More and more companies are faced with the challenges of dealing with e-discovery in the cloud, which, in a general sense, is electronically stored information that exists outside of a company's firewall. In a sense, a company that has a network provided by a third party is in the cloud.

In the early days of e-discovery these arrangements caused some pain because the contractual terms often did not contemplate frequent need for small and large discovery projects. Companies found themselves negotiating for pricing to access their own data in ways that had not been contemplated, with an incumbent vendor that had not planned for the people, process or technology needed to accomplish what the company needed. Many of the newer forms of cloud computing also were not created with e-discovery in mind and they generate the same kinds of problems for companies.

These days, companies may be struggling with any number of cloud-based services—from third-party email services to social media such as Facebook, Twitter, or LinkedIn. Such cloud data is dynamic and rapidly changing and, therefore, presents preservation and collection problems similar to internal email and instant messaging. However, unlike internal systems, there is the added complexity that the company does not control how the outside systems operate, and neither the users nor the cloud service providers have seriously contemplated the needs of e-discovery. They lack the needed ability to access, preserve and collect data needed for litigation.