The eDiscovery Paradigm Shift

Friday, July 13, 2012

Five Initial Steps to Meet the Governance, Risk and Compliance Obligations Brought on by Today's Big Data File Stores

The accelerating increase in the amount of unstructured Electronically Stored Information (ESI) is leaving IT organizations struggling with how to store and manage all of this new information. Aside from just providing the underlying storage infrastructure to host this amount of data, companies are also faced with the task of properly managing their Big Data file stores to meet existing governance, risk and compliance obligations. To do so, there are five steps they can take now to position their organization to meet them.

According to a 2010 report by IDC, the amount of information created, captured or replicated has exceeded available storage for the first time since 2007. The size of the digital universe this year will be tenfold what it was just five years earlier. According to this same IDC report, the volume of unstructured ESI is expected to grow at over 60% CAGR (Compounded Annual Growth Rate).

According to Forrester Research and as reported in an article that appeared on Forbes website last week:

The average organization will grow their data by 50 percent in the coming year
Overall corporate data will grow by a staggering 94 percent
Database systems will grow by 97 percent
Server backups for disaster recovery and continuity will expand by 89 percent

Overseeing the expansion of storage space and ensuring that the data is protected has become a minor part of the overall task of Big Data file storage and management. Business stakeholders and the Information Technology (IT) organizations from enterprises of all sizes and across all industries must now face a list of Governance, Risk and Compliance (GRC) regulations to which they have to legally comply or face potentially fatal financial penalties to the enterprise.

The most obvious laws to which they are subject include:

Sarbanes-Oxley (SOX)
Health Insurance Portability and Accountability Act (HIPAA)
Gramm-Leach-Bliley (GLBA)
Federal Information Security Management Act (FISMA)
Consumer Information Protection Laws
Federal Rules of Civil Procedure (FRCP)

Further, the list of new regulations is growing. The passage of The Patient Protection and Affordable Care Act (PPACA) will result in the US Government adding 159 new agencies, programs, and bureaucracies to assist with the compliance of over 12,000 pages of new regulations. Over the past ten years, in response to the threat of international terrorism, the US Department of Homeland Security (DHS) has added hundreds of new regulations. Finally, cyber terrorism, including acts of deliberate, large-scale disruption of enterprise computer networks, is now a reality that all businesses must face.

In the face of this, Big Data file storage and management vendors, along with the associated industry consultants, have developed a list of hardware and software requirements and associated value propositions to help enterprise buyers decide which Big Data file storage and management platforms to purchase.

But before they buy, there are five steps that buyers should take first to ensure they are prepared to meet the governance, risk and compliance obligations brought on by today's Big Data file stores:

Internal Collaboration: File management and Governance, Risk and Compliance (GRC) requirements affect business stakeholders from the boardroom to IT to the manufacturing floor and loading dock to the accounting office. The development of cross functional workgroups and the promotion of internal collaboration between functional experts is the key to successfully identifying, understanding and addressing all of the requirements and issues involved in Big Data file management across the entire enterprise.

Network Architecture Planning: Over the past 25 years, enterprise architectures grew with little or no planning resulting in wasteful redundancy and little or no access to all the enterprise data as may be required to comply with today’s GRC requirements. The advent of the Internet and now cloud computing has brought this decades of poorly planned networks to light resulting in them become more of an enterprise liability than an asset. The time is now for IT to hit the restart button and explore new options such as virtualization, hybrid cloud architectures and the use of cloud service providers (CSPs) that enable them to better leverage, manage and optimize their existing infrastructure..

Security: The introduction and proliferation of portable storage devices, Wireless Internet, mobile computing devices, enterprise Software-as-as-Service (SaaS) applications, cloud storage, blogs and social media such as Facebook, LinkedIn and Twitter, data theft and cyber attacks are a real issue for which many (and arguably most) companies do not have a good answer. Now is the time for IT to take a serious look at their internal file access policies and move as quickly as possible to address any existing shortcomings.

Data Retention Policy Development and Implementation: Sarbanes-Oxley (SOX), the Health Insurance Portability and Accountability Act (HIPAA) and the Federal Rules of Civil Procedure (FRCP) all have very specific data retention guidelines for what types of ESI data an enterprise has to keep and how long to keep it. Enterprises must investigate and document these requirements, development data retention policies and acquire the appropriate software to ensure compliance.

Technology Vendors and Consulting Partners: Business stakeholders and IT management may be overwhelmed with the task of addressing the issues of successfully meeting the GRC obligations of big file storage and management. If this is the case, reach out to the hardware and software vendor community and askhow their solutions support these issues. If required, engage the services of vendor independent consulting partners to act as trusted advisors to assist in the successful navigation of the required cultural transitions and the acquisition of the best technology platforms.

The accelerating increase in the amount of unstructured Electronically Stored Information (ESI) is putting IT organizations on the defensive as they struggle to figure out how to store and manage all of this new information. However, overseeing the expansion of storage space and ensuring that appropriate backups are completed has become a minor part of the overall task of big file storage and management.

Rather business stakeholders and IT staff need to act now to first bring their infrastructure under control so they can get in front of the growing list of GRC regulations to which they are subject. By following the five steps outlined above, enterprises will be in a position so that when they purchase a product, they will have a good grasp of what their true enterprise challenges are and have a high probability of bringing in a product that addresses them.

Labels: Big Data, Compliance, eDiscovery, FISMA, FRCP, Governance, GRC, HIPPA, Information Governance, Legal, Litigation, Risk, Sarbanes-Oxley

Tuesday, July 10, 2012

Top Five eDiscovery Technologies to Watch in 2012

Over the past 12 months I have had the unique opportunity to seek out and review over 100 eDiscovery technologies. As a result, I have had the pleasure of being exposed to some exciting new technologies that will have a disruptive impact on the eDiscovery market in the second half of 2012.

With over 100 technologies to choose from, culling the list down was not an easy task. Therefore, I had to rely upon some amount objective criteria such as platform technology stack and supported environments along with a heavy dose of my subjective opinion in regards to how disruptive a technology could be within the paradigm shift of the eDiscovery market.

The objective, more technical criteria was easy. At least in regards to 4 of my 5 choices. The subjective criteria was a bit more complicated as I took into consideration criteria such as pricing, positioning, deployment flexibility, management team and uniqueness.

Following are my choices for the Top Five eDiscovery Technologies to Watch in 2012:

BeyondRecognition, BeyondRecognition

Optical Character Recognition (OCR), a foundational technology for litigation services and eDiscovery hasn't changed much in 30 years. And, vendors really haven't worked on making it more accurate or added any significant new bells and whistles. Therefore, after I had the opportunity to spend some time with John Martin from BeyondRecognition and review his new glyph based image processing technology designed to replace OCR and more, it was an easy decision to rank Beyond Recognition as the technology that will have the most disruptive impact on the eDiscovery market in the second half of 2012.

