eDiscovery in the Cloud is Obviously Working

eDiscovery in the cloud is obviously working as this week Autonomy. a global leader in eDiscovery and GRC infrastructure software for the enterprise, announced that  they are now managing over 17 Petabytes of email, documents, and multimedia data on 6,500 servers on 8 data centers around the world. Seventeen Petabytes is equal to more than 11 times the size of the 10 billion photos on Facebook, or 226 years of HD video.

I think that this announcement answers questions about whether or not the enterprise will allow its data outside the firewall.  And, to a certain degree answers the debate about the future of cloud computing in the eDiscovery and GRC markets.

As a cloud based, software-as-a-service (SaaS) evangelist of the past 10 years,  I am really pleased to see that cloud based computing is gong mainstream and gaining momentum within the enterprise.  And, I am even more pleased to see these trends in eDiscovery and GRC market.

However, as I am also a best-in-class advocate and evangelist, it is disappointing to see that a vendor with a monolithic solution based on a proprietary database (IDOL) seems to have taken the lead in cloud based computing.  Don’t get me wrong, I am very impressed with what Autonomy has accomplished and have tremendous respect for their technology.  That being, said I am now curious about market penetration and acceptance, hosted data amounts and SaaS based application utilization by best-in-class component technologies in the same markets that Autonomy is playing.

We all know about the success of salesforce.com.   I wonder which technology vendor or technology vendors will take on Autonomy with an more open systems best-in-class type approach and rise to the level of success as a salesforce.com?

In some respects, the answer to the question of who is competing with Autonomy may be found in the fact that there are no other providers that have put all of the “best-in-class” solutions together along with workflow management under a single enterprise class data center.  And that each of the individual SaaS based technology providers is only marketing a component of the overall solution and therefore doesn’t really have a single source solution to compete with Autonomy.

So, is the answer that some service provider needs to bring all of this together?  I have been studying several potential candidates over the past 12 months and will be reporting on their offering(s) and their potential impact on the market before the end of the year.  Stay tuned.
The full text of the Autonomy press release is as follows:

Cambridge, UK and SAN FRANCISCO – October 12, 2010 – Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, today announced that Autonomy's private cloud computing platform has reached a new data processing milestone, extending its lead as the world's largest private cloud. Autonomy private cloud now manages over 17 Petabytes of email, documents, and multimedia data on 6,500 servers on 8 data centers around the world. Seventeen Petabytes is equal to more than 11 times the size of the 10 billion photos on Facebook, or 226 years of HD video.

The continued dramatic growth of Autonomy's private cloud is the result of Autonomy's unique, meaning-based approach to cloud computing, as well as the rapid adoption for multichannel marketing applications. Powered by Autonomy's Intelligent Data Operating Layer (IDOL), Autonomy's private cloud automatically recognizes concepts and patterns in the billions of files it ingests and indexes every day. The ability to automatically understand the meaning within all forms of data provides a significant advantage to the customer, whether it's a compliance officer or lawyer responsible for archiving and reviewing emails, video, and social media posts around a particular case, or a chief marketing officer looking to deliver the most relevant and proven content to a website visitor in real-time.

As a result, Autonomy is now the dominant leader in a range of private cloud computing applications. Autonomy is driving rapid uptake amongst marketers looking for a cost-effective, fast, and turnkey platform for hosted marketing applications. For instance, a marketing team can form a virtual chain with its network of design and advertising agencies, to securely collaborate on the development of rich media content. Autonomy's cloud-based marketing modules include Autonomy Optimost, Autonomy TeamSite, and Autonomy Virage MediaBin.

Likewise, corporate legal departments are increasingly turning to Autonomy to form a virtual private chain with their law firm partners, in order securely collaborate on relevant information for a particular investigation or case. This cloud-based approach to eDiscovery results in radically compressed timeframes for the eDiscovery process. Autonomy's private cloud processed 36,000 eDiscovery audits year-to-date, producing 48 Terabytes of eDiscovery data. Autonomy's cloud-based information governance modules include Autonomy Consolidated Archive, Early Case Assessment, Introspect, Legal Hold, Records Manager, Supervisor, and iManage WorkSite.

