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Current Status of eDiscovery and Governance, Risk and Compliance (GRC) Markets

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Monday, August 31, 2009

Current Status of eDiscovery and Governance, Risk and Compliance (GRC) Markets

About a month ago, I had the opportunity to be the keynote at a small luncheon of legal and Information Technology Professionals in Chicago, Illinois and discuss my thoughs about the current status of the eDiscovery and Governance, Risk and Compliance (GRC) markets. Following is the press release that provides a summary of the highlights of that speech:

Chicago, Illinois - August 31, 2009 (PRWeb) - eDiscovery Solutions Group announced today that Charles Skamser, the company’s Founder and CEO, spoke on the current status of the eDiscovery and Governance, Risk and Compliance (GRC) markets at a Chicago area luncheon for litigators and global information management professionals on July 31, 2009.

Mr. Skamser, Founder and CEO of eDiscovery Solutions Group, started out his speech by listing what he called, “the known truths about Governance, Risk, Compliance (GRC) and eDiscovery.”

- eDiscovery is not that complicated
- eDiscovery is too expensive
- eDiscovery will be brought back into the IT departments of the Global 2000
- There will be a convergence of eDiscovery and GRC technology and management
- Most eDiscovery and GRC solutions will be cloud based in 10 years

Mr. Skamser went on to talk about how the increase in the volume of Electronically Stored Information (ESI) has perpetuated the dawn of a new technology era in litigation.

“Even though most lawyers ignored the advent of the integrated circuit and the subsequent introduction of the personal computer in the 1980s, evidence collection and processing has been slowly going through a paradigm shift from paper based evidence to electronic evidence,” stated Charles Skamser, Founder and CEO of eDiscovery Solutions Group. “However, with the accelerating volume of Electronically Stored Information (ESI) surpassing anyone’s expectations, it is now fool hardy for even the most stayed and cautious litigator to not realize that the game, and more importantly the technology of litigation, has changed,” continued Mr. Skamser. “As a result of this eDiscovery paradigm shift, it is time for the Global 2000 to get serious about managing ESI for eDiscovery and GRC,” stated Mr. Skamser.

Mr. Skamser went on to claim that the attempt by law firms and many litigation service providers to utilize eDiscovery technology has failed and as a result corporations worldwide are bringing eDiscovery processing in house.

"Over the past three years, I have heard a common message of dismay from many of the partners from the top litigation law firms in the country,” stated Mr. Skamser. “This common message of dismay is that they went to law school and either started a firm or joined a firm to practice law. And, one morning, several years ago, they all woke up and found themselves managing a technology company. It is my opinion that we would all be better off if lawyers and law firms went back to being lawyers and let the technology experts handle the technology,” added Mr. Skamser. “The lawyers would be happier; the technologist would be happier; and, most importantly, the clients would be happier,” stated Mr. Skamser

Mr. Skamser next contended that eDiscovery is too expensive.

“A really good litigator is probably worth $400 or more per hour when engaged in defending your company in a multi-million dollar matter.” stated Mr. Skamser. “However, beyond the dynamics of the free market economy, I have never been able to justify spending $2,000 per gigabyte to find the ESI that is required to respond to a request. Further, I have found very few litigators and corporate counsel that could even explain what exactly it was that they were getting for their $2,000.”, continued Mr. Skamser. “The overall cost of identifying, collecting, processing, reviewing and producing ESI has come down in the past 12 months. However, it is still way too high and still excludes many if not most from the legal system,” contends Mr. Skamser. “Armed with a better understanding of what eDiscovery technology does and what it should cost along with a new crop of cloud based vendors with a much lower cost of production that are willing to challenge the current cost structures, I predict that the cost per gigabyte to process ESI will fall below $100 in the coming years,” predicts Mr. Skamser. “At some point, you should be able to push a couple of buttons and get a report on the electronic evidence that you need to better understand and, if required, support your matter,” added Mr. Skamser.

Mr. Skamser next spoke about the technologies that he believes will survive and thrive in the new eDiscovery and GRC marketplace.

"In general, when an industry goes into a paradigm shift, chaos irrupts and creates opportunities for new technology and new players to emerge. And, this is exactly what we have been seeing in the litigation services, eDiscovery and GRC market,” stated Mr. Skamser. “Up until 2007, there were only few major technology players in the litigation services space and because there wasn’t much competition, the market pretty much gave them a pass and allowed them to get by with peddling out of date and inferior technology at very high prices. Further, there was very little integration between the various core component technologies required to process data,” added Mr. Skamser. “This was great for the vendors that had a strangle hold on the market. But, not so good for clients and not so good for the industry as a whole.” “This all began to change in late 2007 about the same time that the changes to the Federal Rules of Civil Procedure went in to effect. I believe that it was a coincidence that this all happened at about the same time. However, the changes to the rules may have at least added some creditability to the notion that dealing with ESI was going to be much different than dealing with paper.”

Mr. Skamser went on to predict that there would be a convergence of eDiscovery and GRC technology.

“Given the requirement that both eDiscovery and Governance, Risk and Compliance (GRC) need to have access to all of the ESI that an organization creates; and, given the fact that both eDiscovery and GRC need to be able to examine and act on the most granular ESI available; and, given the fact that it is much more efficient in both eDiscovery and GRC to be proactive instead of reactive, I predict that eDiscovery and GRC technology will converge into a single integrated solution,” predicts Mr. Skamser.

Mr. Skamser went on to predict that Software-as-a-Service (SaaS) and cloud based computing will become the technology of choice for both eDiscovery and GRC.