With character and word identification and conversion accuracy at 99.5%+, single instance character and word correction, Logical Document Determination (LDD), document type classification, duplication document detection, database field indexing and a cloud based scalable architecture that can process terabytes of data per day, BeyondRecognition will most definitely have a disruptive impact on the eDiscovery market and any other markets that require large volumes of text based materials to be processed and coded. For more information about BeyondRecognition, please visit: http://www.beyondrecognition.net/BeyondRecognition,_LLC/Overview.html.

X1 Social Discovery, X1 Discovery

With the rapid proliferation of social media, I predict there are going to be very few eDiscovery and Information Governance projects going forward that don't include potential evidence from social media sources such as Facebook, LinkedIn and Twitter. Therefore, I included X1 Social Discovery™ from X1 Discovery as one of my top five eDiscovery technologies to watch in 2012.

X1 Social Discovery™ is the industry's first investigative solution specifically designed to enable eDiscovery and computer forensics professionals to effectively address social media content and web content, in one single interface. X1 Social Discovery™ provides for a powerful platform to collect, authenticate, search, review and produce electronically stored information (ESI) from Facebook, Twitter, LinkedIn and other web sources. For more information about X1 Social Discovery™ , please visit: http://x1discovery.com/social_discovery.html.

X1 Rapid Discovery, X1 Discovery

With the accelerating volume of Electronically Stored Information (ESI) in the cloud, I predict there are going to be more and more eDiscovery and Information Governance projects going forward that require potential evidence to be extracted from the cloud and possibly even processed in the cloud. Therefore, I included X1 Rapid Discovery™ from X1 Discovery as one of my top five eDiscovery technologies to watch in 2012.

With X1 Rapid Discovery™, organizations can quickly access, search, triage and collect their data in their existing cloud environments, without having to first export that data; thereby transforming how organizations address the challenges of search, collection and analysis of cloud-based data. While other eDiscovery products require migrating or even shipping data to the vendor tools, X1 Rapid Discovery™ is a hardware-independent software solution that uniquely installs and operates on demand where your data currently resides. For more information about X1 Rapid Discovery™ , please visit: http://x1discovery.com/rapid_discovery.html.

TunnelVision, Mindseye Solutions

The Early Case Assessment (ECA) tool landscape has changed dramatically over the past 12 months. New tools that cover a larger percentage of the EDRM model and are built upon newer more flexible technologies have emerged with aggressive new pricing models. Therefore, I included TunnelVision from Mindseye Solutions, a representative of those new ECA platforms, as one of my top five eDiscovery technologies to watch in 2012.

TunnelVision was purpose-built by long time eDiscovery industry experts to address the challenges that organizations are facing when supporting eDiscovery and Information Governance. The technology is a simple yet flexible platform, designed to scale, and delivers full transparency. TunnelVision carries a predictable cost model and helps in managing risk, identifying exposure, and eliminating wasted time throughout the process. For more information about TunnelVision from Mindseye, please visit: http://www.mindseyesolutions.com/.

Equivio Zoom, Equivio

Predictive coding or Technology Assisted Review (TAR) has captured the imagination of the industry in the first half of 2012. As such, I wanted to include predictive coding technology in my list of top five eDiscovery technologies to watch in 2012 and therefore I chose Equivio Zoom from Equivio.

Equivio develops text analysis software for eDiscovery. Users include the DoJ, the FTC, KPMG, Deloitte, plus hundreds of law firms and corporations. Equivio offers Zoom, an integrated web platform for analytics and predictive coding. Zoom organizes collections of documents in meaningful ways. So you can zoom right in and find out what’s interesting, notable and unique. For more information about Equivio Zoom from Equivio, please visit: http://www.equivio.com/.

Summary and Comments

With over 100 technologies to choose from, culling the list down was not an easy task. Therefore, I had to rely upon some amount objective criteria such as platform technology stack and supported environments along with a heavy dose of my subjective opinion in regards to how disruptive a technology could be within the paradigm shift of the eDiscovery market. BeyondRecognition, X1 Social Discovery, X1 Rapid Discovery, TunnelVision and Equivio Zoom definitely met these criteria.

It will be interesting to review my list of Top Five eDiscovery Technologies to Watch in 2012 this time next year when I choose another list. Some on the 2012 list will have had a big impact and some will not. However, one thing is for sure, each of these technologies represents a major step forward for litigation and eDiscovery technology.

Additional Product Reviews

Over the coming weeks, I will be posting additional product reviews for each of the technologies listed in the eDSG Top Five eDiscovery Technologies to Watch in 2012.

Labels: Cloud Computing, Early Case Assessment, ECA, eDiscovery, Legal, Litigation, OCR, Optical Character Recognition, Social Media

Tuesday, June 26, 2012

The Best Place to Perform Technology Assisted Review (TAR)

The resulsts of eDiscovery Solutions Group (eDSG) Weekly Survey on "Where is your Technology Assisted Review (TAR) done?" are in and they reveal that 43% of the respondents are outsourcing their Technology Assisted Review (TAR) to third party document review providers. These results seem to be somewhat contradictory to the prime objective and overall value proposition of the Legal Services Outsourcing (LSO) or Legal Process Outsourcing (LPO) vendors to provide less expensive manpower for labor intensive tasks such as document review.

However, according to a report on the Top Ten Trends in Legal Outsourcing for 2012 by Fronterion LLC, legal technology platforms (such as TAR) will be increasingly bundled together with traditional LPO offerings, combing two of the most important trends shaping the legal profession today. This means using software systems as well as low cost human labor to provide cheaper and more efficient legal services.

This trend seems to actually have been evolving for years as legacy LPO players have long been utilizing software tools and techniques during the document review processes including: document clustering, email thread management and keyword and concept search to cull and organize the documents in order to increase the speed and reduce the overall cost of review. Adding predictive coding to mix as a way to reduce the cost even further seems like a logical progression in the evolution of the LPO as they strive to maintain their margins.

The percentage of the respondents that chose something other than an LSO for where they send their Technology Assisted Review (TAR) also provided some interesting results:

Outside Counsel (14%)
Internal as part of Document Review Software (14%)
Internal as separate Technology Assisted Review (TAR) Software (29%)

The fact that 14% of the respondants chose Outside Counsel for where they send their Technology Assisted Review (TAR) indicates that although the eDiscovery market is going through a paradigm shift with corporate legal departments bringing eDiscovery services in-house, there are still some legal departments relying on their outside counsel for eDiscovery services. An interesting question for a future eDSG poll would be whether or not legal departments send their TAR to outside counsel because their outside counsel is proficient at TAR or because they send all of their eDiscovery work to outside counsel. It would also be telling to investigate whether or not these outside counsel are performing the TAR services internally or sub-contracting them to an LPO or LSO.

