Jason Atchley: Kroll Ontrack: A QUICK PULSE ON THE STATE OF EDISCOVERY

by JEN WIGHTMAN on SEPTEMBER 16, 2013 in EDISCOVERY 

Recently, while digging through pages of informational content on the state of electronic discovery, two things became abundantly clear: first, litigation costs are on the rise as “Big Data” continues to get bigger, and second, practitioners must conduct more efficient and cost-effective discovery to navigate exploding data volumes. It is wonderful to have access to so much data that we can all start evaluating our market, but as I looked through the data, quite a bit of it didn’t have much in the way of source details. How much of this was really just “heard it through the grapevine” vs. fact-based analysis?

I don’t dispute the validity of these two general claims asserted in most informational content, but I thought it would be useful to dive into those claims a bit more and find some numbers to back them. With just a bit of digging, I came across some interesting stats on the state of ediscovery and predictions for the future:

1. For litigation, the stakes are rising. In Fulbright & Jaworski’s Ninth Annual Litigation Tends Survey Report, 92% of the nearly 400 responding organizations anticipate the same amount or more litigation in the next year, up from 89% last year. Among those respondents, 54% of them reported spending more than $1 million on litigation expenses (which exclude the cost of settlements and judgments), which was up from 46% in 2010. Furthermore, the number of respondents facing one or more lawsuits with more than $20 million at issue increased across the board from last year. While some of these increases are marginal amounts, the overall amount and cost of litigation appears to be trending up.
2. Ediscovery is growing at a fast pace. According to a report published by Transparency Market Research, the global ediscovery market is expected to grow to $9.9 billion by 2017—a compound annual growth rate of 15.4% from 2010, where the ediscovery market was worth $3.6 billion. The United States ediscovery market alone is expected to grow from $3 billion in 2010 to $7.2 billion in 2017, thereby accounting for nearly three-quarters of the global market. Although the U.S. will account for the majority of the market, the international market is expected to see a 23.2% CAGR between now and 2017.
3. Review is the most expensive portion of ediscovery by a longshot. According to Where the Money Goes: Understanding Litigant Expenditures by the Rand Institute, review accounts for approximately73% of all ediscovery production costs, and outside counsel amounts to approximately 70% of all ediscovery costs. As data proliferates, reducing the amount of time spent on review will likely be the key to controlling costs.

While none of these numbers are necessarily groundbreaking, they provide some backing to claims that costs are on the rise and that practitioners must increase ediscovery efficiencies. However, these numbers are merely a drop in the bucket, and I highly encourage readers to look into each of the studies I’ve mentioned to gain a better understanding of where ediscovery is going.