Yesterday both the New York Times and the Wall Street Journal reported that NASD will now require its members to save instant messages for at least three years (just as they must e-mail messages). The same articles mention that NYSE had imposed the same requirements on its members earlier in the week (which, if it was reported, I missed).

If saved IM records ever become subject to discovery, they will just add to the already large volume of digital data that lawyers must review. I suspect that e-discovery vendors are happy about this! I’m not sure that IM e-discovery raises unique issues. But if Wall Street IM usage is typical, abbreviations and shorthand is rampant. Moreover, since IM interactions may follow a phone call, e-mail exchange, or hallway encounter, they may reference events or things that, standing alone, are not all that clear. I suspect that therefore applying automatic analysis and screening techniques in e-discovery to IM will be even more challenging than it is to other digital data. There are specialized vendors that say they can help. For example, Cataphora says it can help put this type of information into context (meaning relating it to other documents and records) and H5 says it can help give meaning by pre-filtering based on issue definitions.

I was also surprised that both papers did not give this more press. The NYT devoted four column-inches in a corner tucked away on page C6; the WSJ about eight on page C4. I suppose that reflects my limited perspective on what’s important!