E-Discovery Preparedness: Speeding Up in a Slowdown
Interest in electronic discovery within many organizations has risen in the past four years. One telling data point is the relative rise in search queries on Google for the term "ediscovery" (see graph on Page 13, E-Discovery, February 2009 ). A report from Google Insights for Search (www.google.com/insights/search shows a spike of interest at the end of 2006, driven by the e-discovery-relevant revisions to the Federal Rules of Civil Procedure made at that time. 2007 shows sustained increased interest, followed by a further acceleration throughout 2008. What does this mean about how organizations are thinking about electronic discovery? And, in the context of a difficult economy, what does it foreshadow for 2009?
2006–2008: Mixed Signals
One potential reading of the data is that the FRCP revisions at the end of 2006 called attention to the issue of e-discovery, but organizations then spent much of 2007 stalled, trying to figure out how to respond. In 2008, companies slowly began to act, creating e-discovery preparedness plans, examining their spend on third-party vendors, and installing systems in-house to better manage their electronically stored information (ESI) in advance of discovery.
This hypothesis seems to square with reports showing increased focus on proactive strategies for e-discovery. A November, 2008, Gartner report notes that "the e-discovery market’s next evolution will focus on information governance and information retention management technologies." Having been exposed to emergency, reactive e-discovery circumstances over the last several years, organizations are looking to contain costs by getting out in front of the problem.
Despite this increased momentum, it’s widely acknowledged that many organizations are still under-prepared to preserve and collect ESI in the event of litigation and are slow in taking steps to ready themselves. A September, 2008, survey by the Radicati Group shows that 41% of organizations responding do not use an email archiving system. But more than 60% of these organizations said they plan to deploy one. This statistics represent a common underlying situation at many companies: preparing for e-discovery is acknowledged as a top priority, but organizations continue to delay taking action.
2009: E-Discovery and Cost Cutting
As we enter a difficult economic climate in 2009, the resources organizations allocate to e-discovery preparedness will come under further scrutiny. If any spend can be justified, it must be backed up by demonstrating a strong return on investment. As the focus turns more forcefully toward cost cutting, it becomes more likely that organizations will overcome procrastination and follow through on their intentions to deploy archiving and other technologies to better manage e-discovery costs. Economic pressures will reveal the extraordinary return on investment organizations can achieve through these methods. These categories of cost savings can include:
- Less IT personnel time spent locating, preserving and collecting ESI;
- Decreased processing and review costs from sending less irrelevant data to third parties;
- Lowered risk of sanctions and adverse legal outcomes;
- Increased legal effectiveness through early case assessment; and
- Lowered IT infrastructure costs.
With many analysts estimating the average cost per e-discovery incident reaching above $1 million, cutting costs in these categories can result in savings of hundreds of thousands or millions of dollars depending on the size and litigation characteristics of the organization.
In this context, the economic pressures of 2009 may be the catalyst that will finally drive organizations to act and reign in their discovery costs.
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