Entries Tagged 'eDiscovery' ↓

George Socha released the 78-page EDRM search guide draft v. 1.14 on February 6^th for public review and comment. The guide is meant as educational commentary for legal professionals and litigation software and service providers, including guidelines in developing “appropriate and effective search methods.” The guide is the work of 18 people from 15 organizations – some of the boldfaced company names I picked out from the document changes being Autonomy-Zantaz, Clearwell Systems and Vivisimo, as well as a number of law firms and others.

The guide offers a step-by-step scenario of litigation response involving two fictitious companies and their alliterative employees (e.g. Alex Arnold of Alpha Corporation and Bonnie Benson of Beta Corporation) embroiled in an intellectual property dispute.  This example is used to illustrate the workflow that goes along with the EDRM. It was instructive and sometimes entertaining, for those of us who read mystery novels and are interested in the chase, anyway.

It also includes an in-depth primer on search methodologies and syntax, which tickled my librarian bone. This section would be at home in a library school curriculum, right down to the search query treatment of diacritics. Of course the flip side of this is that average users might find it too technical.  Overall it’s a good read for anyone interested in search and information retrieval. Later sections deal with search documentation and validation of results.

I found the guide to be comprehensive in addressing the litigation response process and strategies for defensibility. It is straightforward in listing the actions that professionals in each role (general counsel, outside counsel, custodians, IT personnel, witnesses) must take, and overall it achieves a good balance of outlining the legal process and the resulting steps taken with each fictitious party’s ESI.  I think it elegantly addresses one of the big criticisms of e-discovery products, references and approaches – namely that they are not always a happy marriage of IT and legal expertise, or do not encourage collaboration and mutual understanding between these two groups.

Rob Robinson of Orange LT has logged some early commentary on the guide here. Like Rob, I was a little surprised that there was not a section for judicial rulings regarding search. On the other hand it’s nice to read practical advice that is not mired in legal-speak. There are certainly plenty of other sources that provide history and explanation, and with the rapid succession of decisions being handed down lately it might be difficult to keep it current for the sake of the guide.

By way of follow-up, I wanted to answer the questions that I didn’t get to here, so that everyone can share. I haven’t answered absolutely every one here – I don’t have a figure for market growth rate, for example.

Q: Do law firms, enterprises, etc prefer choosing a service that is on-premise vs. SaaS? Why?

I answered this on the call, but it obviously varies depending on the size of the company involved, the amount of times they’ve done eDiscovery, whether they’re a law firm or not. Bear in mind that the early days of eDiscovery were dominated and to some extent still are – by services companies like Fios and Kroll Ontrack that provide outsources data processing. So the common FUD tactic used by on-premise vendors to knock SaaS, i.e. that customers won’t like their data leaving their premises and ending up on someone else’s server, doesn’t- or at least shouldn’t – really apply here. Sensitive data has been removed from organizations for eDiscovery purposes for more than a decade like that already.

The larger companies will, on the whole, still prefer eDiscovery to be handled in house in terms of the software they use, though you should remember they almost always engage outside counsel, and the two of them need to be working with compatible systems, so large organizations are starting to have purchasing influence over the technology used by law firms.

One key thing for vendors to remember is that if they’re selling their eDiscovery as something to be used in a reactive eDiscovery process which almost all of them are to one extent or another – it’s hard to sell a reactive product to the enterprise if it isn’t quick to deploy — and that’s where SaaS and appliance have an advantage.

Q: You mentioned IT organization not be capable of pulling together different apps…do you see this a benefiting ECM vendors re: single repository play or is a federation across the data stores more likely?

If ECM vendors can solve a problem of both the legal and IT department simultaneously then it obviously should be good for them. How they do that could be either way. Some of the larger vendors will go all out tp optimize their own repositories so that the full benefits of their particular eDiscovery offering can only be had by putting all the content in their repositories. But others are proving successful with ‘manage in place’ federation architectures too. It’s not a case of one or the other winning overall, we don’t think.

