Fasten your seatbelts legal mavens – in less than six months electronic discovery as we know it will undergo some important changes. These changes are being driven by amendments to the Federal Rules of Civil Procedure (FRCP) that become effective on December 1, 2006.

While one of the intentions behind these changes is to reduce litigation costs, it very well may be that electronic discovery costs will increase as a result of the amendments, especially with respect to work that must be performed within the first 120 days after a lawsuit has commenced.

Under amendments to FRCP 16(b), parties must get ready for a scheduling conference to consider electronic discovery plans within 120 days of the start of a lawsuit. And, at least 21 days before this scheduling conference, parties must meet and confer to discuss and try to agree upon electronic discovery procedures for the case, pursuant to FRCP 26(f). This means that parties must be formulating their electronic discovery plans within the first 100 days of the life of a case.

While the purpose of these new rules is to provide early structure, uniformity and predictability, the reality is that right from the get-go of a lawsuit a party must start evaluating with its IT team and its outside counsel where it stands in terms of its own electronic data. Data can be located live on the network, on various servers, in hard drives, in share drives, on laptops and PDAs, as well as on backup tapes.

It is not always an easy task to ascertain where electronic information that is responsive to the allegations of a lawsuit resides, and figuring this out helps to determine what electronic discovery to demand from the other side in a case. Plainly, a party should not expect to demand a category of electronic discovery that itself is not willing to produce.

Let there be no mistake – electronic discovery is expensive. There have been many times that cases have resolved before the parties and counsel have been immersed in the burdens and expense of electronic discovery search, retrieval and production processes. By forcing these processes early on in a case, at least in federal courts by way of the new FRCP amendments, parties really have no choice but to move forward with electronic discovery at the start of a case.

Of additional significance is the fact that Rule 26(a) will broaden the definition of electronic items that may be subject to discovery from “documents” or “data compilations” to include all electronically stored information. Thus, whereas before parties might have been able to try to shield certain types of electronic information from discovery, conceivably the other side now can demand everything from standard Word documents and emails to voicemail messages, instant messages, blogs, backup tapes, and database files.

Of course, parties still can argue that the burden of any particular demand outweighs the potential probative value of the electronic information sought. For example, demanding parties cannot automatically expect that responding parties will restore and produced backup tapes. Responding parties can assert that these tapes are not reasonably accessible, their production would cause undue burden, and the value of the tapes pales in comparison to the recovery and production efforts that would be required.

Given that the provision of electronic discovery is burdensome and could be extremely costly if every bit of electronic data were reviewed very carefully prior to production, Rule 26(b)(5) will allow parties to retrieve inadvertently produced privileged information as part of clawback agreements. To be safe, and because it is not difficult to mistakenly produce privileged or proprietary electronic information, some very sensitive trade secret information should be designated as “Highly Confidential” for the eyes of outside counsel only.

There has been a lot of worry about potential spoliation (destruction of evidence) arguments when certain electronic information has not been saved. Under Rule 37(f), a judge now will have the discretion to disallow sanctions when a party has lost electronic information as a result of the regular good faith running of an electronic information system. Still, parties must have in place solid data retention policies and practices and litigation hold procedures when it comes to information that could be appropriate for discovery.

None of the foregoing requirements are easy or cheap. We now are in the electronic age, and we need to deal with its burdens and not just its benefits.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP (http://www.duanemorris.com) where he focuses on litigation matters of various types, including information technology and intellectual property disputes.  His Web site is http://www.sinrodlaw.com and he can be reached at [email protected].  To receive a weekly email link to Mr. Sinrod’s columns, please send an email to him with Subscribe in the Subject line.

This column is prepared and published for informational purposes only and should not be construed as legal advice.  The views expressed in this column are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners