16 Trends Shaping The Future Of eDiscovery (Part 1)

How To Turn Coming Disruption Into Competitive Advantage

It has been said that the future is the last great frontier. The future is, in fact, a topic of conversation that comes up with clients on a routine basis. Clients often ask these types of questions: “What’s coming down the road? What do I need to keep a close eye on that could potentially disrupt our operations? What trends should I be watching both now and in the future?” This has come up often enough that we thought we would write a complete article about it.

We’ve been watching eDiscovrery trends now for several years. Over that time, we’ve learned a lot of lessons. In this thought piece, we’d like to share with you 16 trends we’ve identified that will shape the future of eDiscovery. We share these trends because we want you to be aware of what’s coming. But we also want to help you be anticipatory, by leveraging our experience, so you can stay ahead of the ever-evolving eDiscovery landscape.

Who Needs To Watch These Trends?

In general, we believe any organization that has made a significant investment in eDiscovery, or is dependent on eDiscovery to serve clients and generate revenue, needs these ideas. These organizations are likely subject to the sorts of disruptions that can be game changing:

• Law firms
• eDiscovery service providers
• Consultancies with a core competency or practice area in eDiscovery
• Corporations, government agencies and other stakeholders who prefer to manage eDiscovery in-house

It’s one thing for these organizations to be nimble and responsive, to adapt to disruption as it is unfolding. It is quite a different thing to anticipate disruption, to position for it and to lean into it before it changes the landscape. That is ultimately my purpose in writing this thought piece. We want to equip you with a framework for thinking about the future so you can leverage disruption for competitive advantage, rather than being caught off-guard by it and trying to play catch-up while it’s happening.

As we speak with clients about this topic, we tend to hear two types of questions:

• What’s coming in the very near future? Are there imminent trends happening right now for which we might be poorly positioned? Are there technologies that we’ve invested in that might age out much faster than we’ve predicted? Are we considering certain moves and investments that may not be advisable? How can we know we’re making the best possible choices for our needs? How will the choices I’ve sponsored and I’m about to sponsor reflect on my leadership? Will they suggest that I’ve been thoughtful and anticipatory or will they suggest I’ve been asleep at the wheel?
• What’s coming down the road? What can we anticipate that might impact us over the next several years? Are there any moves we should be making now to ensure the right things happen in the future? What technologies should we be planning to budget for and steer our architectures toward? What should we avoid? What would a five-year roadmap look like for our organization? What disruptions might be coming and how can we prepare for them or even leverage them for competitive advantage? 

My Approach To Answering These Questions

Let me say for the record that I don’t have a crystal ball and I cannot predict the future. But that doesn’t mean that we can’t anticipate the future. That’s an important distinction: the difference between being anticipatory and being predictive. In my mind, this is the difference between saying “here is what I know will happen in the future” versus “here are several trends that are likely to unfold in the future.”

We have found Daniel Burrus’ Hard Trend methodology to provide a great framework to become more anticipatory. He defines hard trends as trends that are based on future facts, those things that are almost certainly going to happen—and soft trends as trends that are based on assumptions—those things that might happen. What’s the difference? For me, hard trends are usually already evident in the marketplace and will likely be around for quite some time, five years or longer. As Burrus points out in his books, “Hard trends are about future certainty”. There is a 90% chance or greater that hard trends will impact the entire industry for several years.

Burrus goes on to say that “soft trends are uncertain. They may or may not happen in the future.” They may have a long-term impact or be short-lived. Sometimes the seeds of these trends are already evident in the marketplace. But other times, they’re not at all evident. They may also impact certain sectors of the market while not impacting others. There is a 50-50 chance that soft trends will materialize and become reality.

So how do we recommend that you use this way of thinking?

• We recommend that you pay particularly close attention to the hard trends. Because these are future certainties, I recommend that you prepare for them now. Hard trends require short-term action, so you’re not caught off guard.
• We recommend that you track the soft trends over time. These may not require immediate action, but they do require careful monitoring because they are most likely to be disruptive. I recommend that you find information sources that will help you track the trends and keep up with them at least monthly. This way, you can anticipate and be ready to pivot before the trends upend your operations.

