$1.2 Billion eDiscovery Market by 2014

A press release as posted on Marketwire on October 11, 2010, indicates that a very recent study by The Radicati Group, titled, “eDiscovery Market, 2010-2104”, predicts that the eDiscovery market will reach $1.2 billion in sales by 2014.

This is considerably less than the $2.8 billion market size for 2009 as indicated in the The 2010 Socha-Gelbmann Electronic Discovery Survey.

And, unless we assume no growth over the next few year, less than the $1.2 billion forecast by The Gartner Group earlier this year.

I am sure that there are differences in the exact revenues sources that these studies are looking at and also differences in statistical methodologies.  However, under I any circumstances, eDiscovery is a big market and I believe from personal experience that it should continue to grow.

Over the past 12 months I have talked to numerous CIOs and other “C” level information technology executives from the Global 2000 that have jumped into the eDiscovery discussion internally, added the requirements to their radar and expect to budget funds to cover infrastructure to support bringing some aspects of eDiscovery in-house.

According to a somewhat related study that adds an even more interesting twist to the expected growth and direction of the eDiscovery market,  The Cowen Group recently conducted a study of the AmLaw 200, the highest-grossing law firms in the United States, and found 87 of the 200 currently have internal eDiscovery practice groups.  According to David Cowen, founder of the Cowen Group, the results signify the importance of reliable eDiscovery solutions and practices for firms of all sizes and specialties.

The Cowen Group study goes on to state that many of the firms with practice groups reported that their current and prospective clients showed interest in their services due to the presence of the eDiscovery experts. However, the report also found a number of organizations with practice groups still do not have the adequate IT and human resources required to fully support the initiative.

"These findings are significant for corporations who require law firms with legitimate eDiscovery experience," said David Cowen, founder of The Cowen Group. "Many firms realized that they needed to establish an eDiscovery practice group to market themselves to savvy clients, but far fewer made the necessary investments in people, process and technology to develop a group with true eDiscovery expertise."

To improve the standards of eDiscovery use and practice, Cowen expects to release an essential guide for firms planning to implement practice groups.

Having talked to partners from most of the AMLaw200 over the past 12 months, my take is that they are seeing their corporate clients either already brining eDiscovery and associated activities in-house or planning to do so over the next couple of years.   I also have heard time and time again that many of these partners are pleased to see this trend as they never wanted to be in the IT business in the first place.

Summary Questions I have a few questions about the results these various studies:

1.  Is the eDiscovery market in fact growing?
2.  Who is buying? Is is the Global 2000 or the AMLaw200
3.  Are  per unit eDiscovery costs coming down?  And, if so, is the overall cost of eDiscovery going up because of the accelerating increase in the amount of ESI?

The full text of the Radicati Group press release is as follows:

The latest study by The Radicati Group, "eDiscovery Market, 2010-2014," offers an in-depth analysis of the worldwide market for eDiscovery solutions. The study includes market trends, vendor revenue market share, market size and four-year forecasts, and breakouts by region.

eDiscovery solutions enable organizations to identify, collect, analyze, process, and present data stored in various corporate repositories. The data may be collected in response to lawsuits, internal investigations, or regulatory compliance requests. 

eDiscovery solutions today range from custom-built for each individual customer, to pre-packaged solutions that work out-of-the box in less than an hour. About 80% of all eDiscovery solutions are deployed by legal departments of large organizations, and the remaining 20% by law firms. 

This study includes an analysis of leading players in the eDiscovery market, including: Anacomp, Autonomy, CaseCentral, Clearwell, EMC, Guidance Software, Iron Mountain (Stratify), Recommind, StoredIQ, Symantec, and others.

To order a copy of the study, or to subscribe to our market research services, visit our website at http://www.radicati.com/, or call Todd Yamasaki at (650) 322-8059 begin_of_the_skype_highlighting   (650) 322-8059 end_of_the_skype_highlighting.

About The Radicati Group, Inc. The Radicati Group is a leading technology research and advisory firm focused on all aspects of email, security, email archiving, regulatory compliance, wireless technologies, web services, instant messaging, unified communications, social networking, and more. The company provides both quantitative and qualitative information, including detailed market size, installed base and forecast information on a worldwide basis, as well as detailed country breakouts.

The Radicati Group works with corporate organizations to assist in the selection of the right products and technologies to support their business needs, as well as with vendors to define the best strategic direction for their products. We also work with investment firms on a worldwide basis to help identify new investment opportunities.

The Radicati Group, Inc. is headquartered in Palo Alto, CA, with offices in London, UK.

Labels: Autonomy, Clearwell Systems, eDiscovery, Gartner, Recommind, Socha-Gelbmann Electronic Discovery Survey, StoredIQ

posted by Charles Skamser @ 10:35 AM 1 Comments

Early Case Assessment (ECA) Moving to The Corporations

Many eDiscovery vendors and consultants have seen more eDiscovery work moving back to the corporations. And, based on surveys over the past 12 months and direct discussions with eDiscovery decision makers within corporations, most industry analysts have predicted that eDiscovery work is moving back to the corporations at an accelerating rate. Now, The Cowan Group has confirmed this trend through the results of its "Q1 Critical Trends Survey". Collecting responses from 47 major corporations on their current workload, as well as near-term plans for technical and talent acquisitions, The Cowan Group is reporting that 22% of the corporations that they surveys are expecting to in-source more eDiscovery work within the next 90 days.

According to The Cowan Group Survey, 15% of the 47 major corporation indicated that they planned to move more eDiscovery collections in-house within the next 90 days. 35% of the respondents indicated that moving Early Case Assessment (ECA) in house was a top priority. 19% of the respondents indicated that they were considering an investment in Clearwell and 10% indicated that they were anticipating an investment in Relativity.
It appears that the trend of eDiscovery moving back to the corporations is indeed true.

So, the last 3 quarters of 2010 should be really good for the eDiscovery vendors and consultants that are fulfilling the requirements of the corporate legal departments.

Labels: 2010 eDiscovery Predictions and Trends, Clearwell, Clearwell Systems, Early Case Assessment, ECA, eDiscovery, Relativity

posted by Charles Skamser @ 11:38 AM 0 Comments

Autonomy and IDOL are Too Expensive for Most Enterprises

Labels: Autonomy, Clearwell Systems, Early Case Assessment, ECA, IDOL, The Cost of Implementation, Venio Systems

posted by Charles Skamser @ 9:54 AM 0 Comments

eDiscovery 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.

Labels: Clearwell Systems, Early Case Assessment, ECA, eDiscvoery, in-house corporate counsel

posted by Charles Skamser @ 9:36 AM 0 Comments

Another Perspective on LegalTech New York 2009

As a follow-up to my February 4, 2009 post on LegalTech New York 2009 titled, "LegalTech New York 2009 Update", I am adding the following post from February 3, 2009 on Law.com's Legal Technology Blog, Titled, "LegalTech New Year". The review points out, as I did in my initial posting, that Early Case Assessment (ECA) was the big winner at the show this year, Software-as-a-Service (SaaS) was hard to ignore and also does an excellent job covering some of my favorite vendors and their new technologies including Index Engines, Kazeon Systems, Guidance Software, Mimosa Systems, StoredIQ, Clearwell Systems and RocketMatter.

The full text of the post is as follows:

The new year has come and gone on the Gregorian calendar. But the new year for legal technology is still in progress at LegalTech New York, where vendors are unveiling their new products and services and attendees are helping them celebrate.

LegalTech attendees should revel in the number of vendor initiatives aimed at reducing e-discovery costs from acquisition to review and production. And, like last year, EDD vendors continue to design and manufacture their products for international litigation. But LegalTech is not all about e-discovery. There were still plenty of vendors with products outside the Electronic Data Reference Model.

EDD PARTIES
Readers should be aware that Index Engines can access and extract data from tape and tape libraries, really fast. But now they can also extract data from network storage systems, file shares, forensic images, and hard drives and still provide users a single point of access to it -- via a Web browser. Index Engines first indexes data on disparate resources. Once the index is compiled, data can be deduped, searched, reviewed, and extracted on demand. Also note that Index Engines can now filter unwanted file types such as EXE, DLL, etc., during the indexing process to reduce the time it takes to review the data.
In preparation of the new year, Kazeon Systems introduced new pay-as-you-go pricing models that augment their current standard software licensing option and focus on case matters. Kazeon hopes the new pricing models allow customers to implement an e-discovery solution that does not require a major financial investment or lengthy rollout.

Vendors are starting to “go left” of the EDRM to provide organizations a better view of the end of litigation via early case assessment tools. In fact, KPMG promoted the concept with a T-shirt emblazoned with "go left." Toward that end, Daticon EED announced the availability of its Early Case Assessment service that integrates concept-search technology with Discovery Partner, an integrated processing, analytics, review, and production platform. Discovery Partner was also enhanced with an Image Conversion Server that stages production-ready images in anticipation of production. The image server aims to reduce the time it takes to convert images and make the process transparent to reviewers.

Leaning toward the "left" side of EDRM, I watched a demonstration of Guidance Software's EnCase Legal Hold, its new Web-based litigation hold and tracking solution. EnCase Legal Hold has a good point of entrance into the EDD market via EnCase eDiscovery. Guidance hopes the new product will allow customers to issue legal holds and correspond with custodians as well as track and report on the collection and processing of ESI -- all performed with EnCase eDiscovery. Using a single case database, users can issue litigation holds, track correspondence with custodians, monitor and enforce compliance with the legal holds, and track the progress of collection and processing of potentially responsive ESI.

E-discovery players that continue to go to the left side of EDRM are eventually going to meet those players that are moving into e-discovery from stage left. Enter: Mimosa Systems NearPoint. Mimosa started out providing e-mail and file archiving solutions to organizations. Now, it contains a full suite of features designed to automate information management to facilitate the identification, collection, and preservation of content, e-mail and files, based on policies. Endpoint: NearPoint aims to speed up the discovery process and reduce information collection times and reduce storage costs. And don't give me that story that storage is cheap argument unless you power your data center with solar or wind power.

Looking at LegalTech from an international perspective, Clearwell Systems launched Clearwell Mobile for cross-border litigation. The Mobile product is powered by Clearwell’s E-Discovery Platform and provides organizations the ability to “drop” a Platform in a customer’s foreign site and allow legal teams to perform e-discovery “in country,” where the data resides and local counsel are familiar with the foreign entity’s privacy laws. After data has been acquired and responsive data has been retrieved and redacted, it is sent back to the situs of litigation. The good news is that you can return the box after the job is completed, much like returning a rental car – for a one-time, low fee. The other good news: Mobile is fully Unicode compliant.

I watched a demonstration of Mobile at LegalTech. It supports English, Western European, Eastern European, and Asian languages. This multilingual support lends itself to Clearwell’s search technology in search previews, search filters, and search reports in cross-border cases. I witnessed a demonstration of Mobile as it provided automatic language identification to data sets and exacted document counts by language type. The Unicode support also allows users to easily tag documents in different languages and assign them to multiple reviewers.

Huron Consulting remains bullish on outsourcing to India with an announcement of an exclusive alliance with UnitedLex. The alliance will bring together approximately 1,000 domestic document review stations from Huron and 600 Indian-based sets aiming to reduce the costs of e-discovery. As the year progresses, however, and more U.S.-based attorneys in search of work are willing to engage discovery review, outsourcing to India may not be so appealing.

Now, if you wonder about security in your service provider, which you should, check out eMag solutions’ ISO/IEC 27001:2005 certification for its operation centers in the U.K. and the U.S. EMag is an international provider of e-discovery services and data and its ISO 27001 certification indicates that it provides guidelines to implement risk management processes and policies that ensure secure infrastructures. So, ask your service provider what risk management framework they use to set security controls that ensure the safety and confidentiality of your data.

StoredIQ announced that it has expanded its e-discovery solution to support Symantec Enterprise Vault as a recognized data source during the legal discovery process. That means Enterprise Vault users who use the StoredIQ appliance get two big benefits. One: Vault users will get access to a broad set of data sources, in addition to the e-mail archive. So instead of aggregating data from multiple sources and manually merging it with information from the Vault's e-mail archives, users will be able to facilitate e-discovery processing by using a single appliance. Two: Using the StoredIQ appliance as the single repository for collecting, processing, and preparing responsive data for discovery has the potential to reduce the time it takes to work across the EDRM and minimize the overall costs.

"BEYOND THE [EDD] PALE"
To list the number of vendors I talked to outside of the EDRM would exhaust me. But there are few worth noting. EasySoft, a provider of legal software to streamline document creation and workflow and eliminate repetitive tasks. They discussed their product lines with me that ranged from managing bankruptcy cases to calculating divorce financials and time and billing. They even have shrink-wrap software to help the family law and personal injury lawyer, but those are limited to New Jersey law.

LawProspector aims to live up to its name in litigation terms. It looks to provide access to critical data about the litigation marketplace in a Web-based, software-as-a-service tool built for litigation support and business development teams at major law firms. LawProspector offers views into the current and future litigation activities of lawyers, law firms, and corporations. What can you do with that? LawProspector says it can be used to evaluate lateral hires, monitor existing client litigation activities, and measure the litigation activities of competing law firms and potential clients. I will validate this in due time.

