Have you reviewed your e-mail and electronic document retention policies and procedures lately? If not, you should.

New federal rules went into effect in December that require companies to preserve all relevant e-mail, word processing documents, spreadsheets and databases when litigation seems likely to occur.

The new rules – dubbed e-discovery rules – are causing law firms, insurance companies, financial services, pharmaceuticals and many others to revamp their e-mail archival, storage and retention processes and systems.

Although storage vendors are most focused on this niche, service providers such as IBM and Verizon Business also are tapping into this market. IBM is meeting e-discovery requirements through its Lotus FaceTime software and related services, while Verizon Business has an e-mail archival system due out the first half of this year.

These IT and telecom service providers will be competing against specialty houses such as Onsite E-Discovery, a leading provider of litigation support services to law firms and corporations in the United States. Other e-discovery service providers include BlueStar Computer Solutions and Litigation Logic.

All of these vendors are going after a big prize: e-discovery technology spending will top $4.8 billion by 2011, according to Forrester Research.

The updated Federal Rules of Civil Procedure solidify changes to e-discovery rules that have been emerging from individual cases.

To meet these new rules, CIOs must consider both their document retention policies and their data retention architectures.

"If you were to serve a discovery request on an individual, it’s not that big of a deal because they might have one computer at home. But if you were to serve on IBM and ask them for all of their e-mails related to this one issue, what does a company do? This is a huge issue that corporations have to address," explains Phil Fowler, e-discovery expert and partner with Bingham McHale in Indianapolis.

Fowler says IT executives need to have a game plan for when litigation occurs and they are hit with an e-discovery request.

"IT people need to understand their information architecture, their computer networks and systems, so they understand where information is created, where it is stored and how it is stored including backup tapes," Fowler says. "That’s going to be critical for understanding the costs and methods of complying with an e-discovery request."