Given this definition, we asked our colleagues about their perspectives for the future. After comparing notes, we identified eight hard and eight soft trends. The eight hard trends include:

1. Data and devices will proliferate.
2. Cybersecurity will remain preeminent.
3. eDiscovery architectures will become more complex.
4. IT teams will continue to struggle to master eDiscovery.
5. eDiscovery Managed Services Providers (eDMSPs) will become indispensable.
6. Competition for clients will increase.
7. Application developers will increasingly compete with service providers.
8. Interest and investment in legal technology will increase.

The eight soft trends include:

1. Structured data may overtake unstructured data for review.
2. A major global technology company may enter the eDiscovery software and services market.
3. SaaS and Cloud could overtake DIY (on-prem) or vendor-based approaches.
4. Truly innovative features in eDiscovery apps may disrupt the industry.
5. Service providers will likely face increased pressure to offer value-add services.
6. Net-new entrants will likely be cloud-native only.
7. Traditional M&A activity may decrease as R&D investments increase.
8. A new generation of legal professionals may very well change the game.

In this thought piece, I’ll provide our perspectives on the eight hard trends we’ve identified. In my next thought piece, part two, I’ll provide our perspectives on the eight soft trends we’ve identified.

Hard Trend 1: Data And Devices Will Proliferate

It’s hard for us to overstate the impact this will have on eDiscovery environments. If you think your systems are over-stuffed with data now, just wait. A lot more data is coming and probably from different sources than you’re working with today.

You’re likely familiar with gigabytes and terabytes and you might have heard of zettabytes. But we’ll all soon be measuring global data in zettabytes (a billion terabytes). I recently wrote a Forbes article about this phenomenon that quotes an IDC study which states: “The amount of data created over the next three years will be more than the data created over the past 30 years, and the world will create more than three times the data over the next five years than it did in the previous five.”

So where is all of this data coming from? Literally everywhere. COVID-19 certainly drove the adoption of BYOD (bring your own device) and shadow IT, as workers suddenly began to use more personal devices for business. Those devices and the data they generate will almost certainly be subject to review. IoT (the internet of things) is also a driver of data production. I fully expect that data from smart home appliances will one day be on our clients’ review platforms.

As for devices, we see no indications of a slow-down in their production. There is simply too much money to be made by manufacturers. The first smart phone was introduced by IBM in 1992. Today, there are nearly five billion smartphones in use worldwide and there’s no end in sight. Wearable technology, like smart watches and fitness trackers, also generate data and are proliferating at an amazing clip.

My recommendations:

• If your current environment does not have the capacity to scale data storage quickly and affordably, this should be a focus point for you in the very near future. Environment scaling is a top concern with many of our clients.
• If you don’t yet have the forensic capabilities to extract data from multiple device types, while maintaining a chain of custody posture that will hold up to intense scrutiny, I recommend that you put this in place. It is also very likely that you’ll need to evolve skillsets to address soft trend one—structured data overtaking unstructured data for review.

Hard Trend 2: Cybersecurity Will Remain Preeminent

The data that ends up on review platforms produces a target-rich environment for hackers. They seem to know that corporations have a wide range of measures in place to protect their data when it resides on internal systems. But when that data is migrated to review platforms, how secure is it really? Further, what additional risks are introduced from all of the third-party reviewers of the data?

Cybersecurity is a top concern for all of our clients and it remains a fundamental building block for eDiscovery operations. I see no indications that this will change any time soon. My sense is that those organizations that have not prioritized security put themselves at risk for going out of business.

My recommendations:

• If you haven’t kept your security practices and technologies up to date, start right now. You literally don’t have time to wait.
• If you haven’t conducted a penetration test in the last year, I recommend that you do so. It’s important to understand your unique risk profile.
• If your security protocols and technology are slowing down your users, start doing the research now for better alternatives. They are out there.

Hard Trend 3: eDiscovery Architectures Will Become More Complex

In the past, many matters could be reviewed on a single laptop in a private office setting. But as data and devices have proliferated, this is far less common. I predict that most matters will increase in complexity (multiple devices—not just hard drives from the IT department) and data size even as deadlines become even tighter. This means performance and speed must correspond accordingly.

These environments now contain the same type of systems (albeit in smaller scale) as an entire business: servers, laptops, storage and backup, databases, networks, security and very complex applications. I predict this trend will not only continue, it will accelerate. 