"Most technology providers consider cloud computing to be nothing more than making the contents and applications in a digital storage box accessible via the internet," said Mike Lynch, CEO of Autonomy. "However, Autonomy's meaning-based approach to cloud computing brings intelligence to a range of applications, from archiving to eDiscovery to marketing. Autonomy provides the ideal platform for our Protect and Promote customers, who are dealing with an increasing array of content to govern and apply policy to, produce for eDiscovery investigations and review, and who are seeking greater agility in launching multichannel campaigns that resonate with their customers."
Autonomy's private cloud is hosted in state-of-the-art and high-security data centers. The data centers are under 24/7 surveillance, and each one undergoes annual Statement of Accounting Standard number 70 or "SAS 70" audits. Two fully synchronized, geographically separated systems provide complete data and system redundancy and parallel processing of all tasks. The design addresses all aspects of multi-tenancy, such as multiple firewalls and virus protection, and is ideally qualified to support the performance and volume requirements that are necessary for processing the rapidly expanding number of corporate formats and unified communications – including all forms of text, audio, and video.

About Autonomy
Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. IDC recently recognized Autonomy as having the largest market share and fastest growth in the worldwide search and discovery market. Autonomy's technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy's software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.

Autonomy's customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds Banking Group, NASA, Nestlé, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit http://www.autonomy.com/ to find out more.

Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners.

Labels: Autonomy, Compliance, eDiscovery, Governance, GRC, Litigation Service Providers, Litigation Software, Risk and Compliance

posted by Charles Skamser @ 10:17 AM 0 Comments

ABA Issues Formal Opinion 08-451 Outlining SOPs for Outsourcing Litigation Services

On Monday, the American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility released a statement regarding a new ethics opinion (Formal Opinion 08-451), which concludes that U.S. lawyers can outsource legal and nonlegal work provided that they adhere to ethics rules regarding competence, supervision, protection of confidential information, reasonable fees, and not assisting in the unauthorized practice of law. The opinion, entitled "Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services," outlines the ethics obligations of lawyers and firms that wish to utilize legal and nonlegal outsourcing.

Stating that "[a] lawyer may outsource legal or nonlegal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client," the opinion notes that lawyers and law firms engage lawyers and nonlawyers for various legal and nonlegal support services, ranging from "the use of a local photocopy shop for the reproduction of documents, to the retention of a document management company for the creation and maintenance of a database for complex litigation, . . . or even to the engagement of a group of foreign lawyers to draft patent applications." The opinion acknowledges, however, that "[t]he challenge for an outsourcing lawyer is . . . to ensure that tasks are delegated to individuals who are competent to perform them, and then to oversee the execution of the project adequately and appropriately."

Given the rapid rise in the cost of eDiscovery over the past 24 months coupled with the undeniable financial opportunities offered by our global economy and the recent application of Internet based technology to the litigating services market, this opinion is basically setting operating standards in a "market" where most of the horses have all left the barn, the door is still wide open and we are all wondering about the competence of the horses that haven't left.

All that being said, given the fact that this is not the mission of the ABA to endorse any practices and therefore, regardless of the press releases that are cropping up from litigation services vendors, this is not an endorsement of outsourcing your litigation services on-shore or off-shore.

It does, nonetheless, provide a framework and set of criteria for outsourcing as follows:

1. The outsource has the "legal knowledge, skill, thoroughness and preparation reasonably necessary."
2. The client consents in writing, with a knowing acceptance of the risk of breach of attorney-client confidence.
3. Outsource work is properly supervised by US counsel, including appropriate protection of client secrets.
4A. The US lawyer checks background and references.
4B. The outsource legal education is comparable to a US legal education.
5. The outsource signs a confidentiality agreement.
6. The fee remains reasonable after including any US surcharge for overhead.

