The new Federal Rules of Civil Procedure regarding retention of electronic documents have been in place since December 2007. While the rules make it clear that companies have a responsibility to keep track of certain types of electronic documents, most still don't have a consistent policy in place. This goes for small firms as well as those on Wall Street.

The process for creating and maintaining data retention policies, designating responsible custodians of the data, like any new comprehensive process imposed from the outside, may be resisted and misunderstood. Many executives may find it confronting to have to retain communications and documents that they might previously have been able to keep private. Furthermore, these documents and communications are being put in the hands of subordinates.

Some may still see the new FRCP as all thunder, but of little consequence, as with the dire warnings regarding Year 2000. (In fact, the millions of changes made and dollars spent in advance of Y2K may have allowed the date to pass with relatively minor disruptions, as distinct from the widespread catastrophe predicted by many.) There is still a wait-and-see attitude, even in the face of discovery demands being made in the present time.

It is necessary for businesses to produce data that is applicable to a discovery motion, or face possibly major fines and sanctions - that can run into the millions of dollars. To such an end, companies can wait until the time they are required to produce such data, then go into "hurry-up" mode to dig it out of all the places it lives. Or processes can be put into place such that data that may be needed in future suits can be archived in a continuous and seamless fashion. As it is now necessary to show their e-discovery policies to opposing counsel immediately upon a first meeting after a case is filed, or face such sanctions and fines, it behooves a company to actually have data retention policies in place and documented.

In many cases, if no such policy is in place, computer forensic analysis is likely to be necessary. While such experts are available and the cost may not be overwhelming, it is possible that data can be overwritten and become unavailable or unrecoverable. The US White House has found itself in such a bind, although many would say that this was by design and not by accident. Still, as corporation, even a major Wall Street firm, may not find itself with the resources to "run out the clock" on discovery efforts. Administrations change every few years; corporations may be forever.

Read more about this subject in an article by Melanie Roder in Wall Street and Technology.