Q: The sector seems quite fragmented do you envision a lot of consolidation? Which vendors do you think could possibly be acquired and how should a buyer consider picking the right vendor?

A: We envisage some consolidation certainly, though a lot has already happened. I’m not going to name names on the blog, beyond what I said on the call, that among acquirers we would expect HP and Symantec to feature, though there are others mentioned in the report. There are also segments and companies mentioned as potential targets in the report too.

As for how a purchaser should pick a vendor – I’m assuming the questioner means in the light of potential consolidation – then you need to do some homework on the stage the company is at, the amount of investment its taken on and has left, profitability or otherwise, the history of the management and so on. At the end of the day, if it gets bought, it then depends which company it gets bought by; if it’s one that just grabs the customers, I’m sure competitors will be offering favorable deals to switch before the ink is dry on the deal.

Q: One of the companies I noticed was not mentioned in the presentation was H5? Is this a company that you follow? How is the business model of this firm different?

Yes, H5 is in the report. It does have a slightly different model from other software or service providers we’ve looked at in that it offers a combination of consulting services and automated review as an alternative to outside attorney review. Plus, it offers up-front scope model, rather than billable hours.

Q: How does eDiscovery tie into other Security tech like Log Managements, or storage of Emails, IM etc? Should eDiscovery be the central control point for Enterprise security?

This is a very interesting question. And one that I’ll deal with in a separate post soon. Watch this space.

Q: How important do you feel legal holds solutions are?

They’re an important part of the preservation stage of the EDRM, but technically not that hard ti implement. Autonomy and Recommind are two vendors that have recently introduced such a function into their eDiscovery offerings.

Q: How do you think demand for eDiscovery solutions will be impacted in tight IT spending environment?

There will be tension between eDiscovery as capital expenditure versus operational expenditure, as there always is, but obviously large scale cap ex spending is something all organizations are trying to avoid right now. It’s hard to see however how in highly litigious industries eDiscovery can be anything other than non-discretionary spending. There will be pricing pressure on some vendors and companies will do whatever they possible can to reduce data volumes if they’re still being charged by the gigabyte. That model will also be called into question by the largest customers.

Q: Could you comment on the kind of data that is fair game in a discovery process? for example, what about IMs or even data that is stored in the cloud like salesforce.com transactions?

A: Anything stored electronically is fair game in an eDiscovery process. With something like data in a Salesforce.com database that’s obviously a lot easier to extract than if some instant messaging systems, And if your organization relies on one of the free pubic IM tools, like AIM, then you could have great difficulty  retrieving it, unless the logs are stored locally on desktops, as it can be quite easily, with iChat on Macs, for example.

Q: Where can I get access to this presentation and report?

The report information is here and the presentation will be emailed to you – drop us a note at this address. The webinar will be available for download very soon too. I’ll put a link up here as soon as I have it.

Q: Why can’t I hear anything?

A: We got this question a few times. So I’d like to apologize and say thanks to all of your that persevered with our audio problems – we couldn’t get he webinar tool’s audio channel to work, despite it having worked perfectly in two prior run-throughs. I have much more sympathy than before now for vendors doing live demos – I feel your pain

I heard from veterans that this year’s LegalTech New York was smaller than last, but I can’t say that knowledge made it any less intimidating for a first-timer. Several in the booths told me that despite the lower numbers, the quality of customer was going up – there were fewer tire-kickers and swag-grabbers and more substantial customer prospects. An encouraging sign in a down economy.

Not surprisingly, in the booths and in the conference halls one of the biggest themes was cost. This jibes with a key finding from our December report on e-discovery and e-disclosure, basically that they’re out of control. Another of our projections, the moving of e-discovery in-house in corporations, was a concurrent theme as one of the best means of reducing those spends.  Vendors seem to be moving further leftward in the Electronic Discovery Reference Model (EDRM) towards the earliest stages of data creation in order to capture more of the revenue from this, also as we reported.

