the background were taken in the company bathroom. It turns out she had been spending a lot of time on dating sites while at work and sending multiple men the pictures.

Later we learned that someone had asked her: don’t you think you should be careful? She had answered no, someone in IT told me how to double-delete computer files.

After all of this information came out in the open her cause of action went away. Given her behavior it was clear that if her accused manager had in fact asked her to expose herself, as she claimed, she would have gladly done so.

This just goes to show: no one should think they can make digital information go away.

There are huge number of cases where the smoking guns are emails. Somehow people don’t think of emails as documents, they think of them as chit-chat. Far from it. For example, when training attorneys in our firm we teach them that emails are no different from formal letters sent to clients and should be handled with the same care.

Bruce: What about accessing web sites using work computers?

Thao: Of course web use can get traced back to inappropriate sites, like pornography severs for example. I actually had to go home to view a site that had been accessed by an employee on one occassion, because our firm’s own web filters are set so high I couldn’t do it from work. For a while I couldn’t order my own underwear online from work.

Anyway, it turned out this person was running a business on work time– the business of being web master for a porn site.

However, as a general rule an employee can conduct their own business on their lunch hour, as long as that isn’t a conflict with their employer in some fashion.

Bruce: I’ve read about studies that suggest employee productivity actually goes up when they can do a certain amount of personal work – scheduling doctors appointments and what not, from their work computer during work hours – because that flexibility leads to less tardiness and absenteeism and so forth. So how does an employer who believes this is true handle personal use of work computers?

Thao: Here’s what we say in our own [Ryan Swanson & Cleveland] employee manual: employees’ may make limited, incidental, responsible personal use of company computers.

Having said that, an employer can still intercept and log employee use of company computers. In the harassment case I mentioned, for example, we examined how both parties had used their computers. The accused manager was very uncomfortable with having attorneys review his work materials, but we needed to see his responses to her emails to make the company’s case. What we found didn’t support her case, but did lead us to caution him to stop unrelated inappropriate use of his work computer.

Bruce: What about when employees use their personal email account, like Gmail, from a work computer?

Thao: Does accessing email on company computer waive privacy protection? Yes. There is no expectation of privacy for personal email stored on company computer.

Bruce: How about a password for a personal email account, once it has been typed into a company computer?

Thao: Yes, if it’s on the work computer then it’s information that belongs to the employer.

Bruce: But can the employer use that information? What if they use the password to access an employee’s personal email account, like an AOL or Gmail account?

Thao: No. The employer can possess the password if it’s on the company’s computer, but they can’t use it to log into the personal email account.

Bruce: What about Google Gears, which makes local copies of personal email and Google documents on the computer being used, which might be a work computer?

Thao: Then the company has a right to see that information. Anything on the company computer is the company’s – if the company policy reads that way.

California sometimes has different views concerning privacy – they have a state constitutional right to privacy. But as long as companies have been up front with employees by notifying them that if information goes through a work computer, that information can be accessed by the company, then employer access to that information is allowed in California as well.

Bruce: When a lawsuit is threatened you send out a scary letter to employees telling them to avoid destroying evidence?

Thao: We send out a “scary letter” right away [to leave no doubt what is expected of people].

It can be the case that having electronically stored information collected by an outside vendor creates insulation against tampering and a better evidentiary chain of custody, even with intellectual property secrecy issues. Outside vendors can make good selections about what fits an eDiscovery inquiry.

What you don’t want is for opposing counsel to see something secret [and not responsive to a discovery request] that may be useful to their client in some way. If that happens it creates a question for that attorney about what their duty is to their client – to reveal or not to reveal that information – and then there’s the fact that you can’t get it out of your head once you’ve seen it. It will absolutely color your strategy down the road.

Also, concerning attorney-client privilege: privilege is waived whenever a privileged email is copied to anyone outside of “speaking agents of the company.” This happens all the time, even when recipients of privileged emails are warned. Forwarding emails is a hard habit to break.

Bruce: Symantec recently commissioned a study which revealed that a very high percentage of laid-off employees copy company information and take it with them when they go. What, if any, recourse does a company have when employees leave with info?

