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The eDiscovery Paradigm Shift

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Wednesday, November 18, 2009

Do Lawyers Need eDiscovery Certification?

It was reported by those in attendance at the Advanced E-Discovery Institute 2009 held at Georgetown University on November 13, 2009 that a panel of federal judges discussed whether eDiscovery certification should be required for lawyers. Reports from the meeting indicate that, with perhaps a lone exception, the judges collectively agreed that such certification was unnecessary. I have to agree. No eDiscovery certification is necessary…for the lawyers.

The law involving eDiscovery, though emerging, is not very complex. The responsibilities of lawyers in the eDiscovery process is but a subset of overall ethical standards for lawyers, including Competence (Rule 1.1), Diligence (Rule 1.3), Candor to the Tribunal (Rule 3.3) and others. It is also a subset of other discovery obligations that arise from court rules, case law, statutes and other regulatory obligations. Handling eDiscovery should cause litigators and corporate counsel great pause and concentrated attention, but knowing and following the rules of the game are all that is necessary. Lawyers can get up to speed by attending CLEs, reading case law and learning from each other the proper ways to handle a case.

What is really needed is certification for the technology vendors. How does a lawyer, corporation or government know whether they can trust a particular vendor? It is not the lawyer but the technology vendor or client's IT department that must ensure that the ESI collection and preservation is ultimately done correctly. The lawyer must ensure that ESI is preserved, that a vendor is selected that will do the job correctly, that the process is legally defensible, and that the ESI can be admitted as evidence and meets the discovery requests. However, the lawyer is not the one doing the preservation, collection, analysis or processing of the ESI. Lawyers are not expected to do computer forensics on a hard drive! All of this work is done by IT personnel that are hopefully highly trained and competent in what they do. At least that is why we pay them to do this work. It would be great to know that if a vendor has certain qualifications or certification that they will be qualified to do the job.

Lastly, not only is eDiscovery certification not necessary for lawyers it'll never take hold. Lawyers get their "certification" by going to law school, passing the bar, and gaining experience. In no other legal field (with the exception of patent attorneys) is any other "certification" required or demanded. Then why would it be necessary for eDiscovery? In such complex fields as tax, securities, business transactions and litigation no special certification is necessary. eDiscovery is a subset of GRC and discovery obligations and not legal specialty unto itself.

Let’s push for certification for the techies!

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Ready or Not: Cloud Computing is Comming to eDiscovery

Today, as I read a really great Blog posting by Jim Ericson on the Information Management Blog site titled, "Clouds: Both Sides Now," I was reminded of how, a couple of months ago, I got aboslutely slammed on my prediction that eDiscovery was ripe for Cloud Computing and the Software-as-a-Service (SaaS) delivery model for eDiscovery applications.

I was told that, "serious corporations will never let their data outside the firewall." And, it was made very clear to me by more than one commenter that serious General Counsel and outside litigators were certainly not going to allow the sensitive data from these serious corporations to be processed, stored, reviewed and then produced for trial outside the hallowed firewall or outside the supposedly secure data centers of the eDiscovery elite firms. I even had one comment that told me take my fancy leading edge technology somewhere else because, "it just doesn't belong in the legal market."

Anyway, that could be. But probably not!! Just as the rest of the world, (outside the hallowed firewalls) is finding out, cloud computing may be just what is needed to solve alot of the problems associated with the accellerating rise in the amount of Electronically Stored Information (ESI).
  1. Cloud Computing provides a really cost effective way to archieve ESI
  2. Cloud Computing enables the financial costs of really great data centers to be spread across multiple corporations making affordable for all.
  3. Software-as-a-Service (SaaS) applications enable "the masses" to get access to really great functionality at an afforable price.
  4. Etc, Etc., Etc. (you all know that benefits)

So, once again, it is time for Cloud Computing and SaaS based applications to take their rightful places at the head of the class for next generation eDiscovery solutions. Whether it's email archieving, ESI storage, Early Case Assessment, ESI Analystics, EDD processing, ORTs, Project Managemenet, eDiscovery Workflow or any of the mainstream eDiscovery Solutions, Cloud Computing and SaaS based architectures are the way to go. So, bring on the objections and the complaints and the "no ways". Because this time, I am ready to respond in kind with case studies, financial arguments and whatever else I need to bring to make my point.