The results of the eDSG 2012 Survey of the General Counsel from the Global 250 indicated that 86% of the respondants send their document review to either outside counsel or an LPO. However, the survey also revealed that 75% of the respondants were frustrated that neither outside counsel nor legacy LPOs were providing adequate support for eDiscovery. This survey also revealed that 80% of general counsel from the global 250 were frustrated with having to deal with software vendors. This statistic leads into the last two facts from the eDSG weekly poll on where respondents are sending TAR. The poll reveals that 43% are performing TAR internally which indicates that they are having to "deal" with software vendors. The eDSG weekly poll is open to anyone that wants to vote and therefore the respondants are not necessarily general counsel from the global 250. In fact, I would venture to say that very few is any of the respondants to this week's poll were general counsel. However, it is still significant and shows a trend that 43% of the respondants indicated that they are performing TAR internally.

The fact that 14% of the respondents chose Internal as part of Document Review Software for where they send their Technology Assisted Review (TAR) indicates that some of the document review vendors have successfully integrated TAR into their review platforms.

However, the fact that 29% of the respondants chose Internal as separate Technology Assisted Review (TAR) Software for where they send their Technology Assisted Review (TAR) indicates that eDiscovery users are not yet comfortable with TAR and may not be ready to use it as part of their stand document review process. However, this statistic is significant enough to indicate that eDiscovery users understand the value of TAR and are therefore using in those situations where it satisfies the technical and legal requirements.

The resulsts of eDiscovery Solutions Group (eDSG) Weekly Survey on "Where is your Technology Assisted Review (TAR) done?" reveals that users within the eDiscovery market is still trying to figure out when, where an how to best utilize Technology Assisted Review (TAR). Complicated by the ongoing paradigm shift of responsibility for eDiscovery services moving to the legal deparments and exaserbated by the evolution of both LPOs and outside counsel trying to refine their business models, TAR users should take the time to understand their internal requirements and then investigate the best approach, partners and place to perform TAR. It may not be as straight forward to they think.

Click Here to view the results of the eDiscovery Solutions Group (eDSG) Weekly Survey on "Where is your Technology Assisted Review (TAR) done?".

Labels: Document Review, eDiscovery, General Counsel, global 250, Legal, Litigation, Litigation Software, Predictive Coding, TAR, Technology Assisted Review

Wednesday, June 20, 2012

Percieved Value of Technology Assisted Review (TAR)

eDiscovery Solutions Group (eDSG) ran a public poll the week of June 11, 2012 asking respondents to vote on "The Number One Reason for Using Technology Assisted Review (TAR)". The poll was open for 7 days and there were 476 responses.

eDSG marketed this poll to the eDiscovery and legal community through specific and targeted LinkedIn groups such as The Computer Assisted eDiscovery Group, The eDiscovery Solutions Group, The Early Case Assessment Association and via Twitter at @eDiscoveryGroup.

Respondents did not have to identify their position within the eDiscovery market and were able to vote more than once.
The results of the poll are as follows:

Check the Accuracy of Human Review = 14%

Reduce the Document Set for Human Review = 29%

Replace Human Reviewers = 57%

To see a graphic representation of this poll and of all eDSG polls, please go to the eDSG website: http://www.ediscoverysolutionsgroup.com/index-8.html.

Comment and Analysis on Results

Most of the recent interest with Technology Assisted Review (TAR) or Predictive Coding, as it is sometimes called, stems from Da Silva Moore (2012 U.S. Dist. LEXIS 23350 (S.D.N.Y. Feb. 24, 2012)), a decision rendered by Magistrate Judge Andrew Peck and confirmed by U.S. District Judge Andrew Carter (11 Civ. 1279 (ALC)(AJP)). However, TAR is not new and its value and reliability has been studied for years.

As an example, in a 2009 study published in the Journal of the American Society for Information Science and Technology by Roitblat, Kershaw and Oot, titled, "Document Categorization in Legal Electronic Discovery: Computer Classification vs. Manual Review", two TAR systems each agreed with an original human review on about 83% of the documents reviewed. By comparison, two new human teams only agreed on about 73% of the documents.   As a result, the Roitblat, Kershaw and Oot study concluded that TAR was, "no worse than using human review."

Other studies have also addressed the “myth” that human document review is somehow inherently more reliable than could be obtained with TAR (e.g., Grossman & Cormack, 2011; Baron, et al., 2009).    As such, the evidence has been clear for some time that TAR can be very effective.

However, in an industry known for evolving and embracing new technology at the pace of a snail, with a built in prejudice and comfort level for human review,  I am not convinced that the market has agreed upon the best practice for using TAR. As an example, I have witnessed users utilizing TAR to cull down very large data sets with statistical "hit rate" settings in the high 90%, leaving the "important" review work to humans. I have also seen users utilizing TAR to "spot check" the accuracy of human reviewers with the necessary "rework" going back to a different set of human reviewers.   During this early adaptor phase in the evolution of TAR, neither of the uses that I sited for TAR are necessarily wrong. I just believe that the research and evidence already justifies the more productive and financially rewarding use of TAR is to replace human reviewers.

Given all of this, I was actually very pleased to see that 57% of the voters in this eDSG poll agreed that the number one reason for using Technology Assisted Review (TAR) was to replace human reviewers. However, more in line with what I would have thought, 43% of the respondants voted otherwise. I would suspect that these are the mainstream buyers and the laggards (see Crossing the Chasm). Or maybe these were the voters that own and operate offshore document review organizations?

In any case, maybe TAR is going to be the "tipping point" technology that finally drives the legal industry to explore and possibly embrace to the value of technology? Let's hope so.

Labels: Computer Assisted Review. Document Review, eDiscovery, Legal, Litigation, TAR, Technology Assisted Review

Thursday, May 10, 2012

Do Litigators Need to Understand Predictive Coding Theory?

With the debate over Predictive Coding entering a feverish pitch, there is an interesting thread of discussion beginning to emerge asking whether or not litigators and other users need to understand what I am going to refer to as Predictive Coding Theory.

In a May 4, 2012 Blog titled, "3 Drawbacks To Predictive Coding", Sandra E. Serkes, President and CEO of Valora Technologies writes "What is missing (in regards to the Predictive Coding debate), is a discussion of the specific weaknesses of the overall Predictive Coding technique. She then goes on to indicate that, "Predictive Coding tagging algorithms are not transparent".

To put this into more technical terms, do we need to know what probability theories and related dimension reduction systems are being used as the foundational algorithms for Predictive Coding system to identify relevant documents?

For those of you who are interested in a more detailed overview of Predictive Coding, I suggest that you read a March 25, 2012 Blog post titled, "Predictive Coding Based Legal Methods for Search and Review", Ralph Losey does an excellent job of discussing the basic technical mechanics and some of the underlying theories of Predictive Coding.

