Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2014-01-02 19:00:00Format, images and links may no longer function correctly. 

The new year has brought some pretty big changes to the eDJ Group based on what we were seeing in the eDiscovery market. The holidays and my annual diving trip gave me the time and distance to reflect on how these changes may impact you in the coming year. This blog will not be my classic ‘trends & predictions’ for 2014, but a more myopic perspective on the rapidly evolving business of legal technology and services. The decision to transform our ‘independent analyst’ business to more traditional research-on-demand consulting was not made easily or quickly. Providers and consumers alike told us that that they were cutting back on analyst and membership budgets. At the same time, blogs like my recent one on the MS eDiscovery Center were generating inquiries and consulting opportunities from corporations and their service providers struggling with strategic decisions. So what did we see in the market that forced eDJ to focus all of our attention on strategic consulting?

In many ways, the 2013 eDiscovery market just reflected the larger technology trend merging traditional software vs. services into Software-as-a-Service (SaaS). Microsoft’s Q3 commitment, “to the effective transformation of Microsoft to a successful devices and services company,” told me that the momentum had clearly shifted to service subscriptions over enterprise licensing. Our most common 2013 analyst inquiries from providers focused on how to make the transition from ad hoc volume pricing to dedicated subscription contracts. Traditional eDiscovery service providers faced increasing pressure as their relationships shifted from Biglaw firms to corporations who sought a business process solution rather than fire-drill pricing. I believe that the service providers have more than two simplistic models, but there is no denying the ongoing consolidation as smaller, local shops essentially sell their clients to more competitive national/global providers.

The court acceptance of analytics and machine learning has actually given life to nimble startups hoping to capitalize on consumers hungry for an Easy Button to solve the escalating cost/time of review. While these magistrate musing have definitely contributed to the eDiscovery marketing ‘sound and fury’ from technology providers, the real Predictive Coding (PC) winners have been the consultants and experts required to create defensible workflows. I believe that the market is looking at the wrong end of the discovery lifecycle for the greatest potential benefits from these innovations. I am just starting to hear from providers trying to apply machine learning and iterative analytics to information governance challenges such as retention, expiry, knowledge optimization and more. Service providers will need to transition their expertise from mono-conceptual matters to grander corporate taxonomies and ongoing managed service relationships if they want to follow PC upstream.

2013 also brought a major shift in attitude towards Cloud solutions and mobile users. The risks and uncertainties of these systems outweighed the potential benefits in prior years’ consulting engagements for AmLaw 200 or Fortune 500 clients.  The question this year has been when rather than if they will migrate to the Cloud or recognize the BYOD infection that started in the boardroom. Smart providers have been integrating their technologies and services to connect directly to Office 365, Google Vault, Salesforce, mobile apps, Amazon storage and other ‘next gen’ ESI sources.  We have seen a big jump in consulting inquiries around migrating content under hold, smart migrations that expire the legacy data landfill and automated categorization strategies in the new environments. Our IG survey made it clear that consumers have finally recognized that infinite retention is not the solution to exponential data growth.

These trends bring challenges and opportunities to our relatively small market for 2014. eDiscovery is not going away anytime soon, but the bad old days of unlimited case budgets awarded by a firm paralegal are over. The new ethics requirements are forcing education on corporate and firm counsel where it impacts their discovery. Despite what some providers told eDJ, an educated consumer is better for the market in the long run. The eDJ Group will continue educating our clients and readers in 2014. Just like the rest of the market, we have to be nimble and adapt to meet client needs.  That means growing the part of our business that is in demand and letting go of our more academic ‘independent analyst’ research. To keep up with this changing market, we are converting our premium subscription model to a survey participation model for non-providers. I look forward to LTNY next month and hearing your opinions on trends and solutions. If you would like to schedule a discussion, please shoot me a note for open times.

Cheers and best holiday wishes!

Greg Buckles can be reached at Greg@eDJGroupInc.com for offline comments, questions or to schedule a call. His active research topics include mobile device discovery, the discovery impact of the cloud, Microsoft’s 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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