In compliance investigations, companies find that e-discovery technology delivers results and savings
May 2016 | EXPERT BRIEFING | COMPANY LAW
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No matter what steps a corporation takes to ensure legal compliance by its officers and employees, there is no fail-safe. Violations of anti-corruption laws and other regulatory schemes can still occur. When they do, a corporation faces the risk of substantial civil and criminal sanctions.
For this reason, an effective corporate compliance programme should be designed with the goals of not only preventing criminal conduct, but also of detecting it if it does occur and weeding it out quickly. In the US, corporations that implement an “effective program to prevent and detect violations of law” can be eligible for reductions in criminal penalties of as much as 95 percent.
Internal investigations of suspected wrongdoing must be swift and thorough. That means having in place systems to alert the company to suspected anti-bribery violations and then having the ability to quickly gather and triage the evidence to determine whether further action is warranted.
In this scenario, however, swiftness and thoroughness are mutual enemies. For a multinational corporation, evidence of potential violations may lie hidden in digital storehouses of emails, electronic documents and other data – data that might be stored in any number of disparate locations and in any mix of languages. Searching all that data thoroughly takes time and expense. The more the time is condensed, the more the expense goes up due to needed manpower and support.
Fortunately, there is technology available that enables corporations to conduct internal investigations both swiftly and thoroughly, while actually reducing the overall cost of the investigation. It is essentially the same technology that was originally designed to assist litigators in conducting electronic discovery.
E-discovery software provides sophisticated search and analytics tools that help litigators search documents and explore patterns and relationships among them in order to find evidence relevant to a case. The same software is highly effective when used by compliance professionals to investigate data that may harbour evidence of unlawful activity.
Some of the leading e-discovery platforms are cloud-based and able to process and search data in multiple languages. This makes them ideal for use by multinational corporations, because compliance staff has access to the platform from anywhere, they can easily load data and can search across all the languages in which the corporation does business.
A case study
To understand how this can work, consider the example of a multinational medical device company. It uses e-discovery technology to streamline and standardise its process for investigating compliance tips from its offices in Asia, Europe and elsewhere.
Like many corporations, the company has set up a hotline to receive tips of potential anti-bribery violations. These tips are directed to regional compliance staff in offices across the company’s Asian and European regions. Staff also initiate inquires internally. Once an investigation was initiated, standard procedure was to collect emails and other electronic files from the appropriate custodians and then search through it all for evidence of suspicious activity. However, for a long time, the company lacked the right technology that would enable it to do this efficiently and effectively.
The company’s Singapore office came up with the idea of adapting e-discovery technology to use for these internal compliance investigations. Legal staff there had used an e-discovery platform elsewhere and believed it could be an effective tool that would enable them to quickly load, search and analyse data related to alleged violations.
The platform worked so well in Singapore that regional offices in locations as disparate as Bulgaria, India, Japan, Spain and Thailand followed suit. In short order, the company adopted the e-discovery platform as the standard application to use for all its compliance investigations worldwide.
Now, for each new investigation, the regional office involved sets up a new site within the cloud-based e-discovery platform dedicated to that matter. A site can be up and running within an hour. Then, using the platform’s automatic loading and processing capabilities, custodian data specific to the country is exported from the company’s servers in the US and loaded into the site.
“For the company, a key feature of the e-discovery platform is the ability to control the process itself without having to wait for a third party to process and load data.”
From there, regional staff use the platform’s search and analytics tools to look for evidence of the alleged impropriety. If the initial search uncovers evidence warranting further inquiry, a local law firm is engaged to more thoroughly review the data and determine how to proceed.
For the company, a key feature of the e-discovery platform is the ability to control the process itself without having to wait for a third party to process and load data. An entire investigation – from when the initial tip is received to when it is either closed or referred out – often takes no more than two weeks.
Key features to look for
E-discovery platforms can both strengthen the thoroughness and reduce the cost of an internal investigation. However, not all e-discovery platforms are alike. To be most effective in facilitating internal investigations, a platform should include: (i) automated case creation, so that the company can quickly set up new investigation sites as needed without requiring third-party involvement; (ii) automated processing and loading, so that the company can load its own data into the platform and quickly get started with review; (iii) robust and intuitive search capabilities, so that compliance staff can rapidly hone in on key information; (iv) visual analytics such as timelines and relationship maps, enabling investigators to identify and explore patterns in email correspondence and other data; and (v) integrated batching, export and production capabilities to easily deliver documents externally to outside counsel or government investigators.
For multinational corporations, another critical capability is handling documents regardless of their language. When a company’s business is global, then the emails and documents under scrutiny could be in any of a range of languages or even have multiple languages within a single document. Thus, the platform should be able to process documents in multiple languages and, more importantly, search them in multiple languages.
How much does it cost?
Pricing of e-discovery platforms typically reflects their use in litigation, where single sites are hosted for longer terms and can contain large volumes of data. When these platforms are used for compliance investigations, the workflow is just the opposite. There are a higher number of sites but each site contains a relatively small volume of data and is active for only a short term.
For that reason, you should work with the e-discovery vendor to come up with a pricing scheme that is suited to this workflow. In the case study above, for example, the company and the vendor agreed on a flat monthly rate that made sense for its workflow. The rate allows the company to have unlimited, all-inclusive use of the platform, including all processing and hosting.
Factor into the cost the time savings achieved by using the software. Because it helps investigators search data more quickly and effectively, the software significantly reduces the overall time of an investigation and thus its cost.
Conclusion – the right tool for the job
Internal investigations are essential components of strong corporate compliances programmes. Investigations must be swift and thorough, but corporate executives are also mindful of managing the cost. As many corporations have already found, the same technology used for e-discovery in litigation can also be used to uncover evidence in compliance investigations.
John Tredennick is the founder and chief executive officer of Catalyst Repository Systems. He can be contacted on +1 (303) 824 0840 or by email: jtredennick@catalystsecure.com.
Over the past 30 years, John Tredennick has spoken before more national and international audiences on legal and technology issues than he or anyone else can remember. He has written and edited five best-selling books and countless articles on litigation and technology issues. He is one of a small number of people who pioneered the e-discovery industry. In 2013, the American Lawyer named him among the six most important“E-Discovery Trailblazers”. He has also been named one of the “Top 100 Global Technology Leaders” by London's CityTech magazine and to the 2012 FastCase 50, which recognises 50 of the smartest, most courageous innovators, techies, visionaries and leaders in the law.
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