Thao: Here’s an example. One of my clients is a regional auto dealer association. A common problem they have is that new vehicle salespersons typically view the customers they sell to as “my customers” who they can “keep” after they move to a different dealership. Wrong – they are the dealer’s customers, not the salesperson’s. In addition, customer information is considered private under federal law. If someone captures that information but not because of a business transaction, for some other purpose, it violates Federal privacy law.

Bruce: What remedies are available to an employer in this situation? What can an auto dealer do if a new vehicle salesperson takes a customer list with them?

Thao: The dealer can file for an injunction telling a dealer not to use information that came from other dealers. When dealers do receive such information it won’t be profitable because an injunction is very expensive for them to defend as well as scary and distracting.

And if the company whose information was taken can prove actual damages, then they can receive money damages from the new employer for tortious interference with private information. For example, I had a case where a person thought they were going to be terminated, so they copied specifications for a technical piece of equipment and emailed to themselves. Then they changed information in the company computers regarding that equipment, which was very expensive for that company to correct. A new employer could be held liable for damages by accepting that information from the former employee.

Bruce: What about non-competition agreements – do those work?

Thao: A non-compete protects employer information that’s already in an employee’s head. It’s limited but it works. For example, it can say a vehicle sales employee can’t work in a dealership selling the same type of car in the same county, but usually can’t keep someone from completely working in the car business, or for any company within that county. It works as long as you don’t prevent the employee from working anywhere in the same business.

Bruce: Did you read about the Motorola ex-CFO who quit, apparently under some kind of cloud, then returned his company laptop with files wiped? He then accused the company of retaliation, so the company accused him of spoliation. What can an employer do in this situation? Can the court award sanctions against an ex-employee for destroying evidence?

Thao: Yes, most people don’t understand that computer files must be preserved whenever there is even a smell of dispute in the air. Might the court award money sanctions? Possibly. Or, in some extremely serious situations the judge can order that the offending party can’t defend itself; or that a party can’t pursue it’s lawsuit – case dismissed. It’s a form of inconsistent pleading – a claimant can’t resist providing information and pursue a remedy simultaneously.

Bruce: From what you have said today it sounds like data backups of one sort or another are a critical element for eDiscovery, at least in your practice.

Thao: Disaster recovery backups just make sense as a litigation backup data source when dealing with employees. But you need historical backups that are locked down so that they can’t be erased for a period of time during which they might be needed.

Archiving is another thing you can do. For example, the Puget Sound Automobile Dealers Association maintains an electronic archive of participating dealers’ employee policy manuals over the years which can be used as evidence in an employee dispute.

Bruce: Which brings us to a final thought. There’s a lot of company data — confidential customer data — in the hands of non-attorneys who don’t have the same paranoia about casually exposing it that attorneys like you and I do….

Thao: Yes, you have to have confidence in IT people that they won’t be trolling confidential information, that they will keep it confidential.

When employees leave, company information leaves with them

A good topic for a future blog post will be a review of the technology that might prevent this from happening: a recent study revealed

“Of about 950 people who said they had lost or left their jobs during the last 12 months, nearly 60 percent admitted to taking confidential company information with them, including customer contact lists and other data that could potentially end up in the hands of a competitor for the employee’s next job stint.

….

“Most of the data takers (53 percent) said they downloaded the information onto a CD or DVD, while 42 percent put it on a USB drive and 38 percent sent it as attachments via e-mail….”

Black CD compact disc and black removable USB driveSymantec, who commissioned this study (and which through a string of acquisitions has become a major vendor in the information management realm), just happens to be one of a number of software vendors who provide DLP (“data loss/leak prevention/protection”) solutions that can inhibit this sort of thing.

Meanwhile, over at RIM, the makers of the BlackBerry, the CEO isn’t shy about admitting that they record ALL company calls on the theory that everything employees say on the job is the company’s intellectual property.

I’m not an advocate for “big brother” work environments because I think there can be a strong relationship between genuine trust and employee productivity and creativity. Nonetheless, I have to admit that employees who are convinced that they will be held accountable for what they do with company information will be more conscientious about how they handle it.

Yet another topic for a future post will be examining how important information is misplaced when employees shift to new projects, positions, or companies.