We see growth in complexity along these axes. First, there will be more entrants to this space with new features and benefits that will require careful evaluation. Second, there will be even more opportunities to integrate these new technologies in all sorts of ways, some of which could be disastrous or brilliant. Third, the need for seasoned and experience eDiscovery architects will outstrip the supply. One major imperative for eDiscovery architects will be figuring out how to do more with less. The profitability of eDiscovery will receive greater scrutiny as budgets go up, and they certainly will.

My recommendations:

• Rather than thinking about eDiscovery as a line of business, department or function, think of it as an enterprise unto itself.
• If you have been relying on non-eDiscovery experts to architect and maintain your eDiscovery environment (such as IT generalists), you will likely be behind the curve very soon.
• If you don’t have a seasoned eDiscovery architect, you need one now.
• However much you might have budgeted for people, process and technology for eDiscovery in the past, I recommend that you expect to at least double that budget for the future.

Hard Trend 4: IT Teams Will Continue To Struggle To Master eDiscovery

We want to say for the record how much I admire and appreciate IT. We have many friends in this space and they are true professionals. The challenge, as I see it, is that IT teams frequently underestimate, or are unaware of, the complexity of architecting eDiscovery environments and the burden of supporting them. We don’t believe it’s reasonable to expect IT to come to the table with the kind of niche expertise and support staff that are required for eDiscovery.

In many of the accounts we serve today, the IT function breathes a huge sigh of relief as soon as they realize that we provide expertise they don’t have and that we don’t want to take over their jobs. It often takes a bit of convincing on our part to prove that we want to be a partner to IT, not an adversary. In fact, in many accounts, the number one determinant of how much impact we can have on that client depends on the response of the IT team to our presence. Why do IT teams struggle with eDiscovery?

• As noted above, eDiscovery is a very technologically complex enterprise, not so much a department or function. To stay on top of this industry, you must be really dedicated to it, attending conferences, reading articles, digging into technical specifications and learning from real-world experience in multiple environments. It takes time, energy and focus to be an expert in this space and most IT professionals simply don’t have that to give.
• eDiscovery often requires 24x7x365 support and very fast response times, sometimes for global operations. Most IT teams are not staffed for this.
• There are certain cultural quirks that are inherent to this industry that many IT people, in my experience, seem to struggle with. Working with lawyers and legal teams requires a certain touch and approach. These people are often strong personalities who expect maximum performance in minimal time. It is incredibly easy for IT people to feel unappreciated and disrespected.

My recommendations:

• If you are relying on your IT team today to architect and support your eDiscovery environment, I would encourage you to be open to other alternatives.
• Whether you get it from us or from another provider, I recommend that you engage in a top-down assessment of your eDiscovery operation. Not one client who has done this with us has ever asked for their money back. The insights they gain from this exercise can be transformative.

Hard Trend 5: eDiscovery Managed Services Providers (eDMSPs) Will Become Indispensable

As a corollary to the point above, we believe eDMSPs will become, in fact already are, indispensable. For many years, eDiscovery was something of a cottage industry. With just a bit of technology and a few reviewers, you could earn decent revenues in this space without a huge lift. IT teams could easily support that business model. I believe those days are virtually over. As the systems and support requirements for eDiscovery have grown, so has the need for experts to architect, maintain, manage and optimize these environments.

This is uniquely the realm of the eDMSP. My colleague Adam Chardukian wrote a great Forbes article about what to look for in an eDMSP. He explains why eDMSPs have become popular and what can happen if you don’t have an eDMSP watching over your environment:

• Cost escalations could drain profits.
• Missed deadlines could lead to frustrated clients who migrate to other providers.
• Unresolved problems could lead to unstable and slow-performing environments.
• All of this could produce attrition as dissatisfied workers look for better jobs (which always seems to happen at the worst possible time).

My recommendations:

• If your organization has not conducted due diligence to find an eDMSP partner, I recommend that you start this today.
• If you have not clearly defined the outcomes you want to see from such a partnership, I recommend that you begin to make that list.
• If you don’t know where to start in thinking about what to look for in an eDMSP, please read Adam’s article. It will really help.