Getting back to my question about how much we need to know about Predictive Coding, I am in the process of developing some unique insight. Over the past 30 days, in preparation for adding a Predictive Coding module to the DCIG/eDSG 2012 Early Case Assessment Buyers Guide, I have been interviewing product managers from some of the Predictive Coding vendors and current users of Predictive Coding system to develop a list of criteria for reviewing and ranking the platforms for our buyers guide. One of the questions that I have been asking is what probability theories and related dimension reduction systems are being used as the foundational algorithms for your Predictive Coding platform to identify relevant documents.

So far, I haven't gotten a straight answer as most of the product managers either don't undesrtand the question or want to move the discussion up a couple of layers in technology stack to talk about indexing, semantic search, clustering, relevance ranking, sampling and presentation of results. There is no doubt that these are all very pertinent topics to a perspective buyer of Predictive Coding technology. However, it doesn't answer the question about the transparency of exactly how these systems are identifying relevant documents.

Whether or not litigators need to understand Predictive Coding theory and the underlying probability theories and related dimension reduction systems is debatable. However, I believe that a minimum level of transparency from the Predictive Coding vendors would at least give buyers the opportunity to understand what they are buying and then compare the various offerings.

In 1969, Edgar F. Codd and some of his associates that I have actually had the honor or knowing, first formulated and proposed the theory of relational database. And, although I am not sure that it reach the level of skepticism and resistance to blind adoption that we are currently seeing with Predictive Coding. However, it was new and therefore many did require an explanation of the underlying theories and mathematics. Eventually, the discipline normalized and everyone just assumed that relational databases worked and there was no longer any need to question "how they worked'.

A similar vetting process would be very healthy for Predictive Coding. Check back to my blog in the coming weeks for updates and more information on this topic.

Labels: Clustering, eDiscovery, Litigation, Predictive Coding, Relevance Ranking, Search, Semantic Search

Thursday, April 5, 2012

Amazon is Overlooking the Fiancial Value of eDiscovery

On April 4, 2012, Dick Harris posted a really interested article on Gigacom.com titled "How the cloud could boost Amazon’s slow-moving margins". Mr. Harris quoted an analyst from Morgan Stanley who indicated that Amazon’s cloud computing division could be a shining star (even if not too bright) on the company’s long road toward increased profit margins. However, while their forecast isn’t glowing, it also doesn’t account for the evolution of Amazon’s cloud business from pure infrastructure-as-a-service into higher-level (and higher-margin) services. He went on to state that in the new research report published Monday morning, analysts Scott Devitt, Andrew Ruud and Nishant Verma come to a possibly disconcerting conclusion for any investors banking on Amazon for short-term returns. The report’s gist: “After analyzing Amazon.com’s cost structure in detail and by segment, we conclude that there are far more variable costs than investors believe, leading to an overly optimistic timeline for margin expansion.” But Amazon Web Services is an opportunity Amazon might be able to exploit.

The report estimates that AWS was responsible for $1.19 billion in revenue in 2011 (I predicted in October the business was on a billion-dollar run rate), of which $108 million (or about 9 percent) was sheer profit. It’s able to maintain this margin while constantly dropping prices on its cloud services, the report contends, because AWS uses a cost-plus pricing model. That is, it just adds a premium (about 10 percent) on top of the cost of delivering those services, which continue to drop as Amazon leverages its economies of scale to buy and operate more gear and bandwidth at lower prices.

I found all of this to be very encouraging for Amazon stockholders and the cloud computing industry. However, what really caught my eye was Mr. Harris's contention that AWS margins actually could start rising as the company expands its services beyond sheer infrastructure and into managed services. He indicated that Its NoSQL DynamoDB database service, for example, is a service for which Amazon adds value (and cost) beyond just the delivery of cloud-based infrastructure, and there are lingering rumors of a big data analytics service that will provide higher-level services than AWS’s existing Elastic MapReduce offering.

For those of you who read my Blog, I have been contending for that past 6 months that Cloud Service Providers (CSPs) such as Amazaon are missing a very key competitive advantage by not offering eDiscovery and Information Governance as a part of an expanded Platform-as-a-Service. Please see The Perfect Storm: eDiscovery and Cloud Service Providers, Cloud Computing Architecture and eDiscovery, eDiscovery Will Follow the Cloud Computing Boom and Navigating eDiscovery in the Cloud Shouldn't Be That Difficult.

Based on my research that there is a latent demand for eDiscovery and Information Governance in the Cloud, I conducted a research study asking both CSPs and their clients what they thought about how CSPs were currently supporting eDiscovery and Information Governance in the Cloud. The results were very disappointing as most of the CSPs had not idea what eDiscovery was, the legal requirements nor the vlaue that it would bring to their client bases. You can read the results of this survey at: Results of the 2012 eDSG Investigation of Cloud Service Providers and eDiscovery.

With all of this history of trying to blaze new trails within the Cloud Service Provider market for eDiscovery and Information Governance, I am very encouraged by Mr. Harris's article and optimistic that at Amazon may be headed toward offering additional services to their clients such as analytics, eDiscovery and Information Governance. It may in fact be the key for Amazon to increasing the $1.19 Billion in revenue that AWS posted for 2011 to a much higher level than could have ever been imagined with just IaaS or even standard PaaS services. And, if Amazon doesn't get it or doesn't want to make a move on eDiscovery, I predict that one of the other CSPs will.

The full text of the Gigacom article by Dick Harris is as follows:

According to analysts at Morgan Stanley, Amazon’s cloud computing division could be a shining star (even if not too bright) on the company’s long road toward increased profit margins. However, while their forecast isn’t glowing, it also doesn’t account for the evolution of Amazon’s cloud business from pure infrastructure-as-a-service into higher-level (and higher-margin) services.

In the new research report published Monday morning, analysts Scott Devitt, Andrew Ruud and Nishant Verma come to a possibly disconcerting conclusion for any investors banking on Amazon for short-term returns. The report’s gist: “After analyzing Amazon.com’s cost structure in detail and by segment, we conclude that there are far more variable costs than investors believe, leading to an overly optimistic timeline for margin expansion.” But Amazon Web Services is an opportunity Amazon might be able to exploit.
The report estimates that AWS was responsible for $1.19 billion in revenue in 2011 (I predicted in October the business was on a billion-dollar run rate), of which $108 million (or about 9 percent) was sheer profit. It’s able to maintain this margin while constantly dropping prices on its cloud services, the report contends, because AWS uses a cost-plus pricing model. That is, it just adds a premium (about 10 percent) on top of the cost of delivering those services, which continue to drop as Amazon leverages its economies of scale to buy and operate more gear and bandwidth at lower prices.

Although AWS margins remain flat, the report notes that AWS also comprises a significant portion of Amazon’s overall technology spending, so being able to drive steady, predictable profit from it is a good thing. Non-AWS technology spending, the authors estimate, is about 4 percent of net sales — “represent[ing] the largest opportunity for operating margin expansion in the near-term.” Keeping those cost down means a greater percentage of revenue goes toward profit.

