Electronic-discovery tools typically convert documents to a common data format for viewing but carry with them important metadata, such as when and where they're created. Documents can be searched using keywords, then categorized into subsets. For example, a legal team providing documents to the opposing side could hold back all documents marked confidential and irrelevant.

Prevail also can be used for government agency investigations and the due-diligence process of mergers and acquisitions, Fios president Richard Lazar says.

"These are interesting times, a time when corporate information has become more and more important in a legal context," Lazar says, referring to recent business scandals involving companies such as Enron and WorldCom.

Just last week, lawyers for businesswoman Martha Stewart delivered 1,000 pages of E-mail and phone records to a House investigative panel that's examining her sale of ImClone stock. "Corporations generate huge amounts of electronic information for business purposes," Lazar says. "It

isn't stored in a way that makes it easy to use for legal purposes. That's where companies like ours come in."

Some electronic-discovery software is designed for individual use, but Prevail was designed for use by groups. "Our tool fits right into a law firm's workflow process to let them review large quantities of data quickly," Lazar says.

It may sometimes make more sense for a law firm to hire a company that provides electronic-discovery services, rather than buy the technology. Firms need to evaluate what makes the most sense for them, says Bawden at Sidley Austin Brown & Wood. "This technology is changing at breakneck speed, and now the services are really fancy and have lots of options."

But even though security might be a concern when sending documents outside, Bawden isn't worried. His firm has conducted extensive security reviews with the services vendors he has used, and good security seems to be standard among them. Says Bawden: "Any vendors worth their salt can stand up to a review like that."