Hard Trend 6: Competition For Clients Will Increase

In the US, we predict supply of eDiscovery services will outstrip demand. We believe that buyers of eDiscovery services have their pick of providers and will be in a strong negotiation position. When this happens, competition to win deals will not only increase, it will likely have an adverse impact on traditional business models. Menu billing models, such as price-per-gig for storage, will see the greatest downward pressure on fees as clients deem these services to be a commodity.

Across the globe, we see a different trend unfolding. The US is a relatively mature eDiscovery market, even though many changes are coming. But in the international market, maturity of these services is rather lop-sided. Some regions nearly mirror US maturity while others represent major growth opportunities. We believe Asia, LATAM and even certain regions within EMEA will see a spike in demand for eDiscovery services over the next several years.

My recommendations:

• If your organization offers primarily a menu-billing set of services today, I recommend that you carefully consider how to offer value-add services that differentiate your brand.
• If you have not fully committed to marketing and brand awareness programs, I recommend that you re-consider this. Prospective clients cannot choose you if they don’t know about you. With competition being stiff, you won’t be in the running if your addressable market doesn’t know your brand name.
• If your operations are exclusively in the US today, I recommend that you begin to explore international opportunities for new client acquisition.

Hard Trend 7: Application Developers Will Increasingly Compete With Service Providers

We predict that eDiscovery application developers will increasingly seek new market share through professional services offerings. When app developers want to grow, but they can only sell so many licenses, what will they do? Because they already know eDiscovery inside and out, we predict they’ll leverage that expertise to offer consulting and value-add services. This approach is already quite successful for major software companies, many of whom have highly profitable professional services teams.

What services will they offer? That’s hard to predict right now. But we anticipate that their target will likely be similar to what service providers offer today: hosting (managing client data on their systems), workflow consulting (optimizing use of their technology and the overall environment), data processing (especially for large data sets where reviews cannot take place until processing is complete), and data loading (to give reviewers a jump start on matters).

My recommendations:

• Select your eDiscovery application vendors with an eye towards this issue, especially if you share client contact information with them in the cloud.
• If you have not conducted a needs assessment exercise in the last few years, I recommend that you do so soon. This can help you understand the landscape for potential unmet needs that could be great new revenue sources for your business.
• If your organization’s revenue today is largely comprised of commoditized services, I recommend that you brainstorm and begin to offer value-added services that application developers cannot quickly or easily mimic.

Hard Trend 8: Interest And Investment In Legal Technology Will Increase

Investments in legal technology hit an all-time high in 2019, topping out at over 1.2 billion. We have every reason to believe this trend will not only continue, it will likely accelerate. Global consumption of eDiscovery products and services are also predicted to rise, even as we come out from under the malaise of COVID.

Complex eDiscovery, a think tank that tracks this industry, predicts that the eDiscovery global market for software and services will grow from 10.89 billion in 2020 to 15.12 billion by 2025. Much of this growth will be stimulated by investments in legal technology. Most of the investments will come from private equity firms that are looking for exciting new opportunities in a growth market.

What might this mean for your eDiscovery environment? While that’s difficult to predict, I feel confident in making these observations.  

• Most eDiscovery environments are built around a primary eDiscovery application. This drives work-flows, production schedules, staffing, infrastructure investments and a host of other decisions.
• As investment in legal technology accelerate, it would not surprise me to see existing software developers (for whom you might already have licenses in place) add substantial new features to their platforms to remain competitive. In other words, exciting new features could be just around the corner.
• New entrants to this space could place tremendous pressure on existing players. While it’s always difficult to predict how these events might play out, history shows us that increases in competition usually produce better options for buyers: lower fees, attractive features, willingness to negotiate and a wider range of options to choose from.

Stay Tuned

In our next thought piece on this topic, we’ll identify eight soft trends that may impact the eDiscovery industry. But for now, let’s quickly review the eight hard trends that will impact nearly every eDiscovery environment over the next few years:

1. Data and devices will proliferate.
2. Cybersecurity will remain preeminent.
3. eDiscovery architectures will become more complex.
4. IT teams will continue to struggle to master eDiscovery.
5. eDiscovery Managed Services Providers (eDMSPs) will become indispensable.
6. Competition for clients will increase.
7. Application developers will increasingly compete with service providers.
8. Interest and investment in legal technology will increase.