Monthly Archives: January 2024

With eDiscovery providers large and small being gobbled up in the consolidation rush, the odds are good that one of your preferred providers will be rollup up into KrolLDiscovery, DTI or Consilio at some point. This trend has VC’s and investment banks trying to figure out how to minimize the multiples paid while maximizing the ‘synergy’ between companies. So what does that mean when your favorite sales rep is lost to the inevitable post acquisition RIF and the header has changed on your latest invoice? The reality is that no one can predict the fallout from a merger or acquisition (M&A) in mid review or post production defense of process. I have guided clients through migrations, renegotiated terms and performed ‘Humpty Dumpty’ exercises to reconstruct years of eDiscovery history after the primary players have moved on to greener pastures. Most of the time, it has been business as usual from the client perspective while provider employees scramble to figure out new protocols and technology from the parent company. All of this M&A activity makes a good research topic and hopefully a better webinar for ILTA on April 12th at 11am CST (link to be posted asap). So take my 1 minute survey and shoot me an email if you have provider M&A war stories to share. As always, if you want to see a good list of recent M&A activity, check out Rob Robinson’s Complex Discovery page.

It always fascinates me to see service companies dare to transform themselves into technology sales. So many of the earliest eDiscovery companies started in firms or scan shops who hired developers to meet client’s requirements when there was no acceptable Off-The-Shelf (OTS) software available. I was one of those corporate clients writing functional product requirement documents for my providers when regulators made the first demands for native email productions. Doing a briefing with Sandra Serkes about the evolution of Valora Tech was a trip down memory lane. Valora was founded as a typical service provider with an emphasis on records management. They developed custom automated document data mining, categorization and analytics software to meet client demands. The trick for any small custom development shop is to rise above the individual client requirements to create a solution platform that meets the pain points of the broader market. In Valora’s case, they went from automatic BIB coding to create their PowerHouse data mining platform to process and categorize live enterprise data. This is a lofty goal and I am the last person to hype something that I have not seen function in a client’s environment. Too many technology giants have overpromised and underdelivered on enterprise automated categorization over the last decade. So take my briefing notes with my usual ‘trust but verify’ advice.

It has been a long time since I last compared OCR platforms like ABBYY Solutions, Adobe and other proprietary/OEM solutions. As much as I would love to say that paper is dead, boxes of old, weathered paper seem to pop up in many regulatory requests or matters. For many years, we automatically discounted OCR quality for older paper collections. We sent all scanned paper straight for manual objective coding prior to actual attorney review. That adds up fast and the $/doc are hard to justify when only producing a small percentage of that paper. So where does paper belong in this modern world of predictive coding/TAR? If we could trust the OCR engines to report handwriting, recognition levels and other exceptions, then we might be able to at least use modern text analytics and search on a portion of paper docs. The best solution will probably be a hybrid workflow that uses technology to sort and group prior to some kind of manual pass over portions of the collection. Have you or your provider built such a solution? Then I want to hear about it.

While conducting interviews for my upcoming ILTA webinar on coping with eDiscovery provider acquisitions, a sharp litigation support manager posed a hypothetical scenario based on the ransom hack of Hollywood Presbyterian Medical Center. We were discussing contingency plans, liability and concern over loss of data when a provider went out of business or was acquired. Very few of my initial interview respondents were seriously concerned with data loss for a normal M&A event. But at least one raised the concern about all that email data being uploaded into Relativity. How many attachment zips and links could hold the same kind of ransomware that encrypted Hollywood Presbyterian? Most of the hosting/SaaS contracts that I have recently reviewed for RFP engagements have clauses that make the client responsible for the content of all uploads and specifically call out malicious code. Does that take the provider off the hook? Would the bench grant a production date extension or relief if 2 months of review work product was made unavailable due to criminal hacking? Who is liable to remediate any lost work or data? Who should pay the ransom if it is low enough?

It seems that I was not the only one interested in how Valora’s PowerHouse could address the sprawling corporate digital landfills. DTI has made a minority investment in Valora to provide the functionality to their Information Governance clients. In the M&A world, a minority investment from what is essentially a giant channel partner is ‘neither fish nor fowl’to use a 17th Century idiom for something that is not easily categorized. We understand acquisitions, but Valora remains an independent organization from DTI and maintains its woman-owned status. The real question is how this will affect the nascent partner channel that Valora had just started to cultivate. Will DTI competitors be willing to use PowerHouse when they imagine that DTI can undercut them on the license fees? Will Valora essentially become a captive technology that is resold exclusively as a DTI service? This is essentially what happened to Patterns when FTI acquired Attenex. I don’t think that DTI’s investment comes at the price of Valora’s independent status, but I do think that the Valora team will have to work a bit harder to reassure potential channel partners or non-DTI customers of that fact. This investment confirms my new webinar slide (below) that shows DTI having the largest number of acquisitions/investments in the eDiscovery market. Early M&A Impact poll and interview results are starting to paint a picture of the concerns facing consumers when their provider is acquired or takes a large investment that changes their Go To Market strategy. So take my poll to see the results and join the ILTA webinar by Duane Lites and myself on April 12th to hear our take on how the eDiscovery market is consolidating and how you can mitigate the risks.

