A survey of 101 corporate counsel, legal department staff and law firm attorneys reveals companies are falling short on discovery preparedness. According to the study–”In Pursuit of Proactive Litigation Preparedness: The Dawn of the Discovery-Ready Enterprise”–conducted by Oc? Business Services, a document process management service provider, 55 percent of corporate counsel believe their company is not well prepared to comply with a legal discovery request, while only 10 percent would consider their company very well prepared.

Among corporate counsel, 10 percent say they understand “very well” the 2006 e-discovery amendments to the FRCP, while 33 percent admit they don't understand the changes very well.

Despite this confusion, corporate counsel are clear on one thing: 57 percent believe their annual discovery costs will increase in the next year. Among large enterprises, 70 percent believe discovery costs will increase in the next year, with 20 percent expecting an increase of more than 25 percent.

The majority (60 percent) of respondents reported their organizations will use both in-house e-discovery experts as well as one or more outside service providers to deal with e-discovery. Twenty-four percent will establish e-discovery expertise exclusively within their organizations.

Across the board, a majority of respondents agreed that maintaining a records management program can reduce litigation costs (54 percent), reduce the amount of documents and ESI subject to discovery (62 percent), locate responsive materials more quickly (71 percent), lessen risk of penalties, sanctions and damage to reputation (73 percent) and facilitate implementing the duty to preserve (79 percent).

Although respondents see the value of a records program, only 45 percent of their organizations have a fully implemented records management program. Of those that do, just 8 percent believe their program addresses ESI very well. Among the 55 percent without a fully implemented records management program, 43 percent have no plans to introduce a program to their organization or don't know when and if they will. Fifty-six percent say their company intends to start a program within six months or in 2008.

Goals of the majority included creating a unified methodology that recognizes records management, compliance and paper discovery and e-discovery as interdependent processes. The majority also made it a goal to take a proactive approach to managing all forms of corporate records for compliance and discovery.