Jim always provides a good mix of humor and serious commentary and this posting is no exception. The full text of Jim's post is as follows:

So much messaging on cloud computing has been slamming my inbox lately that I’ve been tempted to tune out, but of course I cannot. I do believe that in the next few years we will reach a tipping point that will touch a lot of IT plans and map a destiny for entrepreneurs.

Over time, cloud computing might do to captive IT what iTunes did to CDs, but in corporate technology, we've rarely seen such a consumer-like gold rush. With everyone behaving so hip and game changing, you can almost smell a cloud TV reality series coming soon. This week alone there’s a Web 2.0 conference and the big Interop event in New York and DreamForce in San Francisco that will probably draw 25,000 people between them. If you’re bored with your inlaws, you can head to Singapore for a Thanksgiving cloud banquet next week.

No one is saying this is a fad or a bad thing or a bust. Six months ago I thought workers were chained to their desks and conferences were out for the year. But now that I am proven wrong, the big vendor industry still looks frustratingly pregnant, with everyone poised in coats and hats, waiting to rush to the hospital. From an outsider's point of view, a lot of vendor marketers are frozen in their boots to find that their messaging is coming true, and that they now have to fill in the blanks in their promises.

The mainstreaming has been under way for a good year. IBM has the only TV commercial on cloud computing I have seen so far, slick as an iPhone ad, more vague but equally portentous. This week, IBM also launched a petabyte-sized business analytics cloud for internal employees, one of those stories that show how much a vendor believes in an IT evolution. To their credit, IBM did very well in a similar internal launch of employee blogs and discussions. IBM's project is also open to customers, and claims their petabyte can contain 100 times the data held in the U.S. Library of Congress. As far as I know these are so far empty bytes, and I'll leave the punch line to others to compare that to our Congress's output of late.

That's why it doesn't surprise me that big software/hardware vendor cloud launches are so strident on message and short on detail. Peruse the messaging of IBM, HP, Oracle, Microsoft, their consultants and all the competitive big names, and see if you disagree. Even Amazon Web Services (AWS) won't speak directly about developments during their latest earnings calls or talk to reporters outside of infrequent press releases and summaries that arrive after business hours on a Friday night. (Now, that's something Congress is good at).

The heart of this evolution isn't servers, it's creativity. The flip side of the public clouds is that corporate experimenters, institutions and SaaS vendors are running all kinds of interesting experiments and production workloads, though most are not visible yet. More important, the open source group movements that gave birth to new business models such as Animoto stands to influence future investments of mainstream companies and startups. Turn a few brainiacs loose with open infrastructure, and some Ph.D. or startup genius will bury a Fortune 1000 company in data processing within a week. And if a simple correct business model proves true, it might well change a company's direction or win on its own with a few keen managers and a bit of investment.

You know the stork is circling when the financial markets jump into the game and pick the winners. Last week, Goldman Sachs put out a fat report complete with a “paradigm shift,” and, in their own branding, a “Techtonic” one. If Goldman’s picks turn out to be true, we can all go back to our desks because the incumbents winners listed are Accenture, Cisco, EMC, HP and IBM. Somebody has a lot of storage and blade servers to sell and configure.

Goldman's list of "disruptors" is a mix of familiar and unlikely names: Brocade, Citrix, F5, NetApp and Juniper, among others. I've never been good at stock picks but I always thought this was an important movement and that I was one of a couple dozen prescient writers when the industry started thinking seriously about this stuff a few years ago. If our foreboding was good instinct, we pushed the button too early and now we’re running out of clever headlines. Gestations can lose congruity when you’re watching events too closely, and we suddenly find ourselves in a slippery moment. Reporters and independent software vendors have this problem in common, we're always regaining our footing, perspective and timing.

Meanwhile, security, integration, networking and other expert skeptics are warning against the cloud with some justification. But even industry veteran Lou Agosta politely ate his words when retail giant Dollar General launched what might be the first reported enterprise data warehouse of its size, some 70 billion records, in the cloud.

