Social media e-discovery: Crucial, even in its infancy

An increasing number of tools can help, but there are many issues to work through first.

Until late last year, First Command Financial Services' presence on the social Web was pretty much nil: No corporate Facebook pages and no business-related postings by its 400 registered investment advisors (RIAs), although they could have personal accounts.

Last December, that changed. The company launched corporate pages on Facebook, LinkedIn and Twitter and started a blog called "Your Money Matters" on By year-end, 50 RIAs will start interacting with clients via Facebook, LinkedIn or Twitter, with 100 more scheduled for next year, according to Katherine Kirkpatrick, First Command's director of social media.

But before all this could happen, a team of compliance, IT, marketing and legal people spent months developing policies and an infrastructure for managing social media usage, surveillance, retention and e-discovery in compliance with stringent federal regulations and internal rules, Kirkpatrick says.

Katherine Kirkpatrick
"We absolutely want to take advantage of social medias business potential, but we have to work within the compliance framework," says Katherine Kirkpatrick, director of social media for First Command Financial Services.

"We absolutely want to take advantage of social media's business potential, but we have to work within the compliance framework," Kirkpatrick says.

First Command is in good company. "Financial service firms are taking social media archiving and e-discovery seriously because regulators tell them to," says Michael Osterman, president of Osterman Research, a consultancy in Black Diamond, Wash.

Morgan Stanley Smith Barney made a big splash when it announced in June that it plans to give its roughly 17,000 financial advisers access to Twitter and LinkedIn over the next several months, after a year-long trial with a group of 600 employees.

And Guardian Life Insurance Co. now has a thousand employees interacting with prospects and clients via Facebook Business Pages and LinkedIn, and plans to gradually add another 2,500, says Steve Holstein, the firm's chief marketing officer. The firm uses Socialware's Voices, a hosted social media management platform designed specifically for the financial services industry, which includes archiving, surveillance of posts and e-discovery services.

   Steve Holstein
"Guardian Life Insurance Co. now has 1,000 employees interacting with prospects and clients via Facebook Business Pages and LinkedIn, and plans to gradually add another 2,500, says Steve Holstein, the firm's chief marketing officer.

Beyond the financial and government sector, however, most business and IT leaders have yet to start dealing with social media content management, analysts agree.

In a first quarter 2012 survey of 209 businesses, online archiving vendor Smarsh found that nearly 80% of respondents indicated they have written policies to address use of LinkedIn, Facebook and Twitter, compared with less than half the previous year. However, more than 60% of respondents said they have not started deploying archiving and supervision systems for social media.

One major reason why companies are taking it slow, Osterman says, is the lack of clear regulations for business usage of social media.

Even in highly regulated industries, such as Big Pharma and banking, social media rules remain vague at best. For example, congress is currently considering the Food and Drug Administration Safety and Innovation Act, which would require the FDA to issue guidance on how to use the Web, including social media, to promote products.

Sometimes, there are multiple categories of rules to consider. Because it serves military personnel and their families, First Command needs to meet regulations that apply to government agencies, like the National Archives and Record Administration's two-year-old bulletin that Web 2.0 tool usage must comply with all existing records management laws, regulations and policies.


Furthermore, the company needs to meet increasingly stringent government rules pertaining to financial service firms.

For instance, the Financial Industry Regulatory Authority Regulatory Notice 10-06 states, "Every firm that intends to communicate, or permit its associated persons to communicate, through social media sites must first ensure that it can retain records of those communications." In January, the Securities and Exchange Commission set out rules for investment advisers' use of social media.

Further muddying the waters: Companies whose policies limit employee social media postings can run afoul of the National Labor Relations Board (NLRB). Of the seven corporate social media policies recently reviewed by the NLRB, only one -- Walmart's -- was deemed completely lawful under Section 7 of the National Labor Relations Act.

In other companies' policies, the NLRB found that a "reasonable employee" could interpret policies that restrict the posting of "confidential information" or "non-public information" as limiting their right to disclose the conditions of their and others' employment.

Sorting through massive amounts of data

Then there is the daunting task of monitoring, collecting and archiving a huge and rapidly growing body of social media posts. Consider that only 50% of businesses surveyed by Osterman Research in 2011 had a discoverable email archive in place, a number that Osterman predicts will grow by only 7% this year, based on other recent survey data.

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