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The eDiscovery Paradigm Shift

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Monday, January 28, 2008

ELM Appliances are First Sign of Falling Costs for eDiscovery

As the namesake of this Blog suggests, the litigation market is in the throws of a major paradigm shift. Most markets that go through these shifts find that consulting fees charged by the early experts seem excessive. But, they are willing to pay these fees for as long as they can produce the required results. A good example or point of reference are the consulting fees that website development firms were able to charge when we were going through the "bricks to clicks" paradigm shift and everyone wanted to get their business on the Web.

Following tradition, when the changes in the FRCP in December of 2006 set the federally sanctioned groundrules for handling ESI, eDiscovery consulting firms filled the need and siezed the opportunity to charge "premium fees". Don't get me wrong, I am not some anti-capitalist passing judgement on economic results of the open market and calling for government intervention and price controls. I am merely pointing out that there is a well defined and historcially proven cycle that technology markets go through during major paradigm shifts. And, part of this cycle enables both premium consulting fees and in some cases premium costs associated with new and required technology.

This all being said, just as technologist came to the rescue of the website development market by automating standard and mundame tasks thereby reducing the overall cost of development and deployment, I beleive that Evidence Lifecycle Management (ELM) appliances and related technologies from such vendors as WorkProducts ( are being initially introduced and sold with a Total Cost of Ownership (TCO) and Return on Investment (ROI) model that includes automating the standard mundame tasks that were previsouly being done by $400 per hour eDiscovery consultants.

These mundame tasks include such things as managing the location of employee data sources and therefore easily and automatically enabling the collection of data from multiple data sources such as PSTs from multiple servers in mutliple locations for specific custodians for specific dates and or other routine search tems. This is certainly something that an eDiscovery Consultant could do for $400 per hour. And, if an organization only has 1 or 2 potential matters per year to consider, it may be more financially feasible to hire the consultant.

However, if an organizaiton has the expectation of many potential matters per year, the appliance financial model can't be beat and once in place will probably even enable the organization to address very small matters that they just plain settled in the past because it cost less to settle than to hire the consultants to figure out the merits of the case.

So, am I predicting the collapse and early demise of the very lucrative eDiscovery consulting market? Not at all.

With the rapidly increasing introduction of technology to manage the mundame and standard tasks, eDiscovery consultants can continue to own the more difficult to automate and demanding tasks such as finding deleted data, searching for data needles in enterprise haystacks and positioning themselves for the next paradigm shift and related opportunities.

It's a great system with room for everyone. Consultants support the innovators and early market adaptors by investing the time and resources to figure out what has to be done and how to do it. Hardware and software Technologists then step in and automate these processes and reudce the costs for the mainstream market buyers. And together, they move from paradigm shift to paradigm shift fueling our economies ability to continue to grow through the introduction of new technology.

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