Electronic discovery, or eDiscovery, is the electronic aspect of identifying, producing, or collecting of stored information from requests produced by law enforcement, attorneys, courts, or other authorized parties. This electronically stored information, or ESI, can include many format types.
Audio and video files, websites, social media content, voicemails, emails, and various documents are included within the eDiscovery industry. Even voicemails and presentation databases are included.
The industry is based on the complexity of the requests. Unlike evidence that is found on hardcopy, ESI includes dynamic metadata, such as author or recipient information, along with information about the properties of each file. This content must be preserved for the ESI to be presentable as evidence without claims of spoilage.
The eDiscovery industry has been active since 1999. In that year, the University of California found that 93% of all information was generated in digital formats.
Interesting eDiscovery Industry Statistics
#1. Litigation costs in 2016 were estimated to be near $20 billion. Since 2014, there are three times more companies that are facing litigation that places the entire organization at risk within the industry. (BTI Consulting)
#2. 1 in 4 attorneys anticipate that their needs for litigation against companies will rise in the next 12 months. Only 14% believe that there will be a decrease in litigation. (Norton Rose Fulbright LLP)
#3. The majority of Fortune 1000 companies spend between $5-$10 million on eDiscovery each year. In 2014, some companies reported spending more than $30 million within the industry. (Market Watch)
#4. About 70% of the costs involved with the eDiscovery industry are the direct review of documentations. That means the total cost for a review within the industry is about $18,000 for every 1 GB of information. (Blickstein Group)
#5. For the 5-year period ending in 2019, industry revenues are expected to grow at an annualized rate of 5.7%. That would result in industry revenues of $1.8 billion. (IBIS World)
#6. 10 GB of information that is obtained through the eDiscovery process is the equivalent of receiving 10 pickup loads of paper to review. (Market Watch)
#7. 38% of corporations have not employed new eDiscovery technologies. When middle-market organizations are included with this data, the percentage rises to more than half of all businesses. (BDO Consulting)
#8. 75% of Chief Information Officers within the U.S. Government say that they are not confident in the quality of their eDiscovery programs. (Deloitte)
#9. 49% of industry professionals say that the most significant impact of the eDiscovery process is the variety, volume, and velocity of disparate data. This is followed by escalating costs which are associated with the industry (42%) and regulatory activity (40%). (BDO Consulting)
#10. The most challenging landscape for the eDiscovery industry is North America, with 63% of professionals placing an emphasis on this market. The next challenging market for the industry is China, with 13% of professionals emphasizing the market. (BDO Consulting)
#11. 51% of eDiscovery professionals say that their biggest challenge is to manage cross-border processes. Another 35% of professionals indicate local access issues, as their largest barrier to hurdle. (BDO Consulting)
#12. The top litigation strategy for legal departments in the U.S. involved with the eDiscovery industry is early case assessment, or ECA. 76% of insurance carriers say that ECA was their primary litigation cost containment strategy. 98% of professionals using ECA state that it is an effective approach. (LexisNexis
#13. 80% of firms within the eDiscovery industry project that there will be an average spending increase of 8.4% on culling tools. Another 70% say that boosting collections and holding tools, by an average of 7%, is another large expected budget increase for the next year. (LexisNexis)
#14. The use of ECA software tool has been growing in popularity within the eDiscovery industry since 2012. About 1 in 3 law firms used these tools in 2012. In 2013, 34% of firms used these tools. In 2014, 37% of firms were using ECA tools. (ILTA Technology)
#15. Sanctions are increasing for companies that do not turn over electronic data. In August 2016, an airline was ordered to pay $2.7 million in sanctions for failing to follow the eDiscovery process. This was in addition to another $4.7 million in sanctions that had already been ordered for discovery violations. (ACEDS)
#16. 57% of organizations spend at least $1 million with the eDiscovery industry every year. (Jatheon)
#17. 96% of litigators who work with the eDiscovery industry say that the time and date stamp within metadata is the most vital information for their cases. (Jatheon)
#18. The global market for eDiscovery software and services is projected to reach a monetary value of $11 billion by 2020. North America will continue to be the largest market, while Japan, Europe, and the overall Asia-Pacific region are expected to see growth. (Jatheon)
#19. Up to 30% of the relevant information that the eDiscovery process would need to access in coming years will be stored in the cloud. In 2015, just 5% of information sought through eDiscovery was stored in the cloud. (Jatheon)
#20. The largest areas of growth for the U.S.-based industry are anticipated in the consulting sector. For the 5-year period ending in 2016, the industry saw annualized growth at $12.5%. (IBIS World)
#21. More than 4,300 businesses are active eDiscovery consultants in the United States. They are responsible for the direct employment of almost 20,000 people, creating revenues that total $4 billion annually. (IBIS World)
eDiscovery Industry Trends and Forecast
As the world shifts towards a formal information age, the eDiscovery industry will continue to experience strong growth. More information is created digitally than ever before, which means there is a greater need for the eDiscovery process every year. It is a cycle that will help the industry see higher revenues, greater demand, and higher wages.
Look for database mining technologies to help make the industry become more efficient in the future as well. Software that can identify document duplication can help reviewers be able to catch the excessive documents before they actually need to review them. By reducing data as much as possible, industry costs are going to remain consistent for clients within the industry.
There will still be questions to answer for the industry in coming years as well. As more organizations encourage their employees to bring their own devices to work, who will be responsible for the costs of eDiscovery? How can work data be recovered if it is stored on devices that are outside of company-operated platforms?
And what happens if someone in the middle of an eDiscovery process gets hacked?
Top players like FTI Consulting, Kroll Ontrack, and CommVault expect good things for the future of this industry. You should as well.