To help manage possible e-discovery requests, the city is setting up a document management system using Compulink Management Center Inc. 's Laserfiche document management system and Hewlett-Packard Co.'s Reference Information Storage System. The goal is to help employees keep track of documents and get rid of those they don't need, Wolf said.

Wolf has also set up new internal rules forbidding the use of instant messaging and Web-based e-mail that can't easily be archived and tracked. "We have IM turned off. We don't let them use private e-mail," he said.

Bace said that "organizations need to look at how implementing records management can help corporate performance. They need to use it to some business advantage, and not just as a business device."

The alternative is costly, Paknad noted. Previously, "it didn't cost you tens of millions if you screwed up," she said. "Now it will."