Inevitable Expense? Corporate E-Discovery Spend Likely to Increase Next Year
Organizations may finally—either by foresight or necessity—be taking a look at the bigger picture when it comes to managing the growing overflow of data at their disposal.
April 17, 2019 at 09:30 AM
4 minute read
BDO recently released its fifth annual “Inside E-Discovery and Beyond” survey compiled of responses from 100 senior in-house counsel from companies across the United States, and the results were somewhat surprising given the current e-discovery climate.
George Socha, a managing director in BDO's Forensic Technology Services practice, said that while e-discovery tools continue to improve, they aren't quite where they need to be just yet. Plus, investing in that process remains an expensive proposition for corporate counsel and the companies they represent.
Still, the survey indicates that more than half of corporate counsel respondents intend to increase their spend on e-discovery over the next year—so what gives?
Socha raised two possibilities: “One thing that can drive those costs up and that they can be looking at is that they've got more data they need to deal with for litigation and for investigation.”
He thinks that even if the rate of litigation a company faces in a typical year remains relatively flat, the amount of data involved in those cases will grow and become more difficult to collect as the number of storage platforms and formats continues to diversify.
The survey itself would seem to support that theory. Among the large organizations that responded, 61 percent considered big data to be the e-discovery related issue that would have the greatest business impact. Respondents in the upper middle market (57 percent) and lower middle market (58 percent) also ranked big data at the top.
All of which leads into possibility two: Forward-thinking executives concerned about an eventual data overload.
“They could be looking at all of this and saying, 'If we don't start spending some more money now to try to get our arms around this and try to more effectively control this, it's going to explode beyond any level we can control,'” Socha said.
To be sure, not all e-discovery factors were created equal, at least in the eyes of different companies. Survey respondents were asked to rank issues such as “predicting the total cost of e-discovery early in the case” and “reducing e-discovery costs” by order of importance.
Among 22 percent of all organizations, the ability to use previously collected and processed electronically stored information for other matters, such as a string of similar litigation, came out on top. Factors that emphasized early awareness in a case followed most closely behind, whether it was ”understanding the universe of potentially responsive evidence” at 22 percent or “predicting the total cost of e-discovery” at 19 percent.
Socha noted the distribution of responses across those categories was more even than it had been in previous years. In the 2018 survey, for example, no organizations ranked “disposing of data after e-discovery ends” as the most important factor. This year, that same category increased by 10 percent.
One possible explanation for the results leveling out is that companies are beginning to take a more holistic approach to e-discovery rather than concentrate the bulk of their efforts on a single component.
“I hope what that means is that people taking a more methodical approach to all of this,” Socha said.
As for next year's survey, Socha already has some thoughts on what could be in store and most of it is driven by privacy. Stringent laws abroad like the European Union's General Data Protection Regulation (GDPR) have already forced some American companies to put their data under a microscope.
Regulatory efforts in states such as California and Washington could wake up other domestic businesses that up until now have been able to avoid thinking too deeply about privacy or the data they collect. Socha anticipates a spillover effect into e-discovery.
“As money gets spent on data privacy it also will mean increased focus on information governance more generally. How do we get our electronic house in order so that data privacy is not so much of a challenge for us.”
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