Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2010-09-28 16:23:53 Officially, the U.S. recession started in December 2007 and ‘ended’ last June. Unofficially, we all know of talented people who are still looking for work. Anecdotally, the eDiscovery market seemed to bottom out in the third quarter of last year. I know that I saw a lot more resumes floating around LegalTech 2010 than in previous years. That led me to wonder who had closed shop or been acquired in the last couple years. I figured that one of the better ways to chase this list down would be to compare the LTNY Exhibitor lists from year to year. This exercise turned up some interesting numbers and facts.I started with the simple metrics of the number of exhibitors per year from 2008 – 2011. The slow recovery may result in a number a last second exhibitors this year as marketing execs look at their budgets. A quick look at the 84 exhibitors from 2010 who are not yet on the 2011 list revealed several healthy, expanding providers. What was interesting to me was the flat number of exhibitors in 2008-2009 and the spike in the 2010 show, right when everyone seemed to be feeling the pinch. The predictions of meteoric revenue growth in the eDiscovery market seemed to attract a lot of peripheral players wanting to capitalize on the hot new market. Given the drop in the current 2011 exhibitor list, I would hazard that many of these services (translators, telecom, web, IT, etc) decided that eDiscovery is more than just a label.
There are 59 exhibitors from 2008 who did not exhibit in the 2010 boom. That means that over 36% of the ‘players’ in 2008 either elected not to exhibit, closed or reorganized in some manner. That is a lot of turnover. We only lost 40 exhibitors from 2009 to the 2010 show, a 25% change. There are a rough total of 312 distinct exhibitors over all four years (not trying to reconcile name changes). Only 83 exhibitors are represented in all 4 years, so roughly 50% of the overall market. That number jumps to 95 if you take out 2011 as being too early for a final count. That still says a lot for the volatility of our emerging market space.Another interesting trend is the number of show sponsors per year. I feel that this might be a more consistent measurement of how flush eDiscovery companies feel. Everyone knows that LTNY is THE show and it is a given that an exhibitor booth will generate prospects and raise brand awareness. At the 2008 show, 46 companies went the extra step to get their logos on banners, panel sessions and more. So far, we only have 20 sponsors for the 2011 show. I do not believe that this is any reflection on the conference itself, but rather a sign of the recent recession and consolidation within the eDiscovery market. I have seen evidence that some providers have moved their demo suites to adjacent hotels to cut costs, but almost all of them maintained an exhibit booth last year.
ARMA, ILTA and other regional conferences have definitely gained ground on the original legal technology showcase. It still remains the premier yearly U.S. eDiscovery event. Most eDiscovery software companies will time major version releases, partnership announcements and big press releases for maximum conference impact. LTNY prep is kind of like Christmas music in that it seems to start earlier every year. These metrics and a study of the actual lists lead me to the conclusion that the recent recession accelerated consolidation in our slowly maturing market. It seems to have truncated the marketing budgets of the peripheral players who tested the waters and sent many of them back to their core business strategies. At odds with these trends are the number of new products that have been incubating with hosting and service providers. The shrinking margins on ESI collections and processing are forcing them to convert their internal software to actual products. So look for many providers to try to rebrand themselves and their offerings in February.