The YouTube town hall meeting gave good insight into what issues are important to the legal community in dealing with the challenges of e-discovery.  Some of the hot-button issues:

• Federal Rule of Evidence 502
• the Sedona Conference Cooperation Proclamation.  
• Search methods in review, their transparency and defensibility.
• International e-discovery considerations such as cultural differences, data privacy and the importance of Unicode in multilingual review.
• Monica Bay, editor-in-chief of Law Technology News (LTN) made points in a youtube question about jargon involved in vendor claims (some that resonated with my own experience) – namely that the same ten terms of jargon are used by all vendors to describe their considerably different products, and these are often not well understood by potential buyers. In my experience, terms such as concept search can be confusing and early case assessment can vary greatly in definition and execution from vendor to vendor, but now seem to be offered by many of them with minimal explanation.

To build on that point, it’s a common complaint in any market that vendors are “selling what they have,” versus what the customer needs, but in such a critical area as e-discovery this can be downright dangerous. The consumer needs to be armed with information and expertise in order to make an informed choice – probably one of the reasons that service providers and consultants remain some of the most trusted entities in the field.

The hottest topic NOT discussed in the panels and sessions (at least the ones I attended) was the Autonomy-Interwoven acquisition and what it will mean for the market, about which 451 subscribers can learn more here and here.

Overall the show brought together some of the best minds in the industry for a slightly dizzying wealth of legal and market information. Let me not forget a big “thank you” to the several vendors who met with me to discuss their products and views on the market landscape over the three days. Here’s looking forward to next year.

For additional perspective, see the excellent coverage from Rob Robinson of Orange LT, Whit Andrews at Gartner, and Sean Doherty at Law.com

It might be overshadowed by the ramp-up to LegalTech, but a big project of the Sedona working group on e-discovery will be kicking off later in February, the 2009 Text Retrieval Conference (TREC) Legal Track.  For going on 18 years, TREC has been a workshop for encouraging research in information retrieval.  The three-year-old legal track is organized through the National Institute of Standards and Technology and co-coordinated by Jason Baron, director of litigation at the National Archives.

Participating teams work with a test case to evaluate the most effective search protocols for finding relevant documents in e-discovery, i.e. what finds the responsive documents best?  Concept search, expert human reviewers, Boolean keyword search using “x and y or z” or other methods?  I spoke with Jason Baron briefly about this year’s TREC, which will switch test collections from the tobacco litigation “Master Settlement Agreement” repository to the Enron collection of email and attachments.  He believes it will increase participation by reducing the need to search OCR’d documents.

Most of the participants in past years have not been vendors, but a few we know of are H5 and Clearwell Systems.  It’s certainly a worthy goal to find the most effective methods and work towards improving standards in how we approach sifting through legal documents for relevancy.  You’d think more vendors would be willing to put their tools to the test for the greater good, “walking the walk” if you will.  Instead their absence is a reminder that e-discovery is still a wild west scenario with no “standards sheriff” in town.

How likely is it that vendors will put their products to the test in an attempt to back up claims and find better methods in review and analysis of Electronically Stored Information for trial?  We hope that more of them will answer the call.  It’s a good time to prove your chops if you’re in e-discovery – anyone going to LegalTech next week will be able to attest to the dizzying number of vendors making the market ripe for consolidation, which we have already partly seen through the high volume of acquisitions in the last few years.  It remains to be seen how many of the smaller fish will still be left swimming at year end given the economic climate and fierce competition.  Proving their mettle and working toward the common good wouldn’t hurt any.

I will be at LegalTech from February 2-4 talking to vendors about their products and their own methods for finding responsive documents.  If you would like to get in touch or schedule a meeting, I can be reached here.

There seem to be two schools of thoughts at the moment on how ECM vendors will fare the tightening of IT budgets.