In an upcoming Blog posting, I will compare the costs of completing litigation services under several different scenarios:

1. Internally within the corporation
2. Externally, on-shore with outside counsel
3. Externally, off-shore with outside counsel
4. Externally, on-shore with a 3rd party service or technology vendor and/or consulting firm
5. Externally, off-shore, with a 3rd party service or technology vendor and/or consulting firm

I predict that some of your will be shocked at the wide variance in price and/or how much money you are leaving on the table.

Labels: ABA, ABA Formal Opinion 08-451, ABA Standing Committee on Ethics and Professional Responsibility, Amercian Bar Association, Litigation Service Providers, Outsourcing

posted by Charles Skamser @ 9:55 AM 0 Comments

Are Changes to the FRCP Increasing the Cost of Litigation?

Over the past year, in pursuit of everyone trying to figure out the best way to address all of the issues created by the changes to the Federal Rules of Civil Procedure and all of the resulting changes to state and local rules, I have worked with litigators from over 75 different law firm, litigation services professionals from 50 different service providers, technologies from 50 different litigation technology vendors and the General Counsels, Associate General Counsels and related IT professionals for over 25 Fortune 1000 companies. In addition to an incredible education of the current state of the litigation market and all of the associated technologies and new service practices, what I have taken away from this journey is a sense that we are still in the middle of a paradigm shift that is rocking the industry to its very core.

As such, I believe that the answer to the question about whether or not the changes to the Federal Rules of Civil Procedure and all of the resulting changes to state and local rules, is going to be different depending upon who you are asking.

Following are the results of the answers that I have gotten from the various groups that I meet with:

Litigators
Litigators are reporting that the changes to the FRCP and all of the resulting changes to state and local rules have required them to "go back to school" and learn a more about the technology and science of litigation and Electronically Stored Information (ESI) then many of them ever cared to know. I can tell you that the CLE classes on the effects of the changes to the FRCP that I teach have been full with a lot of very attentive attorneys.

In addition, litigators are now learning that litigation has gotten much more complicated and much more expensive. And, they are realizing that they are now required to solicit the assistance of technology and process experts are the very beginning of case to participate in pre meet and confer strategy sessions.

Further, whether they have been caught off guard or not, many litigators are finding that it is making more financial sense to settle their cases out of court due to the extreme cost of just getting prepared for trial.

Finally, although I am not a liberty to discuss the details of any of the cases that I have been involved in, I believe that there are an alarming number of new suits being filed against corporations by savvy litigators in which the "end game" is to force a settlement out of court due to the high cost of preparation and initial response.

Litigation Service Providers
As with Litigators, Ligitation Service Providers are reporting that the changes to the FRCP and all of the resulting changes to state and local rules have required them to "go back to school" and learn a more about the technology and science of litigation and Electronically Stored Information (ESI) then many of them ever cared to know. Having started in the legal services business providing copying services, the current surviving providers had to successfully make the transition to the world of imaging, coding, translatoin and hosting over the past several years. They are now faced with the even more daunting task of making the next leap to the world of Electronic Data Discovery and Computer Forensics. For a variety of reason, many of them will not be successful unless they embrace the eDiscovery Paradigm Shift, form new partnerships with technology vendors and consultants that can help them with the new paradigm and change their clients perceptions of what they can bring to the new ESI table. It is my opinion that based upon this classic paradgim shift, there is a tremendous opportunity for the Litigation Service Providers that successfully make the transition and a blunt reality of failure waiting for those that do not.

Litigation Technology Providers
As alluded to in my overview of how the changes to the FRCP have effected the Litigation Services Providers, we are in the midst of a classic market paradigm shift which casuse fear, uncertainty and doubt on the buyer side. As such, and is the case in any market where this occurs, it is an open season for technology providers to step in and fill the requirements gaps with new solutions. Since many of the posts on my Blog deal with my my opinions of all of the wonderful new technologies, I am not going to go into any detail in this post. However, I would like to mention that I believe that the biggest technology winner that will emerge from this opportunity will be the Software-as-as-Service (SaaS) deliver model. Its lesss expensive to develop and deliver, less expensive to use and enables very rapid and incremental updates.

The Fortune 1000
The changes to the FRCP and all of the resulting changes to state and local rules have had the most profound effect on the way in which the Fortune 1000 now have to manage with all things related to litigation. Frist and foremost, they can no longer ignore the whole area of what I am going to refer to as ESI Management including the development and implementaiton of a proper rentention policy and the asssociated infrastructure without taking on the liability of severe financial consequences for no compliance.

In addition, ESI no longer includes just information on servers, desktops and lapstops. It now includes information stored on corporate issued thumb drives and other external storage devices, Blackberries and other PDA, cell phones and even information stored with third party email providers and a list of information that may be stored with applications delivered via a Software-as-as-Service (SaaS) model. And, since collection is no longer an option, IT departments may no longer have the expertise or experience to keep up.

Further, courts are becomming less and less tolerant of ignorance and/or inaction and therefore management of preservation notices and actual preservation have also become an area riddeled with the rick of sanction and servere financial consequences.

In summary, with the changes to the FRCP and all of the resulting changes to state and local rules, the Fortune 1000 can longer afford its IT departments to like its fathers corporate IT departments. The externally mandated compliance and litigation preparedness requirements are much greater and the consequences of non-compliance are server.

So, my conclusion is that the changes to the FRCP and all of the resulting changes to state and local rules probably seems like it has had a net result of making litigation more complex and much more expensive for everyone involved. And, with our country heading into a ression or a least a downturn, conducting successful litigation under the new requirements being impossed by the changes to the FRCP may seem like it has become out of reach financially for many. And, it may be for some time.

However, in the long these changes will enable our legal system as a whole and the individual participants more accurate and equal access to justice. Only time will tell.

Labels: Compliance, Discovery, Document Rentention Policy, eDiscovery, ESI, FRCP, Litigation, Litigation Service Providers, Paradigm Shifts, Preservation, Records Rentention, Saas, Software-as-a-Service

posted by Charles Skamser @ 10:17 AM 0 Comments

Interview with CEO of WorkProducts

As a followup to my previous posts about the new players in the Evidence Lifecycle Management (ELM) technology space, I found this great interview with Steve Lilley of WorkProducts on the DCIGInc.com Blog by Joshua Konkle. The Title of the post is "Don't be intimidated by legal technology".

Bridging the GAP between FRCP Requirements and IT Capabilities

As indicated in my previous posts on this topic, WorkProducts is a great example of techology that is bridging the gap between the new legal requirements as driven by the changes in the FRCP and IT capabilities. As previously reported, technologies like MatterSpace don't do anything that couldn't be done by expensive consultants. They just do it, quicker, more efficiently and, most importantly, for considerably less cost. It's not magic, it't just the natural progression of techology in markets, going through paradigm shifts, automating the definable and repetitive tasks in an effect to increase efficieny, reduce risk and reduce csots. Hopefully, at some point in the future, corporate GC's will be able to push a button and get a complete and early analysis of the issues and costs invovled in a potential matter resulting in the ability to determine how to proceed (i.e. settle out of court or continue to the Meet and Confer). And, we may not be there yet, but it appears that MatterSpace from WorkProducts is taking our industry in that direction.

500% Annual ROI with MatterSpace

In fact, WorkProducts contends on the WorkProducts website that MatterSpace allows the user to cull data, which when combined with de-duplication, results in a 75% reduction in the volume of data given to the EDD vendor and a 50% reduction in the volume reviewed by outside counsel. And, that these improvements translate directly into cost savings, resulting in a Return on Investment (ROI) of 500% per year with MatterSpace. If these ROI's calulations are even half true, I can't image that any enterprise with even a couple of cases per month would not be interested utilizing this technology.

Steve Lilley Background

Steve Lilley is the founder and CEO of WorkProducts, the creator of MatterSpace®, a market-leading Evidence Life Cycle Management solution. Steve has more than 20 years of experience in founding/building leading companies in the litigation and electronic discovery space, including serving as SVP for iLumin (acquired by CA) and founding Data Imaging, Inc. (acquired by Document Technologies).

Read the Entire Post: http://www.dciginc.com/2008/02/interview-steve-lilley-workproducts-pt1.html

Labels: eDiscovery Consultants, ELM, FRCP, Geoffrey Moore, Instant Messaging, Litigation Service Providers, Litigation Support Software

posted by Charles Skamser @ 8:43 AM 1 Comments

Proactive Enterprise eDiscovery Should be a Standard Business Practice

With the changes in the Federal Rules of Civil Procedure at the end of 2006 along with the subsequent and associated sanctions and law suites, corporations that face litigation on a fairly regular basis should consider treating proactive ediscovery as a standard operating processes vs. a series of discrete events.

For example, many organizations are now taking steps toward automating the litigation hold process. As part of this process, witnesses (e.g. employees, vendors, etc.) will automatically receive instructions to suspend the destruction of documents that might be potentially pertinent to an anticipated litigation/investigation matter. However, even in the face of the well know federal and state actions and sanctions that have been broughg against those organizations that do not comply, there is strong evidence that preservation orders, when emailed or even handed out, will not be followed.

As such, these organizations are being forced to turn to more automated and integrated ESI detection and collection to accompany the hold order. As a results, we are quickly seeing explosive growth in what has been tagged Evidence Lifecycle Management (ELM).

Although a somewhat disjointed market that still requires a fair amount of consulting, we are starting to see some very good semi-integrated solutions from vendors such as Kazeon (http://www.kazeon.com/), Clearwell (http://www.clearwellsystems.com/) and WorProducts (http://www.workproducts.com/) that include features such proactive identification of employees (i.e. potential custodians), mapping of their data, preservation and hold lifecycle management, automated collection, culling and de-duping, preservation management, Electronic Data Discovery and Computer Forensics, Online Review, Hosting and long term Storage.

As anyone that reads this Blog on a regular basis knows, I am a big proponent of SaaS and onDemand delivery and therefore will be looking for the first vendor or consortium of vendors that develops and releases a true onDemand SaaS ELM solution.

Stay tunned for the results of my investigation.

Labels: Chain of Custody, eDiscovery, ELM, ESI, Evidence Lifecycle Management, FRCP, Litigation, Litigation Service Providers, Litigation Support Software, Preservation, Software-as-a-Service

posted by Charles Skamser @ 8:31 AM 0 Comments

Are Legal Service & E-Discovery Providers Becoming a Commodity?

Getting back to the grind this morning, I found this really great and thought provoking post on the LAWTECH GURU BLOG by Jeff Beard.

All technology markets go through very similar expansion and contraction based upon a combination of buyers reacting to what Geoferry Moore calls "Crossing the Chasm" and the normal consolidation of technology and service providers after new technology and services becomes a commodity. Where we are in this cycle regarding eDiscovery and Legal Services is an interesting question and one that I would like to address. However, I will need some time to gather my thoughts and plot my pithy response. As such, stay tunned. In the mean time, Jeff's Blog post is a really great read!!!

Are Legal Service & E-Discovery Providers Becoming a Commodity?
It's funny how personal events tend to lead me into various thoughts and discussions about the legal market. Yesterday I flipped on my digital cable box to see that effective with the new year, Comcast has taken over Insight's cable business in Illinois. Knowing that Comcast has had several years of turbulent press (e.g., regarding tracking customers' web history, firing customers who used "too much" of their broadband connection, and the latest controversy over interfering with customers' BitTorrent file transfers), I did a little Googling to reacquaint myself with the latest news and blog posts.

In doing so, I found this insightful post at the Manifest Destiny blog. The gist is that broadband ISP providers are afraid to admit to themselves that they're just selling a mere commodity -- shipping bits. And, that it's virtually impossible for them to be honest with their customers if they can't first be honest with themselves. Before I relate this to the legal market, let me quote the following to help put things into clearer perspective:

"It must be pretty awful to wake up one day and suddenly realize that you're in a commodity business. As a software developer I've at least had a taste of it - it was unsettling to realize that an army of developers in Bangalore could churn out code better than I could, dollar for dollar. I had fooled myself into believing that what I was selling was so extraordinary and great that people would be begging - begging! - for me to deign to craft some SQL and PHP on their behalf. Such a rarified gift! Such a technical artiste!

When you realize that you're selling a mere commodity your ability to profit (and extract rents) from your cleverness is severely limited. It won't help to roll out an ad campaign or make the product mint-scented. You can't differentiate your product from your competitors'. It's all pretty much the same. The users can't tell the difference. All you can do is sell as much of it as you can while spending as little money as possible."Which got me to thinking, "Haven't we been experiencing this in the legal market?" Legal work is being outsourced to armies of contract reviewers both here and abroad. Some of these lawyers aren't employed directly by law firms, as e-discovery providers are quick to tout their expanding review centers and legal outsourcing companies are growing. There are more e-discovery service providers than hardly anyone can keep track of (although my friend George Socha provides great value in doing so with Tom Gelbmann). Like the constant M&As in the wired and wireless telcos, e-discovery vendors are continuously being merged, acquired, and/or creating strategic partnerships with their "coopetition".

Is "Distinguishing" Easier Spun Than Done?
At various conferences this past year, such as ILTA's and ACC's annual conferences, plus the IQPC 4th E-Discovery Conference, I've asked many e-discovery vendors -- especially the conversion and hosting providers -- what distinguishes their services from their competitors? Some were quick to mention their proprietary web-based hosting and review software, while others point to their lower-cost contract legal reviewers, high-tech review centers, high-volume capacity, and/or quick turnaround. A few also mentioned either their top Socha-Gelbman survey rankings and/or their blue chip client list. While certainly impressive factors, these last two didn't serve to distinguish what they actually do.

Very few, if any, truly offer the full soup-to-nuts range of services all by themselves (i.e., without partnering). This isn't a criticism, mind you, as it's extremely difficult to build and excel in all aspects of the EDRM model by yourself, especially in the deadline-driven high-volume and high-stakes cases. Instead, several have distinguished themselves with niche software mousetraps for litigation holds and e-mail analysis. Others have begun building litigation-readiness consulting teams to get their feet in the door. I have to say I sincerely appreciated all their candor and hospitality, and overall found it to be a very congenial group of dedicated professionals trying their best to help their clients.

But for the most part, when I speak with lawyers and e-discovery consultants (some of which are both), many feel it's difficult to see any significant differentiation from a client's perspective, at least until they've had a chance to work together on projects. It's far easier for me to speak with friends and colleagues at law firms and in-house legal departments to hear who they've had good luck with (and those who have not been so good), than in trying to determine this from the e-discovery and law firm providers themselves. In short, even their best sales and business development executives have some difficulty with this, and it's understandable.

Now don't get me wrong -- legal and e-discovery providers offer valuable and necessary services, especially in light of the wide and blindingly bright spotlight cast by the increased focus on ESI. Rather, I'm simply left wondering how many firms and providers have truly recognized the market has already shifted into a more pronounced stage of commoditization. Everyone talks about providing "value-added services" while sustaining growth and profitability. The savvier ones focus on the client value not as the lower per-unit cost (thus recognizing the commoditization and competition issues), but on the overall cost savings achieved in successfully and timely resolving the matter -- all while avoiding the costs and negative publicity of discovery sanctions.

Larger law firms have been building up their litigation support and related IT professionals, and changing focus to make them a profitable line of business rather than a cost center. Yet some are still challenged to find this magic path while being extremely cautious (and rightfully so!) in taking on the liabilities and risks associated with the more forensic aspects. In addition, corporate counsel routinely say the top large law firms generally all provide high-quality services. In my opinion, this just adds to clients' perception of commoditization and their increasing desire to receive them at reduced or fixed cost -- assuming most everything else is being perceived as nearly the same.

Where Does This Leave Us From the Client's Viewpoint?
Answer: A rapidly-changing, crowded, and confusing set of choices. All of which makes it challenging for any single provider to, well, single itself out or make a large enough splash. Of course, a top-ranked spot still helps as lawyers tend to go with whomever most others are using -- as long as their professional network confirms good results. Offering a unique niche product or service is good too, and even better when properly aligned with one's other offerings and resources. Making it onto a client's preferred provider list is still incredibly important. Getting there and staying there without cannibalizing future revenues is the challenge. To borrow Bill Engvall's tagline, "Here's your sign" of legal commoditization.

Most recently, we've seen the entré of automated document search providers. In attempting to prove their solution is significantly more accurate and perhaps less costly than manual review, they are beginning to distinguish themselves from commodity-level contract reviewers. Indeed some of us are keeping an interested eye on these developments. While still nascent, there is potential here if they can deliver on their assertions and convince legal decision-makers that it's worth a try. Only time will tell if this is sustainable or just another tech fad that didn't catch on with more conservative lawyers. And if it does prove sustainable, how long before it too becomes commoditized? Or will there be a legal market "Google" to emerge as the distinguished leader?

As recessionary concerns grow, it will be even more incumbent on corporate counsel to continue to reign in legal costs while generating positive results for their corporate client. Some types of litigation matters increase in bad economic climates. Which means, of course, that the next few years could bode well for those service providers who can distinguish themselves with their potential client base and return consistently good results at an acceptable price. I'd even say the latter is the best way to distinguish yourself in the long run. As we all know from recent cases and the press, bad news travels fast.

As these services become even more commoditized, however, there will likely be even more shakeout and consolidation among providers. Now is a good time for those looking to fill in their gaps. Corporate clients generally prefer more depth in their outside providers. Not to mention their purchasing departments likely have been minimizing the number of outside suppliers to gain better pricing advantage and to simplify (i.e., reduce) their vendor administration overhead. They will likely provide some pushback to legal departments seeking new providers. In some cases, this will extend the RFP process unless or until corporate legal puts their foot down and tells them they need someone "Now!" So while there will be growth, particularly among e-discovery providers, expect it to be rather dynamic in terms of the overall player makeup. Like Comcast above, I expect the larger players will enjoy a larger land-grab. We'll also see a number of middle and smaller players assimilated or perhaps relegated to the less complex, more localized matters, where low cost and local access for clients is very attractive. We've seen this time and time again in the scanning and coding industry.

However, there's no magic crystal ball, and only time will tell how the legal market responds. There will be some legal decision-makers who have already recognized the importance of addressing these issues early, and many who will be economically cautious, only paying as needed. Sometimes that saves money, and sometimes saving money gets very expensive on the clean-up side. That's where having a good discovery advisor-partner is worth its weight.
We'll continue to see further consolidations and partnerships among e-discovery and other technology providers. We'll see more outsourcing, even if it's only internal to that provider (think coding banks in India and China, for example), to increase their global reach and financial efficiencies. And like my cable TV, we'll be launching our browsers or RSS readers only to find that ABC provider is now part of XYZ. Stay tuned...

Labels: Crossing the Chasm, eDiscovery, ESI, Geoffrey Moore, Inside the Tornado, Litigation Service Providers, ORT

posted by Charles Skamser @ 9:35 AM 1 Comments

Has the Need for EDD hit Small Markets?

I talk to 15 or 20 different Litigation Service Providers and at least 10 law firms througout the country every week regarding the Litigation Lifecycle, EDD and the technologies and services that are being used the most and having the biggest impact on day to day operations and case management. As such, I have a pretty good pulse on what the market is asking for and what the service providers and vendors are doing to fulfill these needs.

First of all, its an understatement to say that the market is growing at an accellerating rate. According to the Socha-Gelbmann Survey it is already a $2B market. However, what I have been investigating over the past couple of weeks is whehter all of this growth is with the Fortune 1000 and the big law firms in the large metropolian markets or if the need for EDD has made its way into the small and medium sized markets and thererfore the law firms and litigaton service providers that support these markets?

I think that the answer is yes in regars to the market and no in regards to whether or not the law firms and the service providers have the ability to provide the EDD support that is required.

Obviously, no matter what size market you live in, if you are involved in an IP, sexual harrassment, Human Resources or stock fraud case of any kind, ESI and therefore EDD is more than likely going to be a part of the case. As an example, just becuase you live in Eau Claire Wisconsin does mean that you don't have a laptop and use email. So, just like any other custodian, you are going to have 90,000 pages of potentially discoverable documents or about 1.5 GB.