As many of you know, I have been off the speaker circuit for a while. I expected to be a bit rusty and asked my good friend Duane Lites (Dir. Lit Support for Jackson Walker LLP) to co-host and help prevent the Charlie Brown teacher voice syndrome. I was pleasantly surprised at the registration, attendance and retention numbers (always hard to keep busy peers on for a full hour). Best of all, I had fun doing the research interviews and the webinar. Great questions from the audience and I felt like we managed to deliver practical tips for mitigating the impact of a provider being bought. The full webinar recording is now on the ILTA website here:http://www.iltanet.org/viewdocument/managing-providers-in-a-shrinking-eI posted the deck and raw survey results on the eDJ Group site:http://www.edjgroupinc.com/researchILTA is looking for some members to interview for a follow up article. So if your corporate policies allow you to be publicly interviewed, shoot me a note and I will connect you with the right resource. My next public event should be at the May retreat organized by Ing3nious. I will post topics and other information when available.

I love it when other eDiscovery bloggers step up to point out industry ostriches. Yep, folks burying their heads in the sand rather than just tackle a tough problem. I read, “A New Paradigm in Mobile Device Preservation” by Craig Ball with glee. I am not an attorney and carefully stay away from anything that could be legal advice. It takes an attorney with balls like Ball to publicly opine that NOT instructing your clients to preserve mobile device content is malpractice. As you read his argument, remember that Craig Ball has been special master or testifying expert (mostly plaintiff) in some very complicated eDiscovery matters. As many of my clients will point out, most of their legal holds fall into well known categories without any issues that they think would involve text messages, browser histories or other unique mobile device content. The conversation goes something like this:

Adapting a legal hold platform for a corporate client got me thinking about how Barry Murphy and the eDJ analyst team struggled with the definition of an ‘eDiscovery Platform’ for our eDJ Matrix. Eventually we made a Solomonian judgment and created two platform categories covering key upstream (Corporate) and downstream (Law Firm) functions. Arguably, the consolidation of eDiscovery point products from sequential silos to integrated platforms started when Summation iBlaze added processing and early timeline/matter management features. As much as we wanted those multidirectional arrows on the EDRM diagram to actually reflect an integrated lifecycle and technology, eDiscovery still is a reactive, single use fire drill for far too large a portion of the market. But this is slowly changing. Microsoft and enterprise archives now support real preservation in place with accurate (though limited) retrieval search. Since the 2008 recession, smart serial corporate litigants have fought to take control of their eDiscovery spend and manage their own matters, holds, collections and everything else up to the actual review. The long term eDiscovery nirvana is preservation through production in place from a single interface. We are not there yet. But we know that Microsoft is head there and will deliver basic functionality at a relatively low subscription rate. So why do I think that Legal Hold Notification may be the key to eventually owning the eDiscovery lifecycle?

My thanks to a peer for shooting me this scoop. I dusted off my PACER password and found the attached complaint and final order transferring this fascinating story from Virginia to NY. Forgive my syntax, but the cite is Document Technologies, Inc. et al. v. LDiscovery LLC d/b/a KrolLDiscovery, Civil Action No. 1:17-cv-405-AJT/IDD E. D. Va. Complaints are only one side of any story, but DTI’s side of this story claims that LDiscovery solicited four top Epiq reps to download proprietary data and entice former customers to LDiscovery after their one year non-compete expired. All the M&A activity in the eDiscovery market (check my ITLA webinar) results in lots of personnel turnover and unfortunately gives rise to the temptation to take advantage of that uncertainty to poach top employees and their long term accounts. I am sure that I will do a more in depth dive into this case as it gathers steam, but I wanted to get you some of the fun claims from the DTI complaint:

My thanks for the comments and reposts of yesterday’s blog covering the ongoing lawsuit between two of our industries largest global service providers. Read my blog (or better yet, go get the complaint from PACER) to get the allegations and the potential impact to provider non-compete clauses, security practices and even customers who may get caught up in the fight. A reader asked why they had not seen the case reported in any of their news feeds or media subscriptions. I would have missed this case if a peer had not sent me the cite. All of this begs the question, “Why are the media companies with names that include ‘News’ not covering this multi-million dollar dispute?”