However, the Morgan Stanley report doesn’t address the possibility that AWS margins actually could start rising as the company expands its services beyond sheer infrastructure and into managed services. Its NoSQL DynamoDB database service, for example, is a service for which Amazon adds value (and cost) beyond just the delivery of cloud-based infrastructure, and there are lingering rumors of a big data analytics service that will provide higher-level services than AWS’s existing Elastic MapReduce offering.
We shouldn’t overlook the possibility of AWS expanding its licensing activities, either. As it becomes more entrenched as the de facto cloud computing platforms for many companies, providers of other services and software are keen to get on board. Already, private-cloud pioneer startup Eucalyptus has licensed the AWS API, and Citrix wants to do the same for its CloudStack software. If it’s feeling greedy, Amazon could look to capitalize even further by charging others to integrate directly with its business.
Or it could just give that cost-plus dial about a quarter turn.

Labels: Amazon, AWS, Cloud Computing, Cloud Service Providers, CSPs, eDiscovery, Information Governance, Litigation

Tuesday, April 3, 2012

Zoom to Predictive Coding

Predictive coding has captured the imagination of the eDiscovery market.    As a result, my daily conversations with members of the legal departments of the global 2000 and the eDiscovery professionals within the major law firms now routinely include questions about how predictive coding works, what predictive coding technologies are available and which predictive coding vendors I recommend. Therefore, in an effort to better serve my curious client base, I caught up with Warwick Sharp, co-founder and Vice President of Marketing and Business Development for Equivio, to learn more about their predictive coding platform.

Founded in 2004 in Israel, Equivio began by developing and marketing near-duping and email thread management software. Its acquired a wide variety of clients, including hundreds of law firms, corporations, government entities and consulting organizations throughout the world. Its client base includes the Department of Justice, the Federal Trade Commission, KPMG and Deloitte. In addition, Equivio technology has also been a favorite integration partner among other litigation software vendors such as kCura and many of the well known litigation service providers.

In early 2009, Equivio made the gutsy decision to enter the unknown and highly under appreciated predictive coding wilderness with Relevance, its standalone predictive coding platform. Along with a handful of other predictive coding pioneers such as Recommind, Orcatec and Xerox, Equivio set out to convince the legal community that this new software with its complex mathematical algorithms and confusing statistical models could do a better (i.e. more statistically significant) job of identifying relevant documents than human reviewers. And, although I haven’t asked Equivio about the early financial returns on this bet, I would suspect that the initial missionary marketing efforts were tough and didn’t produce a financial return on their investment. However, Equivio didn’t give up. And, with the recent landmark court decision by Southern District of New York Magistrate Judge Andrew Peck on the Da Silva Moore case opening the flood gates for the legal tolerance for computer assisted review (aka predictive coding), they are now well positioned as one of the few legacy players in the predictive coding market.

On January 23, 2012 Equivio launched Zoom, a single integrated platform for predictive coding and analytics. As reported in their initial press release, Zoom combines Equivio's best-of-breed near-duplicates, email threads and Relevance components together with data import and export, early case assessment and enriched analytics. These components are seamlessly integrated on a unified web-based platform for easy access and use. This past week, I had a chance to spend some time with Warwick and see Zoom in action.

My first impression of Zoom is that it has an extremely intuitive and attractive web-based user interface that provides an easy to understand workflow management system to lead users through the process of collection, processing, analytics, first pass review with predictive coding and export. Support for collection, processing and initial culling appear to meet or maybe even exceed industry requirements to prepare data for initial review.

From a more detailed standpoint, Zoom enables users to extract text and metadata from raw ingest and generates data profiles for Early Case Assessment (ECA).  It then enables users to subject the data to multi-layered analysis, including de-duping, near-duping, email thread management and language detection. Zoom's search environment also supports keyword analysis and metadata faceting.

From a predictive coding perspective, Zoom enables litigators to efficiently “train the system” to identify and assess documents for responsiveness and privilege with little or no knowledge beyond standard online document review best practices.  The platform displays the complex, yet required, predictive coding statistics with easy to understand graphics and even provides users with the cost of review for the current level of statistical significance and the cost projections for increasing that percentage. Finally, Zoom exports native files, full text and metadata to the user’s review platform of choice. Please note that I have not tested the viability of Zoom’s predictive coding accuracy and therefore, for the purpose of this initial review, I am taking Equivio’s word that it meets or exceeds expectations for computer assisted document identification and that the results would hold up in court.

I have designed, tested and used literally hundreds of Web-based applications over the years and I would rate Zoom among the best for easily guiding the user through a fairly complex process and providing an initial positive experience.

And although Warwick was reluctant to position Zoom as an Early Case Assessment (ECA) tool, I believe that Zoom does in fact have the foundational architecture, features and a workflow that can mature into a formidable competitor in the ECA market. Whether or not Zoom fulfills this destiny will of course be up to Equivio and how they decide to position and market their new product.
Given my position as an impartial industry analyst with the responsibility of being a trusted advisor to my clients and because there are other noteworthy predictive coding platforms on the market from vendors such as Recommind, Orcatec and Xerox, I am reticent to declare Zoom as the leading predictive coding platform in the industry.

And, given the fact that eDiscovery Solutions Group, in partnership with DCIG, will be including Equivio in its 2012 Early Case Assessment Interactive Buyer’s Guide available in May 2012 and the 2012 Predictive Coding Interactive Buyers Guide available later this summer, buyers will have all of the objective information that they require to make their own decisions.

However, after my initial review, Zoom should definitely be on any buyer’s short list of next generation eDiscovery platforms as it definitely provides the culling and analytics required for serious Early Case Assessment (ECA) and integrates an attractive and competent predictive coding component.

For a more detailed overview of Zoom, you can contact me at: productbriefings@ediscoverysolutionsgroup.com.

For more information on Equivio and Zoom, please visit: http://www.equivio.com/.
Click Here to join the International Association of Predictive Coding

Labels: eDiscovery, Equivio, Litigation, Orcatec, Predictive Coding, Recommind, Saas, Software-as-a-Service, Xerox

Tuesday, March 20, 2012

eDiscovery Will Follow the Cloud Computing Boom

The National Inflation Association (NIA) reported this week that after years of rumors about cloud computing going mainstream around the world, the cloud computing boom is now finally here. They predict that by the year 2013, cloud computing could become a bigger boom on Wall Street than the dot-com boom was in the year 2000. Cloud computing is currently a $74 billion industry that accounts for 3% of global IT spending, but in 2013 cloud computing is expected to become a $150 billion market.

The NAI further stated that 2012 will be remembered as the year in which cloud computing started to become widely adopted worldwide. Cloud computing is expected to create 14 million new jobs globally by year 2015. In the consumer space, Gartner is predicting that cloud services will be on 90% of personal consumer devices by year 2015 so that consumers can store, connect, stream, and synchronize content across multiple platforms at different locations.

