Judge Learned Hand Please Help Them to Help Themselves History is About to Replicate Itself

Journal Issue

Sep 2006

Column Name

Beyond the Quill

Citation

ABI Journal, Vol. XXV, No. 7, p. 42, September 2006

Topic Tags

Practice and Procedure

Telecom/Tech

Journal HTML Content

ComputerWorld,
one of the best and easiest-reading technical publications, had two excellent
articles in the June 26, 2006, issue. The first article, "IT May Face New
E-discovery Rules in December,"2 quoted U.S. Magistrate Judge Ronald J.
Hedges (D. N.J.) regarding the new proposed Federal Rules of Civil Procedure
(FRCP). That article discussed how the new proposed FRCP will perhaps change
the practice of law and technology forever. The second article, "E-mail
Insecurity in a Litigious Society,"3 was the furtherance of the issues
raised in the ABI Journal's article, "Failure to Encrypt E-Mail
Jeopardizes the Privilege and Work-Product Doctrine: Protect or Perish"4
by this author5 to the IT community.

Judge Hedges will be one of the panelists6 at the joint educational
session for the Ethics Committee and the Commercial Fraud Task Force at the
2006 ABI Winter Leadership Conference on the subject of "'Adequate Protection'
of the Attorney-Client Privilege and Other 'Secrets' in the Digital Age."
(See p. 83.) The program will address the fact that various "privileges"
recognized in the Federal Rules of Evidence are under attack.
Indeed, "Failure to Encrypt E-Mail" was intended to facilitate change7
in the bankruptcy community, and things do appear to be happening as evidenced
from recent comments from the inner sanctum of abanet.org, which notified members
of an important Webcast in June 2006 on "information and security threats
that exist in a company's every transaction," and from the "law-on-line.com"
newsgroup discussions during July 2006 on "Electronic Eavesdropping and
Client Confidences:"
<blockquote>
 Despite the crucial importance of network technology in the conduct of modern
business and the potential exposure of sensitive information assets and client
data, information security and privacy are areas that are often foreign to
most attorneys. The serious nature of information security and privacy is
highlighted by recent laws and regulations enacted on the state, federal and
international level. Attorneys have an important role in assessing and contractually
managing information security and privacy threats that exist in a company's
every transaction.... 
</blockquote>

Using Technology 
The best computer, defined here as one having the fastest processing speeds
and lightest weight, largest storage capacity and largest viewing area, is only
as good as its weakest link. Hardware is one thing; adequate software and knowing
how to use it is another—and we shall not put the cart before the horse,
because when shown properly, what attorney, judge, professional or support personnel
would not want a better mousetrap? We know one thing for sure: Besides your
family cat; the one with the "best mousetrap" will catch more mice
and simply provide the right incentive for that lurking mouse (visual and anticipated
nourishment), and be done with it.
Proven software solutions become the intellectual nourishment of technology
users, and you have the capability to accomplish more in one month now than
in the past 10 years. That is exactly what this article is about; you will find
no "vaporware" being touted here, only those programs used and proven
effective by this author.
This is not a software manufacturer's warranty that states (tongue in cheek)
"we will attempt to get this solution to work someday if we can, otherwise
you own it the moment you install it and try as hard as you may to contact us
and complain, it will not happen as we do not answer those e-mails even if you
find our e-mail address. If we consider your e-mail offensive or we just don't
know the answers and/or you are absolutely right about it not working, we want
to be sure you do not get back to us anytime soon."
Seriously, the software solutions mentioned in this article are from companies
that have done it right. Incidentally, five of the eight companies listed for
the 11 solutions discussed here are outside the United States (two from Australia
and three from the United Kingdom).
None of the solutions suggested below are pre-installed on laptops or workstations,
and they are not free and/or light editions with spyware included, yet all of
these solutions can provide a payback either during the first day, first week
or first month, but not longer than three months.
Magnetic Time (U.K.) (<a href="http://www.MagneticTime.com">www.MagneticTime.com</a>)

