Few hedge fund managers spend adequate time proactively considering the risks associated with electronic discovery (e-discovery) before they face a lawsuit or an investigation.  Then, when it is too late to be proactive, managers typically scramble and over-collect data, substantially increasing their e-discovery costs, or they miss data, leading to claims of spoliation and sanctions.  See “Pension Committee Case Highlights Obligations of Hedge Fund Managers to Preserve Documents and Information in Anticipation of Litigation,” Hedge Fund Law Report, Vol. 3, No. 6 (Feb. 11, 2010).  While hedge fund managers have limited control over whether their funds or management companies are sued or audited, managers can adopt best practices that will help manage the risks and costs associated with e-discovery.  In a guest article, Jon Resnick, worldwide vice president of field operations at Applied Discovery, and Monte Mann, a partner at Novack and Macey LLP, describe nine categories of actions that hedge fund managers should take, and two categories of actions that hedge fund managers should avoid, to develop a sound, defensible e-discovery strategy.