Industry analyst are heralding the explosion in the Cloud computing market as great news for the Cloud Service Providers (CSP). According to a forecast from independent technology analyst firm Ovum, the global public cloud services market will more than triple in size over the next five years to reach revenue of $66 billion in 2016 and the market will see a compound annual growth rate (CAGR) of 29.4 percent from the $18 billion it reached at the end of 2011. Ovum goes on to report that in terms of the cloud computing service lines, Software-as-a-Service (SaaS) will shrink from 87 percent of the market in 2011 to 62 percent in 2016 due to the rise of infrastructure as a service (IaaS) and platform as a service (PaaS), which will grow from 9 percent and 5 percent, respectively, to 23 percent and 16 percent by the end of the forecast period.

And, there are numerous other studies by most of the major international industry analysts that predict a dramatic increase in the size of just about everything having to do with Cloud computing.

However, it is my impression that the inevitable and potentially dramatic increase in the demand for eDiscovery and Information Governance due to this explosion of the Cloud computing market, is flying under the radar of most analysts. eDiscovery and Information Governance professionals know full well that there is a linear and possibly an expontial relationship between the volume of Electronically Stored Information (ESI) and the demands and cost of identification, collection, analysis, processing and production of that ESI.

In 2011, Gartner predicted that the eDiscovery market would reach $1.5 Billion in revenue by 2013. And, depending upon which analyst you follow (and believe), the size of the Information Governance market is anywhere from 2X to 10X the size of the eDiscovery market. I believe that all of these forecasts are extremely low.

Further, a recent study by eDSG on "How Cloud Service Providers Support eDiscovery and Information Governance" as reported on this blog on March 7, 2012, indicated that 95% of the Cloud Service Providers and 98% of the general counsel from the global 2000 (based on participation in the survey) did not have a plan for responding to eDiscovery and Information Governance requests for ESI residing in CSP facilities.

In summary, my prediction is that the explosion in the size of the Cloud computing market as reported by the National Inflation Association is really good news for any of the technology and service providers, along with their investors, that are planning to support eDiscovery and Information Governance in the Cloud. As the name of this blog implies, the eDiscovery paradigm shift is underway and the demand of Cloud computing is only going to make that shift and the associated size of the market even bigger.

The full text of the press release by the National Inflation Association: http://www.marketwatch.com/story/cloud-computing-is-new-wall-street-boom-says-nia-2012-03-20

Labels: Cloud, Cloud Computing, Cloud Service Providers, CSP, Early Case Assessment, eDiscovery, Information Governance, Law, Legal, Legal Technology, Litigation

Wednesday, January 25, 2012

The Perfect Storm: eDiscovery and Cloud Service Providers

The market for Cloud Service Providers (CSPs) is very sunny. Forrester Research predicted in a research report published earlier this year titled, “Sizing the Cloud” that the global cloud computing market would reach $241 billion in 2020 compared to $40.7 in 2010. And, Gartner Predicts that the eDiscovery market will reach $1.5 Billion by 2013. However, based upon the research that I have completed over the past sixty (60) days, Cloud Service Providers (CSPs) and their clients are ignoring eDiscovery as an important component of a standard cloud service offering.

I have some theories in regards to why this is the case:

CSPs DON'T UNDERSTAND eDISCOVERY
Over the pat five (5) years Cloud Service Providers (CSPs) have been busy focusing on their core offerings of Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), honing their value propositions and trying to figure out how to differentiate themselves from the pack. Overwhelmed with the rudimentary issues of what to offer and how to make a profit , eDiscovery has not been a requirement that has reached the road map of any CSPs that I have interviewed.

Most of the reasons behind this is the fact that eDiscovery is actually a "latent pain" that the CSP's clients and prospects are not asking for (I will cover this in more detail in the next section). However, part of the reason may be just plain semantics. I have found that when you ask a CSP business development executive if their clients are asking about eDiscovery, the answer will be no. However, if you change the question and ask if their clients are asking about information governance, compliance, business analytics or something even simpler like universal or federated search, the answer may be yes. This subtle difference is confusing to most in the eDiscovery market and therefore it is no wonder that it is very confusing to the CSP market.As In indicated in my Blog post on September 15, 2011,titled, "Evolving from Information Governance to eDiscovery", I believe that eDiscovery is actually part of a larger market called information governance (IG). And, as Sunil Soares, the Director of Information Governance within the IBM Software Group indicated in a blog post on April 11, 2011 titled, Why Information Governance is a Market, Not Just a Process, “information governance is like the blind man and the elephant. Depending on which part of the elephant you touch, people define information governance to include master data management, data stewardship, data quality management, metadata management, business glossaries, information lifecycle management and security and privacy.”

I would actually include several other components as integral parts of IG in pursuit of my premise that if Gartner predicts that the eDiscovery market is going to reach $1.5 Billion by 2013, the information governance market is going to be many times this size. Or, in other words, more than likely the largest software and services market on the planet in the next five (5) years (Note that HP paid $11 Billion for Autonomy to play in the IG Market).

So, maybe CSPs need to think of eDiscovery as Information Governance and concentrate on the fact that information governance is potentially the single biggest market on the planet in the coming years?

CSP CLIENTS DON'T UNDERSTAND eDISCOVERY
Another interesting fact emerged from my recent study on eDiscovery in the CSP market. It appears that most CSP enterprise clients don't understand eDiscovery. Come to find out, a very high percentage of the standard CSP client base are actually "renegade" business units with global 2000 enterprises that were unhappy being held hostage by their IT organizations and decided to outsource their information management to a CSP. Unless the business unit in question is the legal department (which is highly unlikely), the stakeholders within these units have no idea what eDiscovery or information governance is or would they know to even ask their CSP if it can be supported if the need were to present itself.

After further investigation into this market dynamic, the story actually gets even more interesting. If one of these global 2000 enterprises is sued and is presented with a request to produce information (ESI) or some governance regulatory entity asks for proof of compliance, the request is normally handled by the General Counsel (GC) and legal department. More than likely the first place the GC will go is to the IT department asking for its help in producing the requested data (Please note that most global 2000 enterprises are now relatively adept at the process of internal eDiscovery). However, the GC may not even know to ask about the data (ESI) from the renegade business unit and if they do, the renegade business unit is not going to know how to comply with the request and their IT department is probably not going to help since they are no at all happy that they went to a CSP for IT services in the first place. Given all of this, the business unit executives or the GC may call the CSP and ask for help. However, since the CSP doesn't really understand eDiscovery, they aren't going to be much help. Basically, at this point the entire eDiscvoery process can get pretty ugly. The GC is under a legal obligation to respond (i.e. Federal Rules of Civil Procedure) under a fairly limited time frame with financial and other sanctions are real possibilities for non-compliance with the request.

