Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2016-07-26 20:00:00Format, images and links may no longer function correctly.
Back when I was doing market analyst days for eDiscovery providers, I was frequently asked about the impact of taking a pure play eDiscovery company public. My opinion was and still is that it is a bad move. No matter how important to practitioners, I have never believed that eDiscovery is a long term market segment that stands alongside technology, Information Governance, legal services, etc. It does play vital roles in all of these mega-markets, but has a limited lifespan except for boutique service/tech providers. Sorry folks, but most of our preservation, collection and processing products/services are becoming default platform functionality offered by Office 365 and other systems. This process will take another 20 years to play out, but companies that go public quickly lose the ability to adapt to our changing market and redefine themselves to stay relevant to their customers. There are many global public corporations who have acquired or created eDiscovery offerings, but only a few pure play eDiscovery companies have gone public. My fast list of those left standing:
- Guidance Software (the first)
- UBIC
- Xerox Litigation Services
- Navigant Consulting
- Author’s Note: Epiq kindly pointed out that it was founded as a Bankruptcy & Settlement Administration services company, which still comprise 30% of revenue. Draw your own conclusions, but my take on Epiq as an eDiscovery services provider has not changed. See exact Epqi feedback below.
I am sure that there are more hidden out there, but it does not change my opinion that eDiscovery providers need to be nimble and flexible, which is hard with giant investment firms and pension funds backseat driving your board.
So what does this mean for Epiq customers and the market? Do not expect quick changes or sudden discounts for ongoing matters. Ice bergs move slowly, even when crashing together. I am watching for AFE/subscription style offerings to firms and corporations from the big players. Not just test balloons responding to customer RFP requirements, but actively marketing eDiscovery as a predictable manage service. That will signal the death of $/GB ad hoc pricing and a conversion to a more sustainable market.
Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a ‘Good Karma’ call. His active research topics include analytics, SMB eDiscovery, mobile device discovery, the discovery impact of the cloud, Microsoft’s Office 365/2013 eDiscovery Center and multi-matter discovery. Recent consulting engagements include managing preservation during enterprise migrations, legacy tape eliminations, retention enablement and many more.
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Epiq response and feedback below. There is good background information that I wanted to share with you:
“We were just reading your blog on today’s announcement, and would appreciate a correction of the headline. Epiq is being acquired by OMERS and Harvest Partners, not by DTI. The plan is that following the transaction close, Epiq and DTI will be combined—but DTI is not one of the buyers.
Also, just as a clarification, Epiq is not a pure-play eDiscovery company. That said, we are unique in the public market as the only pure-play legal services company. When Epiq went public in 1997, it offered only bankruptcy and trustee services and solutions. Later, we added class action settlement administration. Then in the mid-2000s we entered eDiscovery but did not see a large amount of growth until the period between 2010-2013. While eDiscovery (reported as our Technology segment) grew to become the largest part of our business, our Bankruptcy & Settlement Administration segment still represents 30% of annual revenues.”