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Legal Tech: Six Years of Tracking E-Discovery Trends and Providers
As an independent analyst that covers the legal industry, I have the privilege of learning from an array of market leaders and sharing their perspectives with the community to help promote progress. With that objective in mind, for the past six years, I have been producing the E-Discovery Unfiltered report to identify pricing patterns and preferences in electronic discovery, highlight projected investments in the sector, gauge the impact of the cloud, track shifting preferences in outsourcing and remote review, understand vendor selection criteria, and focus on the need for international ediscovery, among other trends. Ultimately, my goal is to spotlight the challenges associated with navigating an expanding data landscape and offer crowdsourced insights on charting the most productive path forward.
Between Jan. 22 – March 6, 2020, I personally interviewed 27 individuals responsible for e-discovery decision-making, including eight in-house lawyers, 11 in-house administrative e-discovery leaders, and eight law firm partners: 100% of whom develop and implement ediscovery processes, and select e-discovery tools and vendors; while 96% influence their organization's ediscovery budget. Of the 19 respondents from corporations, seven are in life sciences, three are in insurance, three are in telecommunications, two are in financial services, two are in manufacturing, and two are in technology. 89% work for companies with revenues that exceed $10 billion and have over 10,000 employees. All eight of the law firm partners work for large law firms and serve as primary e-discovery counsel.
E-Discovery Is Expanding
The most frequently cited trends for 2020 related to the broad application of analytics, the impact of artificial intelligence, and the challenges associated with interpreting an array of complex data types. "Companies are starting to apply analytics across matters, rather than on specific cases," said one in-house lawyer. "[We are seeing an] increased use of artificial intelligence in discovery and contract review," added an in-house discovery professional. And, according to a law firm partner: "Managing social, mobile, and cloud data represents the most important area of change," particularly given the need to search and interpret emojis, ephemeral messages, and non-custodial persistent chats.
Corporate Legal and Law Firm Teams Are Investing In E-Discovery
The leading areas of investment noted for 2020 were software, training, data mapping and automation. "Cloud-based review software is our biggest investment in 2020," said a participating in-house lawyer. "We are investing in education for our team members and in data mapping," added an in-house ediscovery professional.
More Law Departments Are Managing E-Discovery In-House
Those investments in education are giving in-house teams the ability to handle more e-discovery activities themselves. In fact, 95% of corporate respondents agreed that legal departments are bringing more of the ediscovery process in house. 91% of corporate participants also highlighted that the law department's internal team alone typically selects both software vendors and outside service providers.
The Pandemic is Impacting Preferences
When enlisting outside support, prior to the pandemic, 58% of corporate respondents and 50% of law firm partners expressed a willingness to work with companies that offer remote document review. The current crisis has generally prompted many to reconsider their concerns with this approach, assuming an appropriate level of security: 37% of corporate respondents and 38% of law firm partners said that they are open to off-shoring their ediscovery, while 16% of corporate respondents expressed a willingness to work with a provider that outsources elements of its ediscovery.
Regardless of who is doing the work, 89% of corporate respondents and 75% of law firm partners prefer to access their software solutions in the cloud, rather than on-premises. As e-discovery becomes more complex and global, this is particularly important since 68% of corporate respondents and 63% of law firm partners need international discovery, while 53% of corporate respondents noted that the General Data Protection Regulation (GDPR) has impacted their approach to data retention and discovery.
Clients Want to Work with Talented, Transparent Providers
In addition to offering data on trends, the research also highlights what clients want from their outside providers of both software and services, such as transparency, honesty and integrity. "I want to hear bad news and take part in the discussion about how to fix it," said one in-house lawyer. "The mindset of the long- term partnership rather than getting in the door and getting the project is critical," added another.
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