THE PERFECT STORMSo, unfortunately, what I have determined to be the current status in the Cloud Service Provider (CSP) market is the perfect storm of neither the CSP or the CSP's client base understanding the need for eDiscovery. However, there are solutions and there is hope.

THE ROADMAP FOR SUCCESS FOR CSPs
The roadmap to success for the CSPs is actually not that complicated. CSPs need to get serious about providing eDiscovery and/or information governance as a component or their standard offering.

In a January 8, 2012 blog post titled, "Cloud Computing Architecture and eDiscovey", I stated that "It is within the Platform-as-a-Service (PaaS) layer where eDiscovery services belong. In fact, this may be a good time to coin the term eDiscovery-as-a-Service (eDaaS)... And, since providing eDaaS as a standard option for any PaaS offering makes so much sense and could provide a first mover and key competitive advance for Cloud Service Providers (CSPs), I predict that we will see several eDaaS offerings before the end of 2012. And, I also predict that once the eDaaS offerings hit the market, the legacy eDiscovery platform providers will be forced to re-evaluate the value propositions of their non eDaaS offerings in the cloud."

CSPs can contact me at cskamser@ediscoverysolutionsgroup.com for additional insight on which technology vendors currently have or are about to announce eDaaS offerings.

THE ROADMAP FOR SUCCESS FOR CSP CLIENTS
The roadmap to success for the CSP clients is also actually not that complicated. First of all, enterprise business unit stakeholders need to add eDiscovery and Information Governance to their list of requirements for the CSPs. And, they need to seek out and collaborate with their legal and IT departments in regards to a plan to follow when an eDiscovery and/or compliance event occurs. It just make sense and its not complicated.

Enterprise stakeholders that are contemplating or already working with a CSP can contact me at cskamser@ediscoverysolutionsgroup.com for additional insight on what to expect from their CSP and what best practices to follow when an eDiscovery and/or compliance event occurs.

CONCLUSION
Both the cloud and the eDiscovery / Information Governance trains have left the station and therefore it is no longer an option for either Cloud Service Providers or their clients to ignore the legal requirements and business benefits. The current practices to address the issues of eDiscovery or Information Governance are ugly at best. However, the roadmap for success is not that complicated. And, the rewards for both the CSP and their clients is well worth the investment.

Labels: Cloud Service Providers, CSPs, Early Case Assessment, eDiscovery, Federal Rules of Civil Procedure, FRCP, Legal, Litigation

Sunday, January 8, 2012

Cloud Computing Architecture and eDiscovery

Cloud computing is now the defacto Information Management (IT) architecture that enterprises are either already utilizing or have plans to utilize in the near future. The goal of this Blog post is to provide an overview of cloud computing, it's effect on the practice of eDiscovery and what eDiscovery in the cloud really means.

From a pure conceptual standpoint, cloud computing is actually a marketing term for technologies that provide computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. From an end user standpoint, conceptually not having to worry about where your data is located is a tremendous benefit. However, from an eDiscovery collection perspective, conceptually not knowing where data may be located could prove to be an issue or at the very least a concern.

Cloud comping is also a delivery model for IT services based on Internet protocols, and it typically involves provisioning of dynamically scalable and often virtualized resources. It is a natural byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet. This may take the form of web-based tools or applications that users can access and use through a web browser as if the programs were installed locally on their own computers. Saleforce.com is the best known example of this type of application of cloud computing. There are also several eDiscovery vendors that now offer a web-based option and most, if not all of the remaining vendors will be doing so in 2012.

At the foundation of cloud computing is the broader concept of infrastructure convergence, consisting of services delivered through shared data centers, which appear to users as a single point of access for their computing needs. This type of data center environment allows enterprises to get their applications up and running faster, with easier manageability and less maintenance, and enables IT to more rapidly adjust IT resources (such as servers, storage, and networking) to meet fluctuating and unpredictable business demand. From a pure conceptually standpoint, infrastructure convergence enabling the flexibility of meeting the inevitable demands of eDiscovery processing would seem to be the natural next step. However, in practice, with much of the legacy eDiscovery technology locked into appliances and complex software configurations that don't lend themselves to the advantages of virtualized computing, there are only a few eDiscovery technology vendors that are positioned to truly take advantage of cloud computing and the flexibility of infrastructure convergence.

Once an enterprise decides to go down the cloud computing path they can either implement the concept of infrastructure convergence and shared resources as an internal private cloud, an outsource their IT infrastructure to a third party public cloud through a Cloud Service Provider (CSP) or they can choose a hybrid approach which utilizes both public and private cloud infrastructures. However, as I stated in the previous paragraph, there are only a few eDiscovery technology vendors that are positioned to truly take advantage of cloud computing and the flexibility of infrastructure convergence. Therefore, at this point, even though the enterprise decides to implement cloud computing, unless they embrace the new generation of eDiscovery platforms that can "live and work" in the virtual world of the cloud, they may have to leave their eDiscovery processing behind and continue to collect and process data outside the cloud.

Amazon Web Services (AWS)
One of the first and better know Cloud Service Providers (CSPs) is Amazon Web Services (AWS). Launched in July 2002, Amazon Web Services  is a collection of remote computing services (also called web services) that together make up a cloud computing platform, offered over the Internet by Amazon.com. The most central and well-known of these services are Amazon EC2 and Amazon S3.  Most of these services are not exposed directly to end users, but instead offer functionality that other developers can use. In June 2007, Amazon claimed that more than 330,000 developers had signed up to use Amazon Web Services.Amazon Web Services’ offerings are accessed over HTTP, using Representational State Transfer (REST) and SOAP protocols. All services are billed on usage, but how usage is measured for billing varies from service to service. Please note that as of the writing of this Blog post, AWS had not responded to numerous requests to officially comment on how they are currently handling eDiscovery requests from thier clients.

CLOUD ARCHITECTURE LAYERS
Cloud computing architecture is categorized into three (3) layers; Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS).

Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) is the best known of these layers as it is the most visible to users. Simply put, Software-as-a-Service (SaaS) enables software vendors to deliver software as a service over the Internet, eliminating the need to install and run the application on the user's own computers and simplifying maintenance and support. SaaS is actually a more mature delivery architecture than many realize and is an integral part of cloud computing. According to a Gartner Group estimate,SaaS sales in 2010 reached $10B, and were projected to increase to $12.1b in 2011, up 20.7% from 2010. Gartner Group estimates that SaaS revenue will be more than double its 2010 numbers by 2015 and reach a projected $21.3b. Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market was forecast to reach $3.8b in 2011, up from $3.2b in 2010.

