All it takes is one: one off-color joke sent from a company e-mail account or one hotheaded e-mail transmitted without a thought about how it could later be used to devastate the company’s side of a legal case, even if the e-mail or its author is entirely unrelated to the subject of the litigation. In the ever-expanding world of electronic documents and communication, businesses need to take proactive steps to prevent the creation of damaging documents, and they have to be prepared in the event litigation does arise by implementing an e-data management system before litigation.

Advanced information technology has drastically increased the scope of what is now discoverable, and mutual requests for production of electronically stored information are prevalent in today’s litigation. E-mail is an especially valuable source of evidence in litigation, because frequently employees are less mindful in such exchanges than in written memos and letters. People today tend to send an e-mail rather than pick up the phone, thus documenting precisely when a correspondence occurred and what was said.

Beyond that, electronically stored information can be searched more easily, and it is extremely difficult, if not impossible, to destroy. In today’s world, cases can be won and lost based on incriminating e-mails, images, calendar files, databases, spreadsheets, audio files, voice mail, FTP sites, PDAs, smart phones and memory cards.

There are simple ways that busi nesses can avoid these problems and minimize the risks related to e-discovery.

LOCKSHIN

First, don’t e-mail “inside jokes.” They can be misinterpreted or offensive, especially if they are about the people with whom you deal. If you or any of your colleagues have inside jokes, lingo or nicknames for clients, advisers or even opposing parties, do not use them in e-mails or any written communication that could potentially be produced in the event of litigation.

Second, use e-mail appropriately. Separate work and personal e-mail accounts because sending or receiving inappropriate e-mails on the company account can allow the other side to argue that the company fosters an uncouth, unprofessional or unfocused culture.

Third, don’t e-mail when angry. If you are upset about something that occurred on the job, do not e-mail about it until you cool off.

Fourth, don’t e-mail potential ammunition. Be mindful of the words used in e-mails and make every effort not to use language which later can be used against you or your company by an adverse party.

Finally, get advice. Consult counsel before creating any electronic document that could potentially lead to trouble.

McMICHAEL

In addition to the pitfalls discussed above, companies can land themselves in trouble by failing to implement—and follow—an effective record-retention policy. Failure to preserve and produce electronically stored information during the discovery process can spark major trouble in the form of costly sanctions and/or adverse inferences which often destroy credibility at trial. For example, once a party reasonably anticipates litigation, the party has a duty to preserve information relevant to that litigation, which is typically accomplished through a “litigation hold.” A litigation hold suspends a company’s current document retention/destruction policies and informs key persons of their obligation to preserve relevant information.

In order to guard against damaging and expensive sanctions, a company should put in place a litigation hold. The company also should make sure its counsel is familiar with the firm’s document and information retention policies and data-retention architecture and communicates with the “key” players about document and information storage. Both counsel and the firm should monitor compliance with the litigation hold.

E-discovery is a rapidly developing area of law. Accordingly, businesses need to be aware of the potential pitfalls of seemingly harmless e-mail habits and understand and implement the elements of an effective e-data management plan. These strategies can help avoid expensive and credibility-killing sanctions in litigation.

James D. McMichael and Alexis M. Lockshin are attorneys with Shapiro, Lifschitz & Schram P.C., Washington, D.C. They can be reached at mcmichael@slslaw.com and lockshin@slslaw.com, respectively.