The Lawyer’s Guide to Cloud Computing: Part 3 (of 4)

Grazed from WestSide Lawyer. Author: Daniel Garrie.

In the last blog post, I discussed the importance of research when choosing a data hosting provider, the potential difficulties of implementation, and cloud-computing security. In this post I will explore the implications of unsearchable cloud-based data on litigation and the worst case scenario – the unexpected exodus of your cloud operator.

Cloud-based operations have many benefits, including ease of accessibility and sharing. However, when it comes time to produce relevant information in the cloud, it is important that counsel understand that the information that sits in the cloud is not all necessarily searchable. In some instances the cloud lacks the necessary search component required to search and retrieve that data. For example, the information may be stored in a unique format proprietary to the client that is not recognized by the cloud. This in turn means that a client may find it impossible to readily access that information…

It also means that, when counsel seeks to effectuate a production and collect responsive information during litigation, the resulting data set will not include any information from those files, possibly without counsel being aware that certain data exists that has not been searched and collected. Therefore, it is imperative that, before counsel works with cloud based systems, they make the inquiries necessary to establish the format(s) of the data stored in the cloud and confirm that all the data in the cloud can be searched and produced.

Despite the potential issues, cloud computing presents a compelling business value proposition for many firms. Still, we would recommend that prior to adopting such cloud based technology a company consider cloud evaporation scenarios and how it might impact the company and any pending litigations.

Here, for example, are three unanticipated cloud evaporation scenarios we have seen occur:

• Acquisition – Your cloud is acquired by a competitor and data must be migrated to another cloud or internal system;
• Bankruptcy – Your cloud goes bankrupt causing the cloud to evaporate and with it your data. Best case you can migrate your data out. Otherwise you may have to purchase the machines in the cloud or risk having a 3rd party buy a machine with your data on it.
• The cloud provider has a security breach and the data stored in the cloud is compromised requiring either migration to a new cloud or system and an information audit.

In all three “evaporation” scenarios, companies are suddenly required to make quick and expensive decisions with potentially far reaching consequences for the security of their data. In addition, all three scenarios invite potential challenges to chain of custody, particularly in the event of a security breach. Counsel should consider these and other evaporation scenarios now, rather than in the heat of the moment. An early action plan will help prevent such events from wreaking havoc on the company and any attendant litigation. While it is unlikely that Google, Microsoft, Yahoo!, Amazon, or Hewlett-Packard would disappear overnight, it is important that companies consider this when assessing a move to the cloud.