And, as indicated earlier in this post, there are a number of eDiscovery tool vendors that offer SaaS delivery options. However, don't confuse SaaS delivery with providing eDiscovery in the Cloud. There is a major difference.   Since it is highly unlikely that the eDiscovery platform is in the same physical location as the data, eDiscovery SaaS providers requires users to physically collect data and move it the data center (physical location) that houses the eDiscovery platform.    Once loaded onto this platform, the data is processed and then users can access it over the internet. I contend that this approach of moving data to the eDiscovery platform is not that different that what has occured over the past 5-10 years with other enterprise data and is not eDiscovery in the cloud. True eDiscovery in the Cloud requires the eDiscovery software to reside in the cloud. This implementation would in fact be considered SaaS but is much different than the current generation of eDiscovery SaaS platforms.

Platform-as-a-Service (PaaS)
Platform-as-a-Service (PaaS) is a category of cloud computing services that provide a computing platform and a solution stack as a service. In the classic layered model of cloud computing,the PaaS layer lies between the SaaS and the IaaS layers.Various types of PaaS vendor offerings could be extensive and will include a total application hosting, development, testing, and deployment environment, along with extensive integrated services that consist of scalability, maintenance, and versioning.PaaS offerings may also include facilities for application design, application development, testing, deployment and hosting as well as application services such as team collaboration, web service integration and marshalling, database integration, security, scalability, storage, persistence, state management, application versioning, application instrumentation and developer community facilitation.

It is within the Platform-as-a-Service (PaaS) layer where eDiscovery services belong. In fact, this may be a good time to coin the term eDiscovery-as-a-Service (eDaaS). Unfortunately, as of the writing of this Blog post there are no eDiscovery vendors that offer eDiscovery-as-a-Service (eDaaS). However, there are several vendors that I am aware of that are working on offerings to be released in early 2012. And, since providing eDaaS as a standard option for any PaaS offering makes so much sense and could provide a first mover and key competitive advance for Cloud Service Providers (CSPs), I predict that we will see several eDaaS offerings before the end of 2012. And, I also predict that once the eDaaS offerings hit the market, the legacy eDiscovery platform providers will be forced to re-evaluate the value propositions of their non eDaaS offerings in the cloud.

Please note that I am working on a research paper investigating how the CSPs support the eDiscovery requirements of their client bases and what next generations tools (eDaaS) are going to be available to assist the CSPs with these requirements.

Infrastructure-as-a-Service (IaaS)
Infrastructure-as-a-Service (IaaS) is the least glamorous of the cloud computing layers but provides the real technical "infrastructure" to enable cloud computing to exist.  Infrastructure-as-a-Service (IaaS), simply stated, provides a physical yet virtual processing environment along with raw (block) storage and networking. Rather than purchasing servers, software, data-center space or network equipment, enterprise clients instead buy those resources as a fully outsourced service with the ability to scale up processing, storage and even networking as may be required. There is a lot more technical details to IaaS. However, for the purposes of this post, my definition is adequate to get my point across.

CONCLUSION
Cloud computing is now the defacto Information Management (IT) architecture that enterprises are either already utilizing or have plans to utilize in the near future. Cloud computing architecture is categorized into three (3) layers; Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS). It is within the Platform-as-a-Service (PaaS) layer where eDiscovery services or eDiscovery-as-a-Service (eDaaS), belong . Unfortunately, as of the writing of this Blog post there are no eDiscovery vendors that offer eDiscovery-as-a-Service (eDaaS). However, there are several vendors that I am aware of that are working on offerings to be released in early 2012. And, since providing eDaaS as a standard option for any PaaS offering makes so much sense and could provide a first mover and key competitive advance for Cloud Service Providers (CSPs), I predict that we will see several eDaaS offerings before the end of 2012.

Labels: Amazon, AWS, Cloud Service Providers, CSP, eDiscovery, IaaS, Infrastructure-as-a-Service (IaaS), Litigation, PaaS, Platform-as-a-Service, Saas, Software-as-a-Service

Wednesday, December 28, 2011

eDiscovery and the Lawyer's Duty of Competence

The level of eDiscovery knowledge and experience among attorneys is widely varied. Some understand the issues in-depth, others have a passing knowledge of the basics, and other do not have even a beginner’s comprehension of the issues. Those who fail to acquire a working understanding eDiscovery issues are doing a great disservice to their clients; they may even be committing malpractice.

I often preach that there were two obligations highlighted in the 2006 amendments to the Federal Rules of Civil Procedure. First, is the duty to disclose ESI when required. As is widely known, when litigation is reasonably foreseeable a party must prevent the destruction of all ESI that may be discoverable. When requested in discovery, this ESI must be disclosed. This a generally accepted principle. The second obligation, and in my view equally as important, is to obtain ESI in discovery from opposing parties and nonparties. Without a good understanding of eDiscovery issues, lawyers are not prepared to meet either of these obligations.

The need to have a thorough understanding of eDiscovery issues arises out of the attorney’s obligation to the client. Each lawyer owes a duty of competence to the client. The American Bar Association’s Model 1.1 of the Rule of Professional Conduct reads:

Rule 1.1 Competence
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation

Comment 6 to ABA Model Rule 1.1 states: “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.”

ESI has the potential to play a role in nearly every case and thus all lawyers must be competent in eDiscovery. Even the business lawyer who does not litigate cases must prepare his client for eDiscovery. Both in-house and outside counsel have been sanctioned for failure to preserve and disclose ESI. Each case must be evaluated to determine the extent of the role eDiscovery will play.

The abundance of ESI, from email to Facebook, copy machines to cell phones, is so overwhelming that it is very rare when a case does not require an understanding of eDiscovery issues. Some lawyers may believe that eDiscovery issues do not permeate their practice or the kinds of cases they handle. They may believe that eDiscovery only applies when large parties do battle and have the resources necessary to hire experts to do ESI searches and to pay teams of lawyers to pour over the results for large volumes of records that are generated by these searches. This is not true.

eDiscovery is important in almost every case. The divorce lawyer will want the email, Facebook, Twitter and other ESI of the soon-to-be ex-spouse. The bankruptcy lawyer representing creditors may want to search for evidence of other assets. A criminal defense attorney will want to look for impeachment evidence. The treasure trove of information contained in ESI needs to be considered by every litigator.

Some lawyers may avoid eDiscovery issues because they fear it cost-prohibitive for their clients. eDiscovery does not have to cost the clients hundreds of thousands of dollars. Depending on what is needed in the case, less costly options are available. After a thorough analysis of the case, the lawyer can provide options to the client depending upon what the client can afford. Ultimately, this the cost of eDiscovery is the client’s decision, but only the lawyer who is thoroughly versed in eDiscovery will be able to explain the options, the impact each option will have on the case, and how the costs compare with the likely benefits.

I urge lawyers to grow in their knowledge of eDiscovery issues, to become inquisitive as to how it can be integral in the cases they handle, and to use this knowledge to be zealous advocates for their clients. There are many organizations that can help walk attorneys through these issues, but regardless, it is each lawyer’s ethical obligation to competently represent her client.

Labels: ABA, ABA Model Rule 1.1, Amercian Bar Association, eDiscovery, FRC, Litigation

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