“Regardless of what many of the so called industry experts are saying about the dangers of cloud computing and SaaS based solutions, the security sky isn’t falling. And, I predict that within 5 years most, if not all eDiscovery and GRC solutions will rely on SaaS and cloud based computing infrastructure,” stated Mr. Skamser. “There is just too much technical and investment momentum for it to go any other direction. So, although I am not a investment guru, I would suspect that an investment in anything SaaS and/or cloud based for eDiscovery and/or GRC will end up paying big dividends,” added Mr. Skamser.

Mr. Skamser next commented that he believes that the technical support of eDiscovery and GRC will become the responsibility of the information technology groups within the enterprise.

“Litigation services and now eDiscovery have created a financial boondoggle for law firms and litigation and eDiscovery service providers throughout the world over the past five years,” contends Mr. Skamser. “As a result, the cost of eDiscovery has remained high and there has been a real disconnect in expectations between clients, outside counsel, general counsel, internal IT departments and the service providers,” added Mr. Skamser. “Further, when you put into perspective the fact that the average multinational corporation faces more than 150 lawsuits per year, eDiscovery. Add to that the fact that corporations collectively spent several billions of dollars on electronic review and you have an issue that requires watching. It becomes crucial to better understand these processes and to learn where you can cut costs effectively. As a result, I predict that that technical support and management of eDiscovery and GRC will become the responsibility of the information technology groups within the enterprise with General Counsel having more direct responsibility and outside counsel taking on more of a consulting role,” continued Mr. Skamser. “This doesn’t mean that the litigation services, eDiscovery technology vendor and eDiscovery consulting market is going to go away. It just means that they are going to take on more of a consultative role supporting the internal operations of the enterprise,” added Mr. Skamser.

Mr. Skamser next spoke about his views of the current contraction in the number of players in the eDiscovery technology vendor community.

“Although I didn’t have any more than experience from other technology industries, personal observation of the litigation services industry and anecdotal evidence to back up my claim, I predicted early last year that as with any other technology industry that is in a throws of a paradigm shift, the eDiscovery technology and services market would suffer aggressive contractions with mergers, acquisitions and a large number of vendors going out of business,” stated Mr. Skamser. “Late 2008 and 2009 have proven my prediction correct as litigation services and the eDiscovery technology industry have both been hit hard by natural contraction and the downturn in the economy. And, even though most of the companies that took hits during this contraction would contend that it was due to the downturn in the economy, I contend that the eDiscovery market as a whole is actually still expanding and therefore any casualties had old technology, lack of industry understanding, poor customer service or all of the above to blame for their demise,” added Mr. Skamser. “And, even though I have my doubts about the theories of evolution in general, the current state of the eDiscovery market is s perfect example of survival of the fittest. As a result, we are now entering a time when the options will be the best of what’s left,” continued Mr. Skamser.

Mr. Skamser next indicated that industry wide standards and professional certifications would be the key to the long term stability and success of the eDiscovery and GRC markets.

"Having spent most of my career helping IT professionals from the Global 2000 utilize leading edge and disruptive software technology to attain business objectives, I am very familiar with the power of industry standards and professional certifications,” stated Mr. Skamser. “The quicker the leaders from within the eDiscovery and GRC markets establish and enforce both standards and certifications, the quicker we will begin to see a normalization effect that will enable the entire industry to move forward in a more coherent way,” he continued.

Mr. Skamser finished his speech by indicating that, although there is lots of chaos and a shortage of answers, it is a very exciting time to be involved in the eDiscovery and GRC markets.

“I hope that my speech today didn’t paint a negative picture of eDiscovery and GRC or leave you confused in regards to how to successfully navigate the rough waters of eDiscovery and GRC,” stated Mr. Skamser. “On the contrary, I hope that you are encouraged by the prospects of what lies before us and can see the light of success at the end of this tunnel,” added Mr. Skamser.

About eDiscovery Solutions Group
eDiscovery Solutions Group is an international consortium of leading independent eDiscovery consultants, eDiscovery consulting firms, regional litigation service providers and best-in-class eDiscovery technology companies that have come together to provide all of the services, consulting and technology necessary to support the entire eDiscovery lifecycle for the legal departments of corporations, the IT departments of corporations that need to support eDiscovery requirements and litigation centric law firms.

With a growing consortium of partners worldwide, eDiscovery Solutions Group offers a broad array of eDiscovery consulting, services and technology along with project management to support the entire eDiscovery lifecycle. Following the eDiscovery processing paradigm of the Electronic Discovery Reference Model (EDRM), eDiscovery Solutions Group has developed an eDiscovery best practices framework that includes consulting, collection, analysis, processing, production, review and presentation.

Within this framework, the eDiscovery Solutions Group can deliver data retention policy, development, data archiving, eSecurity, eCompliance, eDiscovery readiness, strategic planning, implementation support, paper and ESI collection, investigations, expert testimony, data recovery, computer forensics, early case assessment, data analysis, data redundancy management, conceptual search, de-dupe, near de-dupe, scanning, copying, coding, language translation, EDD, TIFF conversion, hosting, on-site, on-shore and off-shore review, legal process outsourcing (LPO), courtroom graphics and presentations, tool training, systems integration and custom solutions. For more information about eDiscovery Solutions Group, please visit: http://www.ediscoverysolutionsgroup.com/.

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1 Comments:

At September 23, 2009 at 4:11 AM , Blogger jmnthi said...

Very nice article with lot of information about the eDiscovery and GRC(Governance, Risk management and Compliance). Here they have discussed a lot about the same. From the above post we came to know that the Governance, Risk management and compliance (GRC) will be the responsibility of the IT groups within the enterprise.

-PSI

www.theGRCSummit.com
www.gsmiweb.com

 

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