My next leading indicator predicts we'll hit the true birth of cloud computing when someone comes up with a good industry cover-up conspiracy, as in RFID chips in dollar bills or cell phones that cause brain tumors. I have seen it before and so have may others. Once that kind of opposition arrives, we will be wheels down. I can only hope I have the right stories in hand when it happens, because it is happening pretty fast.

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Monday, November 16, 2009

Autonomy and IDOL are Too Expensive for Most Enterprises

I have been meaning to comment for some time now on Garnter's contention that, "Autonomy is not practical for smaller enterprises."

Fate would have it that this past week, while talking to the Chief Information Officer (CIO) of mid level Global 2000 enterprise, I was actually asked my opinion on the "true cost" of implementing Autonomy as the foundation for a Governance, Risk and Compliance (GRC) and eDiscovery proactive Electronically Stored Information (ESI) Management platform. My answer quickly moved the discusssion to the cost of implementing Autonomy's Intelligent Data Operating Layer (IDOL).

First of all, I want to state that the comment "Autonomy's vision for the value of its Intelligent Data Operating Layer (IDOL) at the largest enterprises and for strategically engaged OEMs remains irreproachable and exceptional. Its practical value in many smaller installations remains problematic, as it is a challenge to implement and adopt" that I am referring to came from a Gartner report released on July 13, 2009 by Whit Andrews, titled "Autonomy IDOL for Information Access: Effective for Strategic Use; Difficult for Smaller Implementations"

Back to my discussion, the annual sales for the company that this CIO works for is in the $5 Billion range and therefore has a rather hefty IT budget even in these troubling economic times. However, I was quick to point out that because Autonomy's solution sits on IDOL, it requires a multi-million dollar investment, a 12 month implementation plan and a team of IT professions to maintain. As such, my caution was that he not view it as a casual decision. And, moving my thoughts to companies in the less than $1Billion in sales range and smaller, I am hard pressed to see how the Autonomy solutions is even an option (And, know people that either work or have worked at Autonomy, I would suggest that would agree with this positioning).

As backup for my opinion, I also cited a Blog posting by Aaref Hilaly on August 31, 2009, titled, "When It Comes To E-Discovery, Beware Of IDOL Worship" and threw in the disclaimer that Mr. Hilaly was the CEO of Clearwell which has a somewhat competitive and much less expensive eDiscovery solution that competes with Autonomy.

The full text of Mr. Hilaly's post is as follows:

There is no greater euphemism than the word “strategic”. Whenever a company announces a “strategic acquisition“, you know it paid a ridiculous price which cannot be justified any other way; when someone does a “strategic deal“, it means the economics favor the other party; and, when someone says a product is good for “strategic use”, it means the product does not really work or deliver any value today, but might in the future. So it was with great interest that I read Gartner’s recent research note entitled “Autonomy IDOL for Information Access: Effective For Strategic Use; Difficult For Smaller Implementations“. The author is Whit Andrews, who is not only one of the most cogent observers of the electronic discovery market, but also articulate, erudite and given to occasional poetry-writing. So the nuance of the word “strategic” is not lost on him.

IDOL, which is the underlying technology behind Aungate, is a powerful, flexible, extensible platform. But it only works if you spend several millions of dollars on software licenses, and dedicate a full-time team of at least 3 people to maintain it. Autonomy has sought to address some of these issues with a lower-priced package called Retina, but you’d be hard-pressed to find any successful implementations of it.

So, who IS using Autonomy and powering the company’s strong financial performance? And what are they using it for? The answer, from my own experience, is very large companies and government agencies that make multi-year, multi-million dollar commitments. In return, Autonomy becomes a “strategic partner”, an extension of a customer’s in-house IT team, and works closely with them on installation and customization. Typically, the product is used for large scale, complex, enterprise search, and proactive information management.