However, what my travels and discussions have uncovered is that there are very few if any support infrastructure in these smaller markets to support these cases and thererfore the litigants are having to go to larger markets. As an example, I talked with the owner of a litigation services company in a medium sized market this past week and asked if they had "geared up to support eDiscovery" and if so, how much collection and EDD they were doing. He indicated that they really hadn't invested any resources in eDiscovery because they were not seeing very much activity. I countered by asking if maybe he wasn't seeing much activity becuase the market in general and his client base specifically didn't view his organization as capable of supporting eDiscovery and therefore were not even talking to them about it.

I am interested in input and comments on this issue and will continue to post my experiences and finding as they occur.

Labels: Discovery, eDiscovery, ESI, FRCP, Litigation, Litigation Service Providers, Medium Markets, Small Markets

posted by Charles Skamser @ 4:51 PM 1 Comments

EDRM XML Adaption Rate for End-Users

It appears that eDiscovery vendors such as Catalyst, Exterro and ONSITE3 are starting to adapt the new EDRM XML standard. I wonder what the adaption rate will be for end-users?

The goal of the EDRM XML project is to provide a standard, generally accepted XML schema to facilitate the movement of electronically stored information (ESI) from one step of the electronic discovery process to the next, from one software program to the next, and from one organization to the next. The ESI includes both underlying discovery materials (e.g., email messages and attachments, loose files, and databases) and information about those materials (e.g., the source of the underlying ESI, processing of that ESI, and production of that ESI).

For copies of the EDRM XML XSD version 1.0 and related materials, please go to the EDRM XML Downloads site

Labels: Discovery, eDiscovery, EDRM, Litigation, Litigation Service Providers, XML

posted by Charles Skamser @ 4:33 PM 0 Comments

Local Copy Shops in the New eDiscovery Paradigm

Historically, small to medium sized local Litigation Service Providers built very lucrative and sustainable business models around providing dependable and personal paper copying and imaging services for their local legal markets. Friday morning Doughnuts for the paralegals, golf outings for the partners, an occasional tradeshow boondoggle for the associates, and great Christmas gifts for everyone was the magic formula for maintaining these relationships in a market where there wasn’t any hope of developing any type of key competitive advantage beyond owning the relationship.

There was, for a time, some amount of success for national players entering the local markets using what they believed were economies of scale. This assumption has long since been proven false. And, recently, some of the more successful local providers have played their exit strategy cards by either merging with or selling out to regional rollup players. However, at least for now, these small to medium sized Litigation Service Providers still own the local markets.So, how are these providers going to react to the new eDiscovery Paradigm? Or, of even more significance to the long term and continued success of these providers, how are their clients going to react to their lack of ability to offer viable solutions in the new eDiscovery Paradigm? During the copy boom years, it wasn’t too hard to offer a quality product. And, even with the advent of imaging, it still didn’t take a rocket scientist to offer a quality product. However, now these providers have a whole new set of issues driven by changes in the rule of civil procedure at the both the federal and state levels along with all of associated and required technologies. Of even more concern is the fact that mistakes and quality control issues can now lead to sanctions or worse for the litigator and its partners.

As a result, Friday morning doughnuts can no longer be the determining factor in who firms choose to complete its litigation services work. It’s now a matter that can be at the very heart of a firm’s success of failure.

As any successful business strategist knows, “turmoil creates opportunity”. So, I believe that there are some tremendous opportunities in this market and a result there are going to be some big winners and some big losers.

In the coming weeks, I will be posting my impressions of how these dramatic new requirements from the new eDiscovery Paradigm will affect the small to medium sized local Litigation Service Providers, who I believe will survive and who I believe will not and what I think the magic formula is for continued success in this market. I would encourage anyone reading this Blog with any opinions and/or stories regarding the future of these providers to submit them for inclusion in my report.

Labels: Discovery, eDiscovery, ESI, FRCP, Litigation, Litigation Service Providers

posted by Charles Skamser @ 5:12 PM 0 Comments