Fifteen years ago virtually all of your business records were stored on paper or, if you could afford it, on computer tapes. Periodically you'd purge your files, creating more room for newly generated paper. Now it's more expensive to store paper than it is to store electronic data. And now you are generating more data than you ever thought possible. You have your business records and accounts; special computer programs for such applications as personnel records and benefits, sales, customer contacts; e-mail; and voice mail and cell phone records. It used to be you had these records on a computer. Now you have them on multiple computers and a server. Maybe you even have an off-site disaster recovery or backup system. Your information and electronic data is duplicated and seemingly everywhere. All of this information could be the subject of discovery requests if a claim is made against you.

The rules governing discovery of this information in Federal lawsuits have recently been changed. The last time they had been updated I-Pods, cell phones, voice mail and e­mail were just dreams of Bill Gates, Steve Jobs and their peers. Now we deal with an inconceivable volume of data. Think about that one e-mail that is sent to all of your employees or customers; that letter or e-mail that you've re­written 3 times before hitting the 'send' button, or the multiple drafts of your budget or employee handbook. Probably 95% of all the information your business generates these days is electronically generated or stored.

There are traps for the unwary. The rules and recent cases penalize businesses for not preserving electronically stored information. From the moment you have some idea that a claim will be made against you, you might have to take steps to stop any automatic deletion, archiving or destruction of electronically stored information. This requirement applies to you and through you to any third party vendor that performs any of your electronic data systems work.

Over the next issues of our newsletter we will elaborate on these changes and what it could mean for your business, and will be suggesting ways to protect yourself. Watch for a future Lunch and Learn on this topic as well.

This Newsletter is designed to provide information of a general nature only and is not intended to replace or provide professional legal advice.