The State Bar of California may soon deem an otherwise highly skilled attorney to be “incompetent” in the practice of law if he or she does not know the basic steps to take with respect to electronic discovery and does nothing to fill that gap in knowledge. On February 28, 2014, California’s State Bar Standing Committee on Professional Responsibility and Conduct tentatively approved a Proposed Formal Interim Opinion for a 90-day public comment distribution, which analyzes a hypothetical fact pattern of an attorney who makes egregious mistakes in e-discovery.

The proposed opinion presents a bleak statement of facts.  The hypothetical attorney first refused to provide any e-discovery to the opposing side.  Then upon court order at the case management conference, the attorney agreed to a compromise proposal that he misinterpreted and executed poorly.  The attorney had agreed to a search of his client’s network with agreed-upon but likely overbroad search terms.  Once the documents were retrieved by his vendor, the attorney, without reviewing the documents for privilege or confidentiality, dumped the data onto opposing counsel.  The attorney then reported to the court that he had reviewed the documents and that the production complied with the court’s order. 

It so happened that there were big gaps in the production because electronically-stored information (ESI) had been routinely deleted from the company computers as part of a normal document retention policy.  The attorney had never advised the client about preservation nor issued a litigation hold.  On top of that, as part of the data dump, privileged information as well as irrelevant information about the client’s highly confidential new product was produced to the other side.  The attorney did not notice any of this until the other side complained of spoliation, and the attorney had to engage an expert to read the data he had produced.  Unfortunately for the attorney, he also believed that he could “clawback” anything from this production based on the broad clawback agreement with opposing counsel that permitted him to clawback any inadvertently produced ESI that was otherwise “protected by law.”  But the scope of that clawback agreement and whether the production was “inadvertent” now had to be litigated, and the client was facing possible waiver of the attorney-client privilege and possibly no way to remedy the disclosure of highly sensitive, competitive information.

Using this statement of facts, the proposed opinion analyzes this attorney’s conduct under the rubric of an attorney’s ethical duties.  The opinion concludes that this hypothetical attorney violated his duties of competence, confidentiality, not to suppress evidence, and candor.

The proposed opinion first analyzes the duty of competence.  The conclusion is clear: no matter how experienced an attorney might be, a lack of appropriate knowledge regarding ESI is not an excusable deficiency. An attorney who does not know enough about ESI to be competent has three choices: (1) he or she can associate with someone who is competent, (2) learn what he or she must to perform the skill, or (3) decline the representation.  To be competent, the opinion states that an attorney should be able to do the following:

  1. Initially assess e-discovery needs and issues, if any;
  2. Implement appropriate ESI preservation procedures, including the obligation to advise a client of the legal requirement to take actions to preserve evidence, like electronic information, potentially relevant to the issues raised in the litigation;
  3. Analyze and understand a client’s ESI systems and storage;
  4. Identify custodians of relevant ESI;
  5. Perform appropriate searches;
  6. Collect responsive ESI in a manner that preserves the integrity of that ESI;
  7. Advise the client as to available options for collection and preservation of ESI;
  8. Engage in competent and meaningful meet and confer with opposing counsel concerning an e-discovery plan; and
  9. Produce responsive ESI in a recognized and appropriate manner.

Next, the opinion analyzes this hypothetical attorney’s duty of confidentiality, concluding that the attorney had the duty to protect his client’s secrets and also to assert the attorney-client privilege to protect privileged communications.  The opinion acknowledges that while the holder is not required to take Herculean efforts to resist disclosure, the privilege will only protect the communication if the attorney and client act reasonably to protect the privilege in the first instance.  Thus, an attorney must implement reasonable measures to protect confidential and privileged information.  The opinion concludes that here, the attorney took nominal steps to protect the ESI produced, instead unreasonably relying on a clawback agreement that may not have been as broad as he thought.  Consequently, he breached his duty of confidentiality to his client.

The opinion then analyzes the attorney’s duty not to suppress evidence and his failure to counsel his client about ESI destruction after the duty to preserve was triggered.  The opinion concludes that the attorney violated this duty as well.

Finally, the opinion concludes that the attorney violated his duty of candor when he assured the court in the second case management conference that he had reviewed the documents and that his handling of e-discovery complied with the court’s order, because he had not reviewed the documents at all.

