Nick and I spoke with about 30 software & service providers at LegalTech in New York this year; that’s in addition to the 30-some briefings (with some overlaps) last month for March’s upcoming annual e-Discovery report. We have a more comprehensive LegalTech wrap-up of vendor developments and shifts in the market landscape for our clients here , but here are some of the themes that came up at this year’s well-attended show. ALSO: we’re still soliciting end user participation in our e-discovery user survey, which you or your customers can access here, or contact me for more information – all participants will receive a copy of the results.
Defensibility and the Scheindlin Opinion: Judge Scheindlin’s ruling in University of Montreal Pension Plan v. Banc of America was a hot topic, particularly the 85-page opinion “Zubulake Revisited: Six Years Later.” (pdf) It defines culpability for defensibility failures in ediscovery, i.e. what constitutes negligence, gross negligence and willfulness. Some of these include failure to issue a legal hold, incomplete collections, destruction of email or tapes, failure to preserve metadata and failure to determine accuracy and validity of search terms. It’s great to see some concrete guidelines, with obvious implications for e-discovery software and services. I found a concise wrap up here and from law.com here. Software vendors are taking note, and already incorporating the ruling into their marketing.
Price sensitivity: Increased competition in the ediscovery market, lower budgets in legal departments, and more flexible law firm pricing due to pre-review data culling, LPO, AFA’s, etc. all contributed to greater industry price sensitivity this year, with more customer choices and influence in the market. Software and service vendors expanded pricing options and continued to target the outside legal spend from general counsel in their offerings. E-discovery service providers added per-gigabyte contract review to their software and service processes, and offered either “review management” or extensive collaboration with outside counsel. Software vendors offered more project management and monitoring capabilities for tracking time, cost and productivity. Collaboration workflows designed to lower outside counsel fees came up. Vendors increasingly talked about reuse of reviewed documents as another cost savings measure for serial litigants. Some vendor messaging was downright conspiratorial in insinuating that corporate legal could use software to throttle the law firm spend; although many e-discovery vendors have large law firm customer bases, the enterprise accounts remain lucrative and coveted.
New software releases: With deal sizes decreasing at some of the highest price points, there has been increased competition both from upstarts aiming to undercut the bigger names and the bigger names making a play for the mid-market. We heard a lot of “flat is the new up” last year, and many vendors seem to be hustling even harder to win customers by expanding to platforms or trying to tick all the RFI boxes with new features of varying validity. Even more than last year, vendors claim to be end to end and predict that customers want one throat to choke, and they’re attached to it. The customer market is more educated and savvy about its own requirements this year, which lowered the marketing artistry quotient quite a bit, but some of the features we saw added for legal hold, data mapping, retention and disposition policy, review, collaboration, and workflow are better than others. As much as customers may be tired of stringing together point tools with additional budget line items for auxiliary integration or conversion costs and extra fees, most of the products we’ve seen are not the silver bullets they promise – customers should continue to educate themselves about their organizational needs, what other companies are doing, and what the market has to offer. And vendors should consider that unhappy customers are usually the loudest ones.
Early case assessment: All the ECA product releases in the last year seem to have made it a de facto step in the ediscovery process, the only argument remaining is how early it should occur – as early as the initial data gathering at identification and collection, or just before review but after processing? The need for processing itself was a matter for debate – CaseCentral gave its direct Symantec Enterprise Vault connector a big push, but processing vendors advocate just as strongly for the benefits of thorough metadata extraction and preservation.
Information Management Reference Model: We missed the EDRM luncheon, but spoke with Reed Irvin of CA and Sandra Song of H5, the co-chairs of the group tasked with expanding the first box of the EDRM diagram into its own full Information Management Reference Model (IMRM). The working draft is a series of concentric circles outlining the information lifecycle from creation to retention, disposition, discovery and storage, including the architecture and business drivers behind these processes. We’ve written previously on the push for information governance in establishing a litigation preparedness and information management strategy, and are glad to see some structure and industry thought leadership put to these initiatives.
M&A: Lots of M&A buzz this year, unfortunately a lot of it speculation about vendors suspected to be looking for a necessarily swift exit.
A great show this year overall, and many thanks to everyone who took the time to speak with us. We will be wrapping up the e-discovery report in the next month. Watch this space.