Computer forensics firms get boost from new evidence rules
Date: March 24, 2008Source: Crainsdetroit.com
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It's not the Emmy Award-winning “CSI: Crime Scene Investigation,” but computer forensics holds a growing lure for law firms and human resource directors investigating workplace disputes.
Driving some of the growth are new amendments to the Federal Rules of Civil Procedure, which took effect about a year ago. The new rules address standards of evidence for “e-discovery,” or electronic records that are admissible for civil cases in federal courts.
It's a growing niche for the Center for Computer Forensics in Southfield.
CCF has reported revenue growth of 30 percent or more each year since 2004, with referrals from local law offices, but more coming directly from client firms.
Revenue was nearly $700,000 in 2007 and is projected to reach $920,000 this year, based on that rate of growth, said Michael Ahern, vice president of business development at CCF.
“Our growth is going to go up partly because of the attention people have to pay now to the new rules of evidence in the federal system,” Ahern said.
“And we expect the Michigan judicial system will also change its rules on electronic evidence within a year. Attorneys need to know how to handle this evidence properly,” he said.
The CCF has five employees, mostly former law enforcement officials with some background in computer crimes and electronic investigation, although Ahern said much of the company's caseload involves intellectual-property disputes, theft of trade secrets, employee misconduct and civil claims.
A smaller part of its business involves sexual harassment in the workplace, Internet pornography on work computers and some criminal investigation work by contract with Kent County.
“A lot of times, we get word from an employer that might have just fired an employee and we're expecting a dispute or something that might come up, so we need to preserve evidence from the time of a person's employment,” said Ives Potrafka, senior forensic examiner at CCF. “Or, we might hear that they feel they have a set of reasons to fire someone, and now we need to prove it (before they proceed).”
Much of the company's caseload comes from local law firms, such as Miller Canfield Paddock and Stone P.L.C. or Johnson Rosati LaBarge Aseltyne &Field P.C.
Potrafka also testifies in court on cases where the company has researched computer files and electronic data — including the 2005 murder trial of Paul Bernard, now serving life in prison.
At issue in that case was the timing of the death of Bernard's estranged wife, Mimi, since electronic records showed he was logged on by modem to America Online for the entire night.
But Potrafka was able to show that no user-driven online activity occurred during the approximate time when prosecutors believed the defendant killed her.
J. Stott Matthews, president and owner of Spectrum Computer Forensics and Risk Management L.L.C. in Franklin, said his small company sometimes competes with CCF, but the market is growing enough for both companies.
“We understand their reputation and the quality of their reporting. But I have 15 years of prior management experience in (automaker and) supplier firms, and they are mostly made up of former law enforcement guys,” he said.
“There's nothing wrong with that, but some clients may feel more comfortable with them and some prefer to deal with someone like me, who has been in the positions and faced the same challenges they do.”
The Center for Computer Forensics was founded in 1997 as an offshoot of Southfield-based Data Recovery Group, and also is co-owned by DRG owners B. Patrick Ahern, his wife, Deanna, and son Brian, Michael's brother. DRG was started in 1987 and now has offices in Southfield, Chicago, San Leandro, Calif., and Charlotte, N.C.
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