Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2012-04-25 07:35:28Format, images and links may no longer function correctly. 

Jason Velasco moderated our lively panel discussing “The Changing Role of the Service Provider”. By the show of hands, our audience was roughly 50% provider, 30% firm and 20% corporate. One interesting statistic from Jim King’s (IPRO CEO) keynote was a 17% decline in the number of IPRO service providers while the actual revenue they generated was up 12%. That’s right, the IPRO channel is shrinking (just like the eDiscovery market) but the volume is still growing. This resonated with the panelist perspectives on the increasing need to find alternatives to volume pricing ($/GB). Providers need to differentiate their offerings with standardized processes, project expertise, transparent invoicing and metric-rich reporting to survive the transformation from commodity vendor to managed service provider.

The last year or so has seen an increasing rate of eDiscovery acquisitions large and small (Clearwell, Autonomy, Riverglass, Dataworks, Esquire, Bridge City Legal, ACT Litigation Services, Ignited Discovery, Unlimited Discovery Group, Capitol Discovery Services, Trilantic – the list goes on). In analyst sessions with service providers, we are hearing about the increasing pressure from the ultimate corporate buyers toward more predictable consumption models such as fixed fee, case based or annual subscriptions. Similar sessions with the software providers indicate that corporations continue to want to bring legal technology in house. However, corporate legal departments seem to be staying lean and mean, focusing on controlling collection size and early preview of key custodians. Recent eDJ corporate ROI engagements have consistently shown that only global serial litigants realize a real return on investment by building in house eDiscovery to meet the demands of their largest matters. Counsel needs immediate access to key potential evidence on a CD or PST, but eDiscovery should be managed, not owned.

This is an opportunity for the service and software providers to create the technology and offerings that enable a real managed solution where the entire eDiscovery team can access and collaborate on the matter. Whether this mythical ‘eDiscovery Hub’ will reside with the corporation, firm, hosting provider, in the Cloud or across all of these is yet to be seen. The first wave of eDiscovery platform offerings are in the market and gaining an edge over point products.

Notes from the conference:

  • · Tom O’Connor’s session on Technology Assisted Review was a good recap of recent hot cases and how we got here.

    • o TAR is the plan and the process, not the specific technology
    • o TAR is the first place that technology and the law really merge
    • o Key is the ability to understand TAR and explain the complex process as if speaking to a six year old
    • o Providers being asked to define when enough is enough
    • o Clients want an easy answer (button) when it rarely exists

  • · Rich Ruyle’s explanation of strategy for two versions of Eclipse(SQL or IPRO flat file database)

    • o Need for a desktop/server version that does not require a DBA or infrastructure investment

  • · Latest releases of Allegro, eCapture and Eclipse

    • o Steady progress on integration of the three products
    • o Mature granular functionality – IPRO understands the users in the field
    • o Vision of end-to-end platform, but still separate products today

In wrapping up my thoughts, it is clear to me that the classic litigation support ‘vendor’ has to up their game and the expertise of their project managers to survive. The ‘glory days’ of $1,000+/GB bulk processing are gone. Customers need to understand and quantify the true value of services beyond machine time and software fees. The traditional legal technology market resisted change and was slow to adopt new offerings. Now that corporations are driving the purchasing, the market is accelerating and headed upstream. It will be interesting to see what impact the consolidating market has on Legal Tech next year. Now that you know my thoughts on the matter, do you think that the traditional vendor is going the way of the dinosaur? We want to hear your comments.

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