eDJ Migrated

The Cowen Group recently put out some very interesting research showing that 87 of the AmLaw 200 law firms have eDiscovery practice groups. The next step in Cowen’s research is to look more granularly at what those groups are doing, investments those groups are making in technology and people, and the level of authority and traction the groups get within the firms. I think this statistic points to the beginning of some maturation in the eDiscovery practice realm. While one might say that the real sign of maturation will be that close to half of Fortune 1000 companies have eDiscovery practice groups, it is really the law firms where this trend should begin.

The Sedona Conference released its Commentary on Proportionality in Electronic Discovery, available for download here. Proportionality is an interesting topic; determining what is good faith and reasonable is challenging. The Sedona Conference Working Group provides some very good analysis in this document. I’d like to add some perspective on what this means for organizations working on eDiscovery programs.

IBM announced the acquisition of PSS Systems, setting into motion what might be a round of consolidation in the eDiscovery market. I get asked all the time why the software giants haven’t bought eDiscovery vendors and the answer is typically that they are waiting until there are some internal winners in the market. In the market for preservation management, the main vendors have been PSS and Exterro. IBM must have decided that it was important enough to get some of the big clients that PSS brings to the table.

The AIIM State of the ECM Industry 2010 report is out and I read it to see what kinds of insights it might offer about the eDiscovery market. ECM – or enterprise content management – gives organizations the ability to more efficiently manage unstructured content. ECM first came on the scene to solve mundane problems like version control, to put workflow around content-driven processes, and to better facilitate knowledge management (giving knowledge workers the tools to be more efficient). When the FRCP amendments took effect in 2006, the expectation was that ECM could ultimately solve the problem. At eDJ, we still believe that ECM will play a huge role in identification, collection, and preservation initiatives, it will not be the end-all, be-all for eDiscovery. That said, eDiscovery is a huge driver for ECM.

As always, there were some interesting tidbits in the Fulbright & Jaworski Annual Litigation Trends Survey (this one was the 7th annual report). The report covers a lot of ground including trends for fee arrangement, the tactics for handling international disputes, the types of matters organizations face the most (and the different ways each type of matter impacts litigation costs), and eDiscovery. At eDJ, we looked for the nuggets of data about eDiscovery that are most interesting and compelling – there were severa

Corporations continue to acquire eDiscovery technology as they slowly convert from reactive fire drills to proactive business processes. The majority of early eDiscovery processing and hosting platforms available to service providers carried a relatively high per GB license cost. This model drove many service providers to develop their own software to remain competitive when prices suddenly dropped from $2,000 per GB down to the current $400-600 per GB. Now many of these providers have packaged their toolboxes into commercial software and are trying to convert service customers to software sales. All of this gives buyers an overabundance of choices when creating an RFP. It certainly keeps me busy with briefings and demos of new products every week. An offhand remark from a savvy CTO sent me digging into the potential pitfalls of some current open source General Public Licenses that work on a Copyleft or pay it forward model.

We all know that Office 2007 and later files are a different file format from your traditional DOC/XLS/PPT files, but I thought that it was worth exploring them with an eye on their potential impact in eDiscovery activities. First we need a simple explanation of what changed from Office 2003 to Office 2007 formats. Prior to 2007, Word, Excel and Powerpoint files were each proprietary binary file formats that required the application or a viewer to open. Office 2007 adopted an XML-based file format called Office Open XML that uses a common set of XML files within a compressed Zip container. These Extensible Markup Language (XML) files are simple text files that resemble HTML. The files now have an X or M added to their traditional file extensions to indicate whether they are flat XML or if they have embedded macro content. So DOC, XLS and PPT have become DOCX/DOCM, XLSX/XLSM and PPTX/PPTM. There are many advantages to the open formats, but we will focus on the potential discovery impact.

While reviewing the hundreds of new blogs and stories found by the eDJ search engine over the weekend, I realized that we had reached 5,000 stories in just 9 months. That translates to almost 600 unique news or opinion pieces per month after we screen out the thousands of reposts and odd environmental stories that happen to mention “Chain of Custody”. Looking back, it appears that the number of blogs and stories have been steadily growing since my May post on the new user customized RSS feeds and home page display. We were clearing about 20 stories per day back then and I know that we have gotten a lot tougher in the screening process. The eDiscovery market and the legal system that it supports has definitely been warming the recession chill of 2009.

On December 1, 2010 new amendments to Rule 26 of the Federal Rules of Civil Procedure governing expert witnesses go into effect. Ever since 1993, testifying experts in Federal cases have had to carefully manage all drafts and written communications with counsel in the expectation of having to produce everything to the opposing counsel. This directly contradicts that usual assumption of attorney work product privilege protections and has led to inadvertent waiver and dramatically higher fees. It is just more efficient to send early comments on depositions, questions for fact witnesses and such via email than it is to have to leave a message and then schedule a conference call. Moreover, I would generally not bill for a quick email question while I have to recoup the time for these calls. Most technology savvy experts have had to adapt work practices to minimize the creation of discoverable documents. They will overwrite the same report instead of creating draft versions, read paragraphs over the phone instead of sending early opinions, use Webex to preview demonstratives and generally leverage collaborative technologies that do not actually generate email.

My September post looked at the provider sponsorship of Legal Tech New York from 2008-2011 as an indicator of the how our industry has reacted to the economic recession. At the time, I noticed quite a few players who had either quietly disappeared or been acquired in the last couple years. Merger and acquisition consolidation is a sign that eDiscovery is maturing and integrating into the larger corporate technology market. I thought that it would be interesting to make a quick roll call of software or service providers that have either disappeared or been acquired since the recession put the squeeze on the market.