April 24, 2020

COVID-19 Constrained? The Impact of Six Issues on the Business of eDiscovery

Association of Certified E-Discovery Specialists (ACEDS)

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Association of Certified E-Discovery Specialists (ACEDS)

Editor’s Note: The results of the recent Spring 2020 eDiscovery Business Confidence Survey present the unfortunate impact of COVID-19 on the business of eDiscovery. However, for these pandemic-driven results and their potential impact on the business of eDiscovery to be fully understood, they should be viewed through the contextual lens of the results of all eighteen surveys that have been administered to eDiscovery professionals since the inception of the eDiscovery Business Confidence Survey in early 2016.

Budgetary Constraints: A Current Concern for eDiscovery Professionals

The eDiscovery Business Confidence Survey is a nonscientific quarterly survey designed to provide insight into the business confidence level of individuals working in the eDiscovery ecosystem. The survey consists of nine core multiple-choice questions focused on factors related to the creation, delivery, and consumption of eDiscovery products and services. Additionally, the survey contains three optional questions focused on the business operational metrics of days sales outstanding (DSO), monthly recurring revenue (MRR), and revenue distribution across customer bases.

Initiated in January 2016, the survey has been administered eighteen times with 2,089 individual responses. The survey is open to legal, business, and information technology professionals operating in the eDiscovery ecosystem, and individuals are invited to participate primarily via direct email invitations.

The latest survey was administered in the spring of 2020 and had 172 respondents in roles that included tactical execution (36.0%), operational management (35.5%), and executive leadership (28.5%). Industry segments represented in the survey included law firms (36.6%), software and service providers (29.1%), consultancies (16.9%), corporations (9.9%), governmental entities (4.7%), media and research professionals (1.7%), and others (1.2%).

One of the questions in the quarterly survey asks participants to select from a listing of six choices the issue they view as potentially having the most impact on their eDiscovery business during the next six months. The issues presented include:

Budgetary Constraints
Data Security
Inadequate Technology
Increasing Types of Data
Increasing Volumes of Data
Lack of Personnel

While not all-inclusive, the listing of issues provides a realistic overview of potential areas that appear to have a direct and ongoing impact on the business of eDiscovery.

Based on the aggregate results of past surveys, the following findings and charted overviews of responses to the question of issues impacting business may be helpful in understanding the collective mindset of many industry experts regarding these issues and their impact on the business of eDiscovery.

Six Key Findings in the Spring of 2020

In the spring of 2020, 51.2% of respondents viewed budgetary constraints as potentially having the greatest business impact on their business in the next six months. This percentage is the highest of all concerns represented in the survey and also is the highest rating for any business performance concern since the inception of the survey. This is also the tenth time in eighteen surveys that the issue of budgetary constraints has been the top concern or tied for the top concern by survey respondents. (Charts 1,2, and 3)
Increasing data volumes continue to be a consistent concern for eDiscovery professionals with 16.3% of spring survey respondents viewing data volume challenges as potentially having a substantial impact on business in the next six months. However, the level of respondent concern in this area is the lowest since the inception of the survey. (Chart 4)
The impact of a lack of personnel on eDiscovery business performance decreased slightly during the last quarter and is the top concern for 11% of survey respondents. (Chart 5)
The percentage of respondents that viewed increasing types of data as a top business concern decreased significantly in the last quarter from 25.3% in the winter of 2020 to only 8.1% in the spring of 2020. This is also the lowest rating in the category since the inception of the survey. (Chart 6)
The percentage of respondents viewing the impact of data security as a top business issue decreased 4.2% from the last quarter and is now viewed as the top concern by 8.1% of survey respondents. (Chart 7)
In the spring of 2020, the impact of inadequate technology as the top business issue decreased by 2.3% from the last quarter and is now viewed as the top concern by only 5.2% of survey respondents. This is the lowest rating of any business performance impact concern in the spring 2020 survey. It is also is the sixteenth time in eighteen surveys that the impact of inadequate technology has been rated as the lowest area of business performance concern by survey respondents. (Chart 8)

Considering Eighteen Quarters of Results from 2016 to 2020

From a top issue perspective, the following potential issues and the number of quarterly times they have been considered the top concern by survey respondents is shared to create context as to the cyclical concerns of eDiscovery professionals.

Budgetary Constraints: The top concern ten times in eighteen quarters (3x Winter*, 3x Spring, 2x Summer, 2x Fall).
Increasing Volumes of Data: The top concern six times in eighteen quarters (2x Winter*, 2x Spring, 1x Summer, 1x Fall).
Increasing Types of Data: The top concern three times in eighteen quarters (1x Winter, 1x Summer, 1x Fall).
Data Security: Never ranked as the top concern.
Lack of Personnel: Never ranked as the top concern.
Inadequate Technology: Never ranked as the top concern.

* Top concern tie between Budgetary Constraints and Increasing Volumes of Data in the Winter of 2017.