The Magnetic Time (MT) solution allows you to "listen" to your e-mail,
Word documents, pleadings and reports on a laptop, desktop, MP3 player, iPod
etc. This program converts e-mail and Word documents into audio files [it creates
a second file] that you can take with you. Buy two and you get the third for
free, which means you can use this anywhere and on any type of device. Take
your pick—even an expensive head-set (not required)—because you
cannot afford not to be using MT.
This solution will definitely improve billable hours. Imagine being able to
listen to e-mails, pleadings and correspondence in the comfort of your home,
the beach, on vacation or practically anywhere (caution: Do not use this or
similar devices while you are driving, but trains and planes are a different
story). And do not be surprised when MT helps you find mistakes, because regardless
of spell-checkers and personal review, you are about to "hear" them.
MT brings another dimension to "multi-tasking.
Speed it up or slow it down [audio file] and save the files to your USB thumb
drive or burn to CD/DVD. In the end, you are listening to e-mails, documents,
pleadings and reports at probably 180+ WPM and retaining what you read and hear.
Skill with People8 by Les Giblin provides the needed insight
into what we read, hear and see:

<blockquote>
"Human Insight #2": How We Retain "information" 10% of
what we read. 20% of what we hear. 30% of what we see. 50% of what we see
and hear. 70% of what we say as we talk. 90% of what we say as we do a thing.

</blockquote>
When you use MT, you will do more in the same time. MT has a one-time cost
of less than $100 (allowing for three devices), and the first day using MT you
have the return on investment (ROI). What do you do when you just want most
of what is discussed but have no need to become a "portable attorney-at-law"
with an MP3 or iPod in your pocket?
ClaroRead PLUS by Claro Software (U.K.) (<a href="http://www.clarosoftware.com">www.clarosoftware.com</a>)

Not every attorney, accountant, expert, professional or bankruptcy judge will
become thrilled with the idea of having something stuck in their ear (MP3 or
iPod) or blasting from offices, home or in chambers. This solution, ClaroRead
PLUS by Claro Software, allows you to listen while you work; multitask if you
choose to. It plays e-mails and Word documents and other files on your workstation
or laptop computer and is intuitive at the same time. You can even save the
files that have been "read to you" as audio ".wav" (the
second) files if you choose to do so.

I use ClaroRead PLUS frequently for drafting reports, and they do not charge
to find your errors (or others) as it reads the text to you. The list regarding
"How We Retain Information" shown under the MT solution equally applies
to this application. I would buy ClaroRead PLUS right after you buy MT, because
you just never know when you would use them both, and unless you own it you
are not going to appreciate them. The investment will pay for itself the first
month with the ClaroRead PLUS features; consider purchasing the PLUS edition
with the "6 Additional Voices."
The World Is Not Enough 
Voice recognition (VR) software can talk longer, faster, louder and without
hesitation than any attorney; and you can tame it with the sleight of hand (mouse)
or finger (touch pad) to your liking.
However, there is one problem; you may become the next VR aficionado, because
like James Bond said, "the world is not enough" and you are going
to perhaps purchase additional "voices," especially when you realize
that these "voices" are generally interchangeable with other VR applications.
The author at last count had 10 voices that allow for selecting different voices
based on your mood or whatever sounds good to you that day. In e-discovery cases,
taking the "text content" allows you to create an audio database (work-product)
after selecting a particular voice for each party and continuing to use those
same individual voices9 during the case. Did you ever "read"
700,000 e-mails and perhaps more than 25,000 electronic documents (try listening
next time)? Then perhaps you have not been listening as you are reading (retaining)
what the debtor, insider, expert or creditor e-mails have to say regarding your
bankruptcy cases.
FinePrint Software (U.S.) (<a href="http://www.fineprint.com">www.fineprint.com</a>)

After using FinePrint for five years, it is my opinion that it is one of the
best productivity tools available. FinePrint (FP) allows you to print from two
to eight pages onto a single sheet/page. When you take advantage of the stationary
templates and form factory provided, you will know why this is a must-have situation.
Any job is easy with FinePrint—and it becomes even easier with larger
ones. FP allows you to read three (or more) pages as fast as you would read
two pages, or 50 percent faster than you are reading right now. When you visit
the FinePrint site, you will find 14 reasons why FP will allow you to save and
work smarter. Consider that the U.S. Postal Service and one of the Big 4 are
using this solution, but do not stop with FinePrint, because their "pdfFactory"
is another must-have, and the "server edition" provides benefits for
those on a network.
The ROI for this one-time cost of $50 is paid for in the first day of use.
When you combine the functionality of FinePrint with MT mentioned above, you
may find that you are able to "retain" five times more "information"
than if you just read the material; remember, you are also reading the content
at considerably faster rate.10

