How to Keep the Cloud From Bursting in Litigation

For companies turning to the internet for online business services, it is becoming increasingly important to manage electronically stored information. In this economic climate, large and small businesses alike are moving to the internet for services previously provided in-house in an effort to streamline internal technology operations and reduce labor costs. Online business services, commonly referred to as "cloud computing," promise significant cost reductions, potentially saving a company as much as 50 percent in information technology labor expenses.

However, cloud computing is not without its downside. It adds complexity and risk to a company's ability to monitor data that it maintains with third parties. That risk is significantly enhanced when a business faces litigation. In-house and outside counsel, charged with fulfilling discovery obligations under the Federal Rules of Civil Procedure, face particular challenges because they have a duty to stay on top of electronic information that has made its way onto the "cloud."

Under the Federal Rules and case law, counsel have an obligation to become sufficiently familiar with their client's ESI to comply with discovery duties to identify, preserve, and produce relevant information. Cloud computing poses three basic challenges. The first is to become fully familiar with the information transmitted to cloud-based service companies and the manner in which it is stored. The second is to understand the kind of access and control the company has to that information. The third challenge is to understand the cloud vendor's data-retention and destruction practices and policies, as well as backup procedures.

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Source: law.com
By: Fernando A. Bohorquez Jr. and Alberto Rodriguez