I usually take  Saturdays off, but this great post from Greg Bufithis of The Posse List about the release of the Valukas Report and Lehman Brothers collapse was well worth mentioning.

Here is a quick summary:

There is extensive media coverage of the report so we won’t labor through all the deails, and as we have previously reported there are a large number of civil lawsuits and government investigations underway, all  employing a boatload of contract attorneys, accountants and forensics specialists.  Preparation of the report required 70+ contract attorneys.

But in summary, the big item is the revelation of a particularly aggressive accounting practice, known internally as “Repo 105” that Valukas said helped the investment bank mask the true depths of its financial woes.   Over hundreds of pages,  Valukas details the genesis of and the process behind Repo 105.  Based on standard repurchase agreements — short-term loans commonly used by many firms for daily financing needs, in which borrowers temporarily exchange assets in return for cash up front — Lehman took a particularly aggressive accounting approach to these transactions.   Here, the investment bank used repos to temporarily park assets off its books to make its end-of-quarter debt levels look better than they did — while calling them sales instead of loans.

So, no problem right? All they have to do is find a few lawyers to sign off on this. Well, that proved to be a little more tricky than they expected. Score one for the Americans!

One catch.  According to Valukas, no American law firm would sign off on its use.  Enter Linklaters (a highly respected British law firm) who gives Lehman the answer it wanted: solong as the repos were conducted in London through the bank’s European arm, and so long as the company took other cosmetic steps to make these transactions appear to be sales instead of financings, Linklaters determined that they would pass regulatory muster.

So what does this have to with e-discovery? See for yourself on the flip side of the universe.

Greg’s post goes in to much more detail regarding the actual review of the all of Lehman’s emails and other documents, but here is the jist:

In total, the Examiner collected in excess of five million documents, estimated to comprise more than 40,000,000 pages. All of these documents have been converted to electronic form and are maintained on two computerized databases, Stratify and CaseLogistix.

Documents were reviewed on at least two levels. First level review was conducted by lawyers trained to identify documents of possible interest and to code the substantive areas to which the documents pertained; those so identified were subjected to further and more careful review by lawyers or financial advisors especially immersed in the earmarked subjects. In order to reduce the cost of review, the Valukus sought and obtained the court’s approval to retain contract attorneys.  A group of more than 70 contract attorneys, supplemented by Jenner & Block attorneys, conducted first level reviews.

All second level (and beyond) reviews were performed by Jenner & Block attorneys or Duff & Phelps professionals.  Valukus estimates that he has reviewed approximately 34,000,000 pages of documents in the course of his investigation.

5 million documents comprising roughly 34, 000,000 pages.  Yup, it looks like Stratify and Caselogistix came out on top of this one.  Again, I think this is a must read post. Check it out when you get the chance.