On the one hand, few doubt there is increased legislation and regulation headed our way on a global basis, particularly in financial services and government, and this could be a boon for ECM vendors that sell document and records management systems for compliance purposes — IBM, Open Text, EMC, HP to name a few.  Litigation related to events of the past four or five months is also likely, making the need for eDiscovery tools that can help organizations more cost effectively deal with discovery requests for electronic information more dire.  The vendors listed above, along with a host of others, certainly see growth opportunities in eDiscovery (this was a big part of Autonomy’s rationale in picking up Interwoven last week).

But on the other hand, IT spending is taking some big cuts and ECM vendors aren’t going to be immune to this.  In October, we noted data from our survey partner ChangeWave that forecast declines in ECM spending in Q4 and we’re watching some of those results come in now.

EMC’s Q4 revenue for its content management and archiving (CMA) division declined 12% year-over-year, with license revenue down 30% in the quarter.  For 2008 as a whole, EMC’s CMA division did grow 2%.  Interwoven’s Q4 revenue held up ok, with 11% revenue growth and 6% license growth; about half of this is typically Web content management revenue though, a different market from the traditional ECM and compliance-related stuff discussed above.  (There’s no way to break out IBM and Oracle’s ECM-related revenue, unfortunately).

Open Text announced its fiscal ’09 Q2 earnings yesterday, with revenue up 14% year over year to $207.7m and license revenue up 18%.  Open Text has been beating the compliance drum for awhile now (it was perhaps pushed here earlier as its initial strength was more in the realm of collaborative document management, SharePoint’s target market), and may be benefiting from that most now.  (With ongoing success in this range and high interest in compliance-related markets, we continue to ask if/when Open Text will be open to a deal itself).

Compliance/records management/eDiscovery hasn’t necessarily been the number one sales driver for most ECM vendors (except for Open Text which has tied 70% of license to “compliance” in recent quarters).  Growth in these areas will have to make up for potential shortfalls in other tried-and-trued areas of ECM — the transactional content apps for things like loan originations, account enrollment, claims processing, drug approvals and myriad other types of business-specific apps for which organizations use ECM.

These vendors are also still figuring out how to deal with SharePoint in the market.  While most have a more realistic view of what SharePoint is and isn’t in the market at this point (it is increasingly a standard layer for basic content services but it’s not full ECM for compliance or transactional apps, at least not yet) and have developed some nuanced strategies for co-opetition with Microsoft, there’s still little doubt Microsoft has taken some ECM business that previously went to bigger, more sophisticated document management products simply because there weren’t other alternatives.  A new version of SharePoint expected as part of Office 14 late this year / early next could also see a lot of customers pushing off decisions in this difficult 2009 to “wait and see” what SharePoint.next has to offer.

If you missed it, there was an article from CNNMoney earlier this week on Open Text and spending in this sector.

I have been somewhat remiss in promoting this, but I’m presenting a webinar tomorrow, Wednesday about our recently published report on eDiscovery and eDisclosure.

We’ll be going over some of the key findings of the report including our mapping of vendors to stages in the EDRM process.

Registration is here.

Date: January 28, 2009

Time: 9am PT / 12pm ET / 5pm UK

More information on the report itself is here and you can buy it as a one-off report here.

Release is here. Autonomy is paying $775m cash, including a new loan.

Main drivers as we see it right now having just listened to the call:

• eDiscovery and increasingly regulated environment.
• Access to Interwoven’s rich customer base in the legal sector.
• Adding automation to the content management process – think auto-tagging rather than manual tagging.
• FRCP changes in 2006 forced companies to consider all their data and you can’ manage all your data manually.
• Autonomy has changed its mind about content management for the reasons above.
• Reward for Interwoven’s turnaround and refocusing efforts including in eDiscovery via the Discovery Mining acquisition.
• Leaves other standalone content management players in an even worse position (e.g. Vignette).
• Autonomy acquisition engine gets some more fuel; it’s looking more & more like a mini-Oracle every day, in all senses of that phrase.

More considered and deep analysis coming to 451 customers later today.

