August 21, 2012
In the last installment, I discussed the implications of unsearchable cloud-based data on litigation and the unexpected disappearance of your cloud operator. In this final installment on the cloud, I will discuss the privilege issues, hidden costs, and data formatting problems that may present themselves when using the cloud.
Cloud-based systems present novel privilege issues. All privileges are founded on restricted access. Should privileged information be shared with a third-party, the privilege vanishes. Usually, privilege is readily maintained because a company’s sensitive information remains in-house in the company, until it is shared with outside counsel to whom the privilege still applies as part of the litigation.
Cloud computing, however, necessarily involves migrating data outside the company and to a third-party host. Quite apart from any catastrophic breach in the cloud, it is likely that the specific elements of privilege, and the importance of maintaining that privilege, will not be as understood or appreciated by those that manage the cloud infrastructure on your behalf. Extra care must be taken to ensure that the data managed is not accidentally accessed by a third-party or by a system administrator accessing privileged data in the context of resolving a technology issue. A recent article discussing privilege issues involving a cloud computing firm can be found here.
Cloud based computing represents an attractive value proposition, but look for hidden costs that might arise as a result of the size of the data set, the difficulty of retrieval, or the need to repeatedly access and manipulate the data hosted on the cloud. It may make sense to migrate only a portion of a company’s data to a cloud based computing system, while retaining in-house control over other areas of information. For further discussion of potential missteps in cloud computing, this article presents the most costly cloud mistakes.
Finally, it is important to remember that litigation may continue to the point that the cloud no longer actively supports the data format in which your information is stored in the cloud. The issue then arises as to how you deal with the upgrade, and the impact of any such upgrade on the required preservation of that data. For instance, many upgrades may limit or eliminate the types of metadata that can be extracted during production, leading to potential spoliation claims by your adversary.
Before adopting or deploying cloud based solutions for your enterprise, or for a specific litigation matter, client and counsel should carefully evaluate the issues discussed across this series of postings, including comprehensive conversations with the IT, business and legal units. Otherwise, the company and the firm may be exposed to unanticipated and unnecessary risks and costs.
I hope this series of short articles has clarified the potential benefits and pitfalls of operating your legal business in the cloud. I welcome feedback and look forward to hearing from readers.