I also reconnected with Courtroom Connect at LegalTech, a provider of litigation support connectivity to law firms, litigation support firms, and court reporters. It was showing off it's Polycom videoconferencing tools for its Remote Counsel product. It is interesting to note that this company got its start from some Stanford graduates who wired California courthouses much like network providers today wire hotels -- and charge back for services.

Software as a service is almost as hard to ignore today as Web 2.0, especially for solo and small firm attorneys looking for a low-cost method of law practice management. Both Clio and Rocket Matter stepped up to LegalTech with new products and services.

Clio announced ClientConnect, a secure Web-based portal for online document sharing, client collaboration, and online bill paying. Once you set a client up and allow him or her access to their data, they can view information on their matter, correspondence, documents (Microsoft Word, Excel, and PDF files), comments on documents, bills and invoices, and an online bill-paying system. ClientConnect comes at no additional charge to the $49 per month fee for lawyers and $25 per month fee per support staff member.
Rocket Matter, in celebration of the new year, officially launched version1.0 on January 6. Previous to that, it had been operating in beta mode. Like Clio, Rocket Matter is software as a service aimed at legal practice management and time and billing needs for lawyers and law firms. I will be taking a closer look at Rocket Matter after I collect myself from all the activities at LegalTech New York.

Labels: Clearwell Systems, Guidance Software, Huron Consulting, Index Engines, Kazeon Systems, LegalTech New York 2009, Mimosa Systems, StoredIQ

posted by Charles Skamser @ 2:49 PM 0 Comments

Reducing eDiscovery Costs vs. Law Firm Profits

I have spent the better part of the last two (2) weeks talking with top litigators from AM 100 Law Firms, eDiscovery service providers, eDiscovery consultants and the General Counsel from corporations that are either currently involved in cases with major eDiscovery costs or have recently complete a case with major eDiscovery costs.

What has been interesting is watching the ongoing battle between the General Counsels trying to reduce the overall costs of eDiscovery and the Partners from the AM 100 Law Firms trying to maintain their profits margins.

I have posted several extensive articles on the cost of eDiscovery and therefore I am not going to go over the details again.  As a review, Businesses and other organizations spent more than $2.7 billion on electronic data discovery last year, and spending on eDiscovery will grow to more than $4.6 billion by 2010, according to consultants George Socha and Tom Gelbmann, who presented their Sixth Annual Socha-Gelbmann Electronic Discovery Survey in a report published earlier this year on Law.com.  And, according to well know legal technology Blogger, speaker and general industry expert, Brent Barney, in a posting on law.com titled, "Subdue the Costs of Document Review", document review can account for 50 percent to 90 percent of the costs involved in a litigation matter.  And at $150 - $400 per hour, the classical docuemnt review portion of the eDiscovery process is a very large profit center for the AM 100 Law Firms. 

However, with the emergence of the discipline of Early Case Assessment (ECA) and associated technologies from legal technology vendors such as Clearwell Systems and earlyCASE,  designed to dramatically reduce the amount of Electronically Stored Information (ESI) or Electronically Stored Evidence (ESE), profits from document review are beginning to dwindle. And, the law firm partners that I have talked to are not very happy about it.  As a result, they are investigating whether or not they should be jumping into the ECA technology waters and setting up computer forensic practices to offset the loss in profits from document review.

Interestingly enough, and really the point of my article, is that the General Counsel and their associated Information Technology (IT) departments that I have talked to are also looking into whether or not they should be jumping into the ECA technology waters and setting up either internal computer forensic practices or partnering with independent third party computer forensic partners and third party ECA service providers to dramatically reduce the amount of ESI/ESE before it is sent to their outside counsel for review.    This investigation by both parties to this issues is shaping up to be a classical market paradigm shift and one that I and most of the eDiscovery world will be watching with great interest.

Please note that I will be attending LegalTech in New York February 2-4, 2009 and will post any and all additional opinions and data points that I can gather regarding this topic.

Labels: AM 100 Law Firms, Brent Barney, Clearwell, Clearwell Systems, Early Case Assessment, earlyCASE, eDiscovery, ESI, LegalTech New York 2009, The Cost of eDiscovery

posted by Charles Skamser @ 11:25 AM 0 Comments