We’ve knuckled down on our upcoming e-discovery report – thanks for the many responses to the blog post. Even though e-discovery has been around for years, the current market activity proves the party’s just beginning – and it’s going to be a barn-burner.

As we saw a few weeks ago with Interwoven’s acquisition of Discovery Mining (log-in required), SaaS is emerging as a viable option, and may be a playing-field leveler for smaller vendors. Also last week, PwC and Iron Mountain / Stratify announced a strategic e-discovery partnership. Then yesterday IBM released its new E-discovery Manager for its content management and email archiving platforms – 451 clients can expect upcoming coverage.

There are a number of established tier-one players. But where there are large players, there is room for smaller alternatives. And because some large vendors, consultants and services firms are playing catch-up in the boom, there is still plenty of potential for acquisition, particularly because the e-discovery process covers several disparate areas of technology: email archiving, storage, records management, search and text analysis. In this race, the market is just hitting its stride, there are probably too many vendors vying for the business and the players shift frequently.

The latest Socha-Gelbmann survey results bear this out. They’ve swelled the ranks of “Top electronic discovery software providers” from 11 to 15 overall. Autonomy and Clearwell have reached the top tier, along with incumbents FTI Consulting, Guidance Software, Inc. and LexisNexis. Of the second tier, 2006 winners Cataphora, DocuLex, ISYS and Oracle are out entirely, Attenex (recently acquired by FTI) and CT Summation are down from tier one, and Epiq systems, iConect and Symantec are first timers to the list. Third tier is all new for the category: AccessData Corporation, Equivio, Kazeon Systems, Inc., Kroll Ontrack and MetaLINCS (owned by Seagate) – note that many of these were previously present on other best-of’s for service or specific software type.

Socha-Gelbmann does offer the caveat that “anyone who makes buying decisions primarily on these rankings is a fool,” although we haven’t seen the quote included in many vendor press releases.

So how then do software purchasers choose a vendor, and what does it mean for the market? We plan to address these questions in our upcoming e-discovery report, in which we’ll be looking at a number of users, vendors and service providers with a range of experience and across sectors, keeping our collective eye on new developments and a view of where the market is headed from here.

What we can tell you as a preview is that it’s exciting to watch such a dynamic market. Now that more companies are becoming familiar with the demands of storing, managing, searching and producing Electronically Stored Information (ESI), they’re no longer buying nick-of-time service. The new standards of the amended Federal Rules of Civil Procedure (FRCP) are not a one-time inconvenience, but require a legally-defensible methodology and the speed to produce on-demand in a number of days. Users are investing in long-term plans for all types of litigation. IT is developing comprehensive strategies for approaching various ESI repositories. Preventive measures are available for monitoring ESI distribution in potentially litigious areas – stopping trouble before it starts in high-litigation operations. These developments are reflected in corporate structure, where IT and legal have more overlap and greater cross-functionality.

Stakes are high, the time-frames for discovery are short – one services exec told us “fast in this business is FAST” – the competition is crowded, and the need is ubiquitous. We’re looking forward to continuing the conversation with many of you – and if you have yet to get in touch, please do so.

I’ll be relocating from New York City to London as of August 1, but continuing in more or less in my same role here at The 451 Group.

After more than a dozen years in Manhattan, I’m moving back to the old country (those of you that know me will know I more or less managed to retain my accent) and as such, I’ll obviously be closer to the European scene. I hope to unearth more European vendors and customers than we’re already covering, although we will continue to actively cover all the US vendors we already follow and continue to dig for more there as well.

I expect to hear more about semantic technology than I do in the US (although that’s already quite a lot) and I expect the drivers for using text technologies of various types to be slightly different in Europe.

August will be a bit hectic sorting things out, but I’ll be fully up to speed by the start of September, that’s for sure.

The only contact that will change is my office number, which I’ll be sending around to key contacts.

Katey Wood, my research associate remains in the 451 Group’s New York City HQ, helping me cover this fascinating market.