"FREE" Search Tools 
Basic business principles dictate that you may not get what you paid for, but
generally you're not about to get anything worthwhile for nothing (unless that
solution is recommended in this article). That being said, it is my opinion
that "Google Desktop" creates an enormous security risk and it should
not be used in the enterprise; that includes law firms, forensic accounting
firms, computer forensic firms, professionals and outside litigation support
services. Please do not fail to consider the risks created by those to whom
you outsource bankruptcy support, because the information may be at risk.
If you do not understand the difference, please stop downloading and installing
software and suspend using that "search tool," and go to www.computerworld.com
and read some of the numerous articles on computer and network security-related
issues. If that does not do it for you, please contact the author to be pointed
in the right direction (as far away from a computer as possible).
dtSearch (U.S.) (<a href="http://www.dtsearch.com">www.dtsearch.com</a>) 
Craftsmen are known by the tools they use, and that certainly applies to "search
tools." When we talk about finding that needle in the haystack, this solution
belongs at the top of anyone's list. Regardless of the edition of dtSearch you
purchase (Desktop/Network, Web/ Publish, Developer or Linux), it is simply the
best search tool available, but please select the appropriate edition and plan
for future needs.
Do you want your opponent to out-maneuver you in e-discovery efforts? I simply
cannot begin to imagine doing any search of electronically stored information
without having dtSearch in my forensic toolbox. Also, many computer forensic
and e-discovery software applications already have the dtSearch search engine
(API) built into the application.
First thing you need to do is go to the site dtsearch.com and see the customer
list; it's practically endless. Search almost any media and find just about
any kind of content; e-mails, Word documents, spreadsheets and databases are
only the beginning. Results are almost instantaneous (after indexing the data),
but if you are in a rush, you can search on the fly. dtSearch provides excellent
documentation and has the necessary support staff to answer your questions.
Expect to spend several hundred dollars for the Desktop edition and considerably
more for the Developer edition. When you need to "search" electronically
stored information, you need dtSearch. The new proposed FRCP becomes the law
of the land on Dec. 1, 2006, and it provides that electronically stored information
be considered in litigation. The ROI for dtSearch is practically as fast as
the search results. In digital forensics and e-discovery, your client cannot
afford mistakes, and that is perhaps another reason for using the dtSearch Developer
edition.
ISYS Search Suite (AU) (<a href="http://www.isys-search.com">www.isys-search.com</a>)

Craftsmen are expected to have more than one tool for doing the job, and it
is no different with "search tools." ISYS is always with me because
it provides comfort in knowing that you have eliminated the chance of "blind
spots" during e-discovery and digital forensic engagements. Select the
right ISYS solution (plan for the future), because ISYS does the job.

After using ISYS:Desktop for more than three years (versions 6 and 7) along
with having the appropriate indexes updated (automatically every night), you
are ready to hit the floor running. Consider adding ISYS to your collection
for litigation and e-discovery needs and plan on spending several hundred dollars
(which increases as you advance in the ISYS:Search Suite) because it is well
worth the price.
Examine32 (U.K.) (<a href="http://www.examine32.com">www.examine32.com</a>) 
This is perhaps the "best inexpensive solution" at $35, and it provides
good on-the-fly "search capabilities." I have used Examine32 (E32)
for more than four years, and it is fairly fast, complete and easy to use, providing
a great search history for future use.
E32 provides text searching, including GREP regular expression, logical searching
and "command line" search requests. The documentation is complete,
and the software developer has not charged for the numerous updates provided
over the years. E32 provides "drag and drop" features right along
with a "pre-configured tool bar," and that makes this one of the easiest
solutions available.
Buy this solution to be safe, because when you are not familiar with electronically
stored "information" (ESI) and your opponent provides you with ESI
after Dec. 1, 2006, you may actually have a gladiatorial fighting chance in
the bankruptcy arena.
CaseMap, TimeMap, TextMap and NoteMap (U.S.) (<a href="http://www.casesoft.com">www.casesoft.com</a>)