Faced with such dramatic and extreme facts, it is easy to see why the ethics opinion concludes that this hypothetical attorney had violated a myriad of ethical duties.  Indeed, some of the ethical violations are not unique to e-discovery—a lawyer telling any court that he has done something that he has not actually done generally would violate the duty of candor.  Similarly, the failure to review documents for highly confidential trade secrets or privilege before wholesale producing the documents to a competitor in litigation would have been problematic even before data was stored on computers. 

The opinion does not expressly address what makes e-discovery different from paper-based discovery, but it appears that the California Bar believes that there is an important difference that implicates the ethical duties addressed in the opinion.  After all, were there no difference, it would not take an eight-page opinion to address the issue of “[w]hat are an attorney’s ethical duties in the handling of discovery of electronically stored information”—the answer would simply be “the same as with paper-based discovery.” 

It is not hard to see why the California Bar believes that e-discovery presents certain challenges not present with paper-based discovery that implicate the duties addressed in the opinion.  The complexity of electronic data storage today cannot be overstated.  ESI has progressed way beyond the days of principally email and computer files.  Lawyers increasingly are confronted with such challenging forms of ESI as social media, cloud storage, smart devices under Bring Your Own Device (BYOD) policies, and dynamic databases.  Figuring out where relevant ESI exists (especially at a large, sophisticated company) and how to collect, process, review, and produce it (and in what form, or forms) presents issues that a lawyer obviously need not confront when simply collecting paper documents from file folders, copying them, and producing them in traditional bankers’ boxes.

ESI also presents unique preservation challenges.  For example, as addressed in the hypothetical fact pattern here, clients often adopt document retention policies that require the routine deletion of ESI.  This frequently occurs automatically, such as deleting emails after a certain period of days or once an employee’s mailbox reaches a certain size.  The proposed opinion makes clear that a lawyer’s ethical duties require that reasonable steps be taken to avoid improper destruction of potentially relevant ESI under such policies.  Preservation can be even more challenging when involving dynamic databases, where potentially relevant ESI is regularly modified, overwritten, or otherwise lost through routine, day-to-day operations.  Preserving such ESI may require generating regular database reports, altering or perhaps suspending certain routine operations, or even modifying the database software itself.

Even the volume of ESI distinguishes e-discovery from paper-based discovery.  There was a time—not so long ago—where producing hundreds of boxes of paper documents was fairly uncommon.  Today, where ESI is regularly measured in terabytes, the sheer volume of ESI to be collected, reviewed, and produced creates headaches for lawyers and clients.  Document-by-document review for responsiveness, privilege, or confidentiality has become extremely expensive and time-consuming with ESI—and the greater the volume, the greater the risk of mistakes in what does or does not get produced.  This necessarily requires some reliance on nonwaiver (or “clawback”) agreements or orders, and in some cases, the use of advanced technological solutions to reduce cost and increase efficiency—such as technology-assisted review, or predictive coding.  The proposed opinion warns that nonwaiver agreements do not necessarily relinquish a lawyer’s duty to protect client confidences and those relying on such agreements need to be sure they fully understand any limitations on the protections afforded by those agreements.

The proposed opinion sends a strong warning to those practitioners in California who do not yet possess appropriate knowledge and understanding of e-discovery.  But it provides limited guidance, unfortunately, about what exactly is required of lawyers to avoid running afoul of the ethical duties addressed.   This is because most lawyers practice in the space between the obviously egregious facts in the opinion and unattainable perfection.  The opinion does not address the specific types of sometimes-difficult decisions about e-discovery that lawyers must increasingly make in the realities of practice, where the risks must be weighed against the ever-growing costs and burdens of e-discovery.  It almost certainly would be a mistake for any practitioner to conclude from the proposed opinion that as long as one stops short of the extreme conduct described in the hypothetical then he or she will not be at risk of violating any of the ethical duties discussed in the context of e-discovery.  That said, hopefully an attorney who works with a client in good faith to handle e-discovery and endeavors to make reasonable decisions about risk and costs, but who nonetheless later faces an adverse ruling by a court on an e-discovery issue, would not be deemed to have violated his or her ethical duties.

Regardless of what changes are made to the opinion after public comment, one message is loud and clear: attorneys practicing in California must know enough about e-discovery to know whether they need to seek help.  Even those at the pinnacle of the legal profession in their respective areas of practice could face ethical violations if they lack the requisite understanding of e-discovery or sufficient support from those who do understand it.