Like all of us, Autonomy is a product of its time. Started in the late 20th century, it is a traditional enterprise software company, like Siebel or PeopleSoft, which offers a product which is powerful, flexible, but expensive, hard to use, difficult to implement. By contrast, modern 21st century web-applications, like or Netsuite, come from the opposite end of the spectrum. They make simplicity, and ease-of-use their design center, and seek to offer the subset of functionality you really need at a small fraction of the cost of traditional software.

From a customer perspective, either can work – it’s all a question of what you want. Are you more comfortable with an easy-to-use, quick-to-deploy, low-cost web application for e-discovery, or do you place “strategic value” on the flexibility and infinite customization of traditional software? This note from Gartner will help you make the right decision.

So, I got my chance to talk about this issue. However, since I am actually much more interested in this topic, over the next couple of months, I plan to try and find some real financial data and true comparisions. Clearwell is definitely one of the less expensive next generation competitors to the eDiscvoery part of Autonomy.

However, there are many many more and even new eDiscovery solutiuons on the market. As an example, you are going to start hearing about Venio Systems who has an exciting new Early Case Assessment Tool (ECA) that will compete with Clearwell and therefore by Clearwell's own definition, compete with Autonomy. I plan to provide a complete review on Venio Systems and other next generation ECA tools in the weeks to come. If anyone would like to submit their ECA product or a case study of the cost of implementing either Autonomy or one of the next generation ECA solutions, I would be more than happy to publish them.

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eDiscovery Jumping Back In-House

Beyond vendor predictions and the ancedotal evidence, analyst spending reports and surveys are now begining to indicate that eDiscovery is jumping back in-house.

Gartner predicted that spending on eDiscovery software will grow to more than $1 billion in 2009, up 33 percent from 2008, with much of the spending comming from moving eDiscovery in-house. Bud­gets for man­ag­ing elec­tronic data tripled this year at average-​​sized U.S. com­pa­nies, accord­ing to a study, as busi­nesses braced for an influx of law­suits stem­ming from a reces­sion that’s been partly blamed on fraud. As I have reported on this Blog, I find Gartner's prediction of more spedning in 2009 to be reflective of what I am seeing in the industry worldwide as long as you view the increase from the perspective of increases in in-house IT spending to address the overall need to provide next generation document mangement infrastructure and Governance, Risk and Compliance (GRC) with support for eDiscovery being a willing benefactor.

To add even more credibility to the arguemnt, in addition, a recent survey by Kroll Ontrack Inc indicated in that com­pa­nies spent about $1.29 mil­lion each on man­age­ment of elec­tronic data this year, com­pared with $437,000 last year, accord­ing to the sur­vey by con­sult­ing com­pany.   That is almost a 300% increase. The data, released  in late October 2009, were based on inter­views in June, July and August with in-​​house lawyers and tech­nol­ogy spe­cial­ists at 231 U.S. and 230 U.K. companies.  Again, most of this additional expenditure is probably not showing up as an increase in spending on eDiscovery.

The most recent evidence was reported on November  16, 2009 on the NearShore Journal Site in a press release by Clearwell tittled "Survey Finds 73 Percent of Enterprises Plan to Bring E-Discovery In-House in Response to Rise in E-Discovery Requests".  In the press release, Clearwell announced findings from a survey conducted in partnership with analyst firm Enterprise Strategy Group (ESG). The survey, titled “Trends in Electronic Discovery: A Market Perspective” quantifies both the rise in e-discovery and litigation over the past year. Additionally, the survey findings reinforce the need for increased enterprise readiness to manage the expected growth in volume of cases in 2010.  This is probably the most eDiscovery centric indication of the increase in spending as I would assume that Clearwell was looking for evidence that corporations were spending more money on Early Case Assessment (ECA) solutions

I realize that not everyone in the eDiscovery industry is seeing these trends and reaping the rewards of this increase in speding.  However, the spending is real, it has just jumping in-house and may not be listed under a line item called eDiscovery.

Prediction: With the impdening crash of the worldwide commerical real estate market and the subsequent institutional  failures and eventual legal actions, I see 2010-2012 being even bigger. However, it is not clear if these will be handled in-house or by law firms.  I think that this may be one last bite at the eDiscovery processing apple outside of the corporation.

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