Loading ...One of the more common questions that comes up with clients is, “what are companies doing in terms of eDiscovery purchasing?” This question is cringe-worth simply because it’s very difficult to answer. The reality is that, while there are some common trends, every company is different and the disconnect between legal and IT is so large that gauging eDiscovery purchasing habits is complex.
Covering the eDiscovery market is way different than analyzing the market for ERP or CRM applications. Those markets have a bit more straightforward supply and demand models. eDiscovery encompasses not only multiple applications, but very diverse ways to execute and practice tactics. For example, one company might want to know what kinds of collection and legal hold applications make sense and look at what peer companies are doing as a comparable. But, it’s not that simple – what peer companies are doing is dependent on a wide variety of factors:
- Litigation profile – simply put, if companies feel like litigation is not a big problem for them, they are unlikely to spend much on eDiscovery applications (even if they should simply because proactively managing information provides ancillary benefits like improved knowledge sharing)
- Balance of power between legal and IT – if a General Counsel is the dominant personality in an organization, the company might not spend anything on eDiscovery applications because legal tends to want to get rid of information; if a CIO has all the power, the company might build up it’s infrastructure for information management. The reality is that much of the purchasing is based on personality and power rather than on logic and true benefit.
- Risk tolerance – some companies want to manage risk and therefore aggressively pursue initiatives like legal hold and early case assessment (ECA); others would rather incur risk than cost. It can be very difficult to predict which company will do what.
This is not a complaint about how hard it is to be an analyst in the eDiscovery industry. Actually, this situation is part of what makes this market so much fun to cover – it’s unpredictable and it’s very necessary to look beyond the obvious and examine every angle. Clients still look for trends even though they can be hard to spot and may not be an exact fit. To that end, I’ve tried to graphically convey some of the shifting purchasing trends in the eDiscovery world. As the following chart shows, IT features are becoming the priorities in the eDiscovery applications market. Bells and whistles for legal users are still important, but as enterprises start to deploy eDiscovery tools, they will look more and more for stable, scalable applications.
eDiscovery Buying Criteria
Agree? Disagree? Let us know what you think.
I find it interesting that ‘third party validation’ isn’t considered a trend moving forward, but one of an outdated legally driven model. I think the IT goals listed can be achieved while allowing for third party validation if needed.
You can argue that newer ED technology can/has already solved the problem of allowing for inhouse/self collection yet still allow for third party validation.
July 14, 2010 at 12:22 pm
dkennedy
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Dennis:
I actually agree with you – both IT and legal departments at corporations are going to need external experts to monitor and validate both processes and execution of eDiscovery tasks with the tools for in-house collection and preservation. Will some level of third party validation of the tools be a purchasing requirement? To some extent – yes, but likely in the same the same way that third party validation comes for existing tools like archiving. Corporations will turn to trusted analysts, etc for advice and validation; I’m not sure there will be some kind of Good Housekeeping Seal of Approval for eDiscovery applications just yet. But, I’m always interested in other points of view on that issue. Thanks for your comment!
July 14, 2010 at 1:46 pm
Barry Murphy
Member Type: Other | Role: Consultant | Size: Solo | Years of Experience: 15 | Certifications/Licenses: N/A
A reasonable portion of my corporate consulting engagements equates to definition, documentation and ‘validation’ of their business practices using the chosen eDiscovery technology. I would love to believe that most software providers have actually put their products through some form of third party usage based testing, but that has not been my experience in the field. Clients are starting to insist on some form of defensible process that documents their reasonable diligence, but the providers still seem to be lagging. They all have QA testing, but that seems to be limited to break testing and compatibility verification. At least the software providers who have a deep service channel get feedback from their partners.
One step at a time.
Greg Buckles
July 16, 2010 at 3:22 am
Greg Buckles
Member Type: Other | Role: Consultant | Size: Solo | Years of Experience: 22 | Certifications/Licenses: court certified expert witness
Interesting observations. At the end of the day, it is all about Information Asset Management with legal response (electronic discovery) as just one point of output. But until the problem of IAM and legal response is uniformly accepted on those terms, there will be much churn with many pigs at the trough.
The fundamental drivers will be regulatory. The way agencies are tapping into accountability for social network presence demonstrates the public technology ecosystem and external demand will continue to pressure both IT and legal to respond. Yet systems developers and their clients are still groping with messaging (email and chat) and ‘unstructured data’ solutions that ignore a growing body (perhaps as much as 40%) of available content.
True ‘end-to-end’ EDRM solutions are a chimera. EDRM itself is a stopgap. Until serious offerings are available that address the core problem of legal response from a truly managed information structure, the buying market will continue to be a source of fun and amusement, albeit perhaps black humor.
July 21, 2010 at 1:54 pm
wtkjd
Member Type: Firm | Role: Attorney | Size: Solo | Years of Experience: 26 | Certifications/Licenses: JD; CA Bar