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:"

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....

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.) (www.MagneticTime.com)

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:

"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.

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.) (www.clarosoftware.com)

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.) (www.fineprint.com)

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.) (www.dtsearch.com)

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) (www.isys-search.com)

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.) (www.examine32.com)

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.) (www.casesoft.com)

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 www.casesoft.com/webinar.htm 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) (www.getdata.com)

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 www.getdata.com/jackseward 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:

(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.

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:

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

Simply go to www.getdata.com/jackseward 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:

• 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.

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

 

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Footnotes

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 www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=111615.

3 The article by Douglas Schweitzer, which quoted this author, can be found on the ComputerWorld site at computerworld.com/action/article.do?command=viewArticleBasic&articleId=111607. 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, www.ljnonline.com, 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 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 [email protected], (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 (www.ljnonline.com).

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 (www.ijde.org/ docs/03_fall_seward.pdf); 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 (www.ljnonline.com).

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.