The new proposed FRCP for ESI demands that bankruptcy attorneys and forensic
accountants become experienced with the tools necessary to do the job, and for
those unwilling to change, it's time to consider retirement. But do not wait
too long, because Dec. 1 is fast approaching.
These "casesoft" tools—and I mean all of them—will make
a difference when used properly and consistently. Simply stated, casesoft tools
are the "best set of litigation and discovery tools available" for
more than eight out of 10 business bankruptcy cases. After using these tools
over the past two years, I began to realize how much you can actually accomplish
when you have the right tools for the job, and I say that without hesitation
or exception. Beyond ESI in litigation, the ability to manage projects that
are large and complex digital/computer forensic engagements for fraud is where
casesoft tools stand out.
Do not attempt to banter about why you do not need to be concerned about ESI
and technology issues, because clients these days know when and why things are
going bad for them, and you cannot afford to make that mistake. Rather, visit
<a href="http://www.casesoft.com/webinar.htm">www.casesoft.com/webinar.htm</a> and
start with the "Product Overviews" for each of the products. After
that, I am sure most will appreciate the CaseMap "Motion for Summary Judgment
(MSJ) Plug-In Installation and Use Webinar," because it is hard to find
a bankruptcy attorney or trustee that does not want to quickly end it with an
MSJ. Try three or four more webinars, and after spending perhaps two hours,
law firms, forensic accounting firms, computer forensic firms, professionals,
experts and outside litigation support services will see the difference and
be in a position to purchase the necessary licenses for these casesoft solutions,
especially when you consider that its ROI is less than three months for all
four of them.

Recover My Files and Explorer View (AU) (<a href="http://www.getdata.com">www.getdata.com</a>)

Recover My Files (RMF) and Explorer View (EV) will change how you approach
electronically stored "information," and they are free to use until
Jan. 1, 2008, but will then need to be purchased or they will stop working.
Just go to <a href="http://www.getdata.com/jackseward">www.getdata.com/jackseward</a>
and follow the instructions for downloading this software. From the author's
perspective, this solution will facilitate change, and the software developer
was sufficiently convinced that trustees, attorneys, accountants, experts, professionals
and others will purchase these solutions after using them.
The author11 has used RMF for more than four years, and presently
RMF allows you to examine, locate, preview and recover deleted and destroyed
data for more than 200 deleted and/or destroyed types of files that may have
been:
<blockquote>
(a) emptied from the Recycle Bin, 
(b) recovered formatted hard drives,

(c) recovered files after a hard disk crash, or 
(d) recovered files after partitioning errors.
</blockquote>
 The above can be done for recovery of documents, spreadsheets, graphics, compressed
archives, audio, video, e-mails, PDFs, databases and financial files found on
hard drives, camera cards, flash memory cards, USB, MP3, iPod, Zip, floppy disks
or other media. Create a "virtual drive" for preview and subsequent
recovery that includes both "active" and "inactive" files.
Then using EV, you will be able to view the "information" (previously
saved using RMF) and now stored on CD/DVD/ external hard drives or USB flash
drive), even if you do not have the software application installed on your computer.
Then use RMF (example) to examine three or 300 computers in a particular bankruptcy
case and do not stop there, as it will cost nothing to use until Jan. 1, 2008.
The licenses will then cost as follows:
<blockquote>
 1 Recover My Files - License to use on multiple PC's by one person = $297 
2 Recover My Files - Single user license on a single PC = $69.95

3 Explorer View - Single user license on a single PC = $29.95
</blockquote>
 Simply go to <a href="http://www.getdata.com/jackseward">www.getdata.com/jackseward</a>
and follow the instructions for downloading this software.
Concerns and Unanswered Questions 
But you ask, "is that all there is?" Not exactly. BAPCPA offers significant
challenges, but have professionals left the playing field? Exactly how do you
suppose bankruptcy attorneys, trustees, examiners and forensic accountants intend
to determine and examine the issues below when they have no requirement, intent
or motivation to examine the debtors' electronic books and records and financial
information?12 Electronic information can be found on the following:
<blockquote>
• backdated, deleted or changed board of director minutes

