With recent surveys showing that e-mail messages can make up 75 percent of an organization's communications, it's a sobering thought that those communication strings may end up as Exhibit A in a winning case against a business.

But e-mail and other electronic forms of communication can contain a host of data about an organization's activities and operations, its business decisions, and even its political and legal issues—in effect, a “truth serum” for businesses.

So it's no wonder that parties in litigation fight hard to obtain their opponent's e-mails and other “electronic discovery” (from flash-message traffic to hidden meta-data attached to internally generated documents).

In the old days, a company in litigation needed only to look through its paper files to see if it had any documents relevant to a dispute. Today parties must think multi-dimensionally about “documents,” especially in light of recent changes to the Federal Rules of Civil Procedure, which govern all phases of litigation in federal courts. These changes evolved as more and more requests have been made for electronic information by parties in litigation (even before a suit is filed), and courts have imposed increasingly severe sanctions on parties who have destroyed (even inadvertently), or failed to take reasonable steps, to preserve electronic information.

Parties have been ordered to pay attorney's fees, barred from presenting evidence favorable to their case, and subjected to the highly prejudicial “adverse inference jury instruction.” That allows an opponent to argue, and a jury to infer, that the failure to produce electronic evidence means that evidence would have favored the opponent and harmed the non-producing party, and usually spells disaster in terms of a jury's verdict.

Under the new rules, which took effect Dec. 1, 2006, parties in litigation must take several new steps relating to electronic discovery, including deciding how they are going to produce electronic evidence. While this may seem innocuous, it can be a difficult, time-consuming and expensive process—and cases have been won and lost based on the production or loss of important electronic communications.

In light of the changes, many organizations have instituted (or are considering) internal changes. Here are some steps your organization may wish to implement if you're expecting a lawsuit or are already involved in one:

• Develop routine data deletion procedures to include regularly scheduled and systematic deletion of data, without disrupting the operational needs of the business. The procedures should include a mechanism called a “litigation hold”—the ability to keep data that is or might be subject to litigation.

• Implement search procedures that allow for the rapid identification and search of the potential sources of all types of electronically stored information. The procedures should determine how burdensome and costly it is to search these sources, flag and hold relevant information, and produce it in a format reasonably usable by an opponent in litigation.

• Take reasonable steps to preserve electronic information until a case is over, including, for example, discontinuing data destruction, implementing changes so that relevant information is not “written over,” andsuspending back–up tape recycling policies.

• Scrutinize the most important information first to demonstrate good faith and identify relevant information. Because of the nature of sanctions imposed by courts against business that failed to capture, preserve and/or produce electronic communications, e-mail is a good place to start. Any relevant information should be held and preserved, erring on the side of caution (i.e., preservation). Other data sources to check will depend on the nature of the case.

• Re-examine the nature of electronic data storage systems and consider an upgrade (and possibly the use of a trusted third-party), if needed, so that the data can be managed consistent with the operational needs of the business, but in a manner that will allow ready access and search, plus the ability to implement litigation holds (or the preservation of data for other reasons, such as agency audits, etc.).

While the new rules relate to litigation in federal courts, the principles inherent in them are prevalent in the law across all 50 states. In August 2006, the Conference of Chief Justices approved “Guidelines for State Trial Courts Regarding Discovery of Electronically Stored Information,” intended to reduce the uncertainty in how state courts handle the problems addressed by the new federal rules. Those rules and the evolving trends in courts across the country will have a dramatic effect on the time and money businesses spend preparing for and handling discovery in litigation. This places additional pressure on organizations to be more accountable for preserving and producing electronic data. The practices outlined above will likely become second nature for businesses involved in litigation.