In other words, attorneys will now be required to know how the company's entire electronic data processing system works. According to Trent Dickey, a litigation attorney at Sills Cummis Epstein & Gross, this puts IT directly on the firing line.

"Outside and inside lawyers [must become at least somewhat] proficient in computer information systems," Dickey says. Under the new rules, he explains, during the pretrial conference, company counsel will be required to describe, in detail, all data retention practices, discovery protocols, and preservation processes -- plus exactly which data is accessible, which data isn't, and why.

This is the most challenging hurdle that a company will face in litigation under the new rules, according to Deidre Paknad, president and CEO of PSS Systems, an ISV that creates software to help businesses manage the e-discovery and compliance process. She says the new rules make the e-discovery process more crucial than ever.

"Companies that can prove they made a good-faith effort won't see the brutality of a judgment like that made ," says Paknad. In that case, the company was hit with US$1.45 billion in damages because the judge and jury believed Morgan Stanley had not made a good-faith effort to discover relevant data.

The biggest risk, says Paknad, is misrepresenting your company's data. If the company isn't fully aware of exactly what it has and where it is, and relevant material is uncovered later, as happened in the Morgan Stanley case, the company will find itself in extreme legal jeopardy.