• discovery of business connections between professionals 
• alter-ego/piercing the corporate veil 
• failure to turn over electronic books & records 
• equitable-subordination claims 
• deleted or changed e-mails

• backdated, deleted or changed financial statements 
• fraudulent transfers 
• recovery of "second set of electronic books & records" 
• recharacterization claims 
• backdated, deleted or changed accounting entries

• deepening insolvency.
</blockquote>
 Perhaps the trustee, committees, examiner and attorneys should simply rely
on the debtor's fiduciary duty to protect the electronic books and records and
financial information? Does anyone think for a moment that it would be a good
idea to conduct a survey to determine those that have been successful in pulling
the wool over the courts' eyes and then opening the gates and letting the horses
out of the barn (by knowingly or unknowingly allowing the filing of a §365
motion to be submitted to the court and to be approved) for the return of leased
computers13 because then the debtor would not actually have the electronic
books and records and financial information (e-mails, possible backdated documents
and the litany shown above ) to be examined or be concerned about?14
Conclusion
The new proposed FRCP, as it relates to electronically stored information,
will impact the bankruptcy process like it or not. Those in the bankruptcy arena
just cannot continue to look the other way with regard to examining computers
and digital devices15 for electronically stored information, especially
when the actions of debtors, insiders, committees, trustees, attorneys, forensic
accountants, consultants, professionals, experts and creditors can most often
only be measured by doing exactly that.16 Bankruptcy metrics dictate
that "forewarned is forearmed,"17 and the debtor's electronic
books and records and related financial information are the core of the debtor's
business and can reveal, if properly retrieved, information that can lead to
the recovery of hidden assets and provide valuable information relating to claims
against the debtor's creditors, board members, shareholders, employees, insiders
and others. Understand that electronically stored information likely exists
and that this information, in conjunction with physical hard-copy documents,
will show the true substance of the transaction under scrutiny.18

<hr>
<h3>Footnotes</h3>

1 Hand, Learned, 1872-1961, American jurist, b. Albany, N.Y. He received his
law degree from Harvard in 1896. He was a judge of the U.S. District Court for
New York's Southern District (1909-24) and of the federal Second Circuit Court
of Appeals (1924-51). Often called the "tenth justice of the Supreme Court"
and regarded as one of the finest jurists in American history, Hand delivered
more than 2,000 opinions and was noted especially as a defender of free speech.
He is the author of The Spirit of Liberty, a collection of papers and
addresses (1952), and of The Bill of Rights, a series of lectures (1958).
The Columbia Encyclopedia, Sixth Edition 2006. This information is taken
from the Internet.

2 The article by Sharon Fisher can be found on the ComputerWorld site at <a href="http://www.computerworld.com/action/article.do?command=viewArticleBasic…;.

3 The article by Douglas Schweitzer, which quoted this author, can be found
on the ComputerWorld site at <a href="http://computerworld.com/action/article.do?command=viewArticleBasic&amp…;.
Schweitzer stated in his e-mail that Mr. Seward has the "empirical data
to back me up." 
4 February 2006 ABI Journal. 
5 This author was the co-presenter and co-author of "Protecting Client-CPA-Attorney
'information' in the Electronic Age" before the American Accounting Association's
Northeast Regional Meeting in 2005, urging the use of encryption to protect
the privilege and work-product doctrine, and that paper was subsequently selected
for the Research Forum at the International Meeting of the American Accounting
Association 2006 Annual Meeting. Mr. Seward was also the author for "Practice
Tip: Stop Your E-mail Risk - Now!" LJN's Legal Tech Newsletter, <a href="http://www.ljnonline.com">www.ljnonline.com</a>,
July 2004.

6 The panel includes U.S. Magistrate Judge Ronald J. Hedges (D. N.J.); Ira
L. Herman, Partner - Bankruptcy & Creditors' Rights, Thompson & Knight
LLP; Steve Katzman, U.S. Trustee for Region 15 and Acting U.S. Trustee for Region
16; and Lorenzo Mendizabal, Senior Vice President, Epiq Systems Inc. - Moderator.

7 The free offer to ABI members for the professional edition of encryption
software from Secured E-mail is still available and can be found at <a href="http://www.securedemail.com/jackseward">www.securedemail.com/jackseward…;.
If you need additional information, please contact the author. 
8 Copyright 1985 by Leslie T. Giblin. 
9 Using audio files from the authors ADTriage® (Audio Database Triage)
for protecting e-discovery work-product. 
10 Giblin, Leslie T., Skill with People, 1985.

11 Using the author's EDTriage™ E-Discovery in Commercial Litigation
Cases©, BKTriage™ for E-Discovery in Bankruptcy, Insolvency and Judgment
Enforcement Cases© and DFTriage™ for E-Discovery and Digital Forensic
Technology Cases©. For more information, please contact jackseward@msn.com,
(917) 450-9328 or fax (212) 656-1486. 
12 Robert C. Furr, a former editor for the National Association of Bankruptcy
Trustees, indicated in his summer 2003 column of NABTalk that "there
are no filing cabinets full of records that are easy to digest. Rather, there
is a mass of computers, hard drives, software, CD ROMS, etc., from which we
have to try to figure out what happened to this debtor." 
13 Seward, J. "What You Need to Know About a Debtor's Leased Computers,"
LJN's Equipment Leasing Newsletter, Law Journal Newsletters, December
2003 (<a href="http://www.ljnonline.com">www.ljnonline.com</a>). 
14 In re NextCard Inc., filed 11/14/2002, Delaware, case no. 02-13376;
"NextCard Fraud Case Dawns Digital Bankruptcy Enforcement," Bankruptcy
Law & Litigation Report, December 2003, p.86.

15 Digital Devices include, but are not limited to, PDAs, hand-held devices,
CD, DVD, Microdrive, CompactFlash, SmartMedia, SecureDigital, Memory Stick and
MultiMediaCard, optical devices, floppy disks, USB devices, MP3 players, iPod,
FireWire devices, PCMCIA hard disk drives, Zip disks, Jazz Disks, internal and
external hard disk drives, and tape backup systems. 
16 See the following articles for an in-depth analysis on the subject of discovery,
recovery and use of electronically stored "information" in bankruptcy:
Seward, J. "The Debtor's Digital Reckonings," International Journal
of Digital Evidence, Fall 2003 (<a href="http://www.ijde.org/%20docs/03_fall_seward.pdf">www.ijde.org/
docs/03_fall_seward.pdf</a>); Seward, J. and Austin, D. "E-sleuthing and
the Art of Electronic Data Retrieval: Uncovering Hidden Assets In The Digital
Age," American Bankruptcy Institute Journal, Part I February
2004, Part II March 2004 and Part III April 2004; Seward, J. "The
Debtor's Digital Autopsy or Where's The Money!" NABTalk¨ journal
of the National Association of Bankruptcy Trustees, Summer 2003; "How Digital
Forensics Can Give You an Edge," Bankruptcy Law & Litigation Report,
National Litigation Bureau April 2004; Seward, J. "The Debtor's Survival
in the Digital Age," American Bankruptcy Institute Journal, June
2004; Seward, J. "Digital Stealth Secrets and the Act," LJN's The
Corporate Compliance & Regulatory Newsletter, Law Journal Newsletters,
March 2004 (<a href="http://www.ljnonline.com">www.ljnonline.com</a>).

17 Musso, Robert J., Weiner, Bruce, Austin, Daniel A., Seward, Jack "Zero
Tolerance for Commercial Bankruptcy Fraud," American Bankruptcy Institute
Journal, December/January 2006. 
18 Brighton, Jo Ann, and Seward, Jack, "Is it a Capital Contribution or
a Loan, and How Can Electronic Data Assist in the Analysis or Defense of a Claim
for Recharacterization?" Association of Insolvency and Restructuring Advisors
(AIRA News), Part I June/July 2004 and Part II August/September
2004.

Journal Authors

Jack Seward

Journal Date

Friday, September 1, 2006 - 12:00

Bankruptcy Rule

2006

none