Patrick Oot, a lawyer for Verizon interviewed by The Economist, claims almost every case involves e-discovery and spits out “terabytes” of information—the equivalent of millions of pages.  Almost every case? That may be his experience, but as an industry professional, it’s not mine and I’m still amazed:  many lawyers –especially in family law– haven’t yet had a case where they’ve been asked to or found it necessary to image a single hard-drive.  Some tell me they’re holding out for as long as possible.

Recently, a few reports have been published, highlighting a phenomenon that I and, I suspect, many of us anticipated:  that the cost and burdens of e-discovery would become eventually become unwieldy  and unmanageable, even for the firms with an infrastructure and regular need to deal with it.  But, not everyone paints the picture as bleakly  –certainly not the EDD firms that benefit.

A telephone research survey sponsored by EDD firm Fios, Inc. concluded: technologists and lawyers are working more closely than previously thought; the most significant investments are being made in legal hold and archiving tools; and the 2007 amendments to the federal Rules didn’t have the impact feared.

However, a
joint survey, released in September, by the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System reports that a majority of those surveyed found that the discovery system in particular is broken and “has become an end in itself,” and that “Electronic discovery clearly needs a serious overhaul.” Nearly a quarter of those surveyed characterized the civil justice system is “broken.” The report claims that 83 percent of nearly 1,500 lawyers responding found costs  –not the merits– of a case to be the deciding factor in settling.  A significant 68 percent of the college fellows disclosed that civil cases do not get filed because of the prohibitive litigation costs.

Frankly, I’m not so sure that surveying “college fellows” on the practicality of electronic discovery are the right people to ask these questions of.  So, I decided to ask a colleague, Sharon Nelson, for her perspective.  Nelson and her husband, John Simek, operate a computer forensics firm in Virginia.  She is an attorney, frequent lecturer and co-author of the Electronic Evidence and Discovery Handbook.

Nelson concludes –as I have, also– that, “The truth is often somewhere in the middle.” She recalls, “Discovery was a nightmare even in paper – because there was often so much. The problem has grown exponentially with ESI, because there is so much more data. However, a portion of the blame belongs to all of us. We don’t ‘take out the trash’ so our garbage heap of data expands constantly. It is just too cheap and easy to move it all to ever larger hard drives.”

As a result, e-discovery has led to a new boom industry of specialized service providers which  charge $125-600 an hour. George Socha (based here in Minnesota and who adminsters an annual survey regarded as the industry benchmark) estimates that their annual revenues have grown from $40m in 1999 to about $2 billion in 2006 and may hit $4 billion next year.

“Additionally, there are now at least two tiers of EDD companies – the whales, who are interested only in the mega-firms and their cases, and the smaller fish, who handle the small to mid-range cases of small to mid-range firms,” Nelson noted. She also observed that, “There is little interaction between those two worlds – and huge price point differences,” and believes that, “A continuing shake-out among vendors is probably likely, especially given the state of the economy.”

Further reading: