The use of Cloud-based e-Discovery tools is accelerating. This is one of the key findings from a 21-page report by Everlaw and the Association of Certified e-Discovery Specialists (ACEDS). The “2022 Ediscovery Innovation Report: Leaders and Laggards” (registration required) looks at the current landscape of e-Discovery tools and their use.
The findings are based on a survey of 195 US-based legal professionals from various sectors, private, public internal law teams and law firms. 57% now use a full or hybrid cloud-based solution (2021 37%). While the tipping point has been reached, 38% still use a fully on-premises-based solution. 96% of respondents see the shift to the cloud as inevitable by 2024.
Chuck Kellner, Strategic Discovery Advisor, Everlaw, commented: “Cloud-based e-Discovery adoption has crossed the tipping point for the first time. Cloud is not just the future of e-Discovery, it is increasingly the norm. It’s propelled by the pandemic and proven out by the success of early adopters.”
The report also looks at the difference between systems managed in-house and those managed by third parties. The use of in-house managed cloud-based technology has accelerated by 10% over the last year to 24%. However, 19% are using cloud-based solutions managed by third parties. The report does not reveal how those figures have changed over the last year though
There are many differences between the leaders (early adopters) and the laggards. It indicates that laggards face more challenges than those who have already moved. The early adopters are also reaping more benefits.
What is in the report?
The report is laid out well, with a mix of graphics, data and analysis by the authors. The report identifies seven key findings.
- E-Discovery is rapidly moving to the cloud
- The contrast between the leaders and laggards is stark, with leaders attaining workflow efficiency, predictable costs and access to advanced tools. Kellner noted: “In 2022, the data is clear: not only are cloud adopters seeing significant advantages, but those tied to legacy solutions continue to fall behind.”
- On-premises users believe the cloud is expensive and hard to learn, yet those that have switched disagree. Change management is needed. Perception is an issue, as Kellner states: “Many on-prem e-Discovery users don’t know what they’re missing, and when faced with economic headwinds, they are likely to find themselves flat-footed as cloud competitors race ahead.”
- On-premise users pay more than cloud-based users for add-on solutions such as analytics. Kellner said: “On-premises e-Discovery users are paying more at every step of the e-Discovery process, from data ingestion and document review to case analytics and productions. With the rise in data types and quantity, this looks to be unsustainable.”
- Laggards report 37% more challenges than the cloud-based leaders.
- Laggards still do not appear to understand the benefits of the cloud, especially regarding scalability and speed.
- Data Management remains a challenge for both cloud-based and n premises
Perception, challenges and benefits of e-Discovery
Perception
The report highlights the perception gaps across the legal profession around the benefits and challenges that cloud-based and on-premises-based users face. The laggards have misconceptions holding them back, whilst the leaders are reaping the benefits of early adoption. If something doesn’t change, the cost models of e-Discovery for leaders will lead to greater business and/or higher profits. The laggards beware!
Challenges
While leaders and laggards face challenges, in most cases, the challenges are greater for laggards using on-premises solutions. Cloud-based users face more unpredictable costs (15%) than laggards (7%). The authors analyse the reasons behind this, rightly offering unpredictable data sizes and consumption-based pricing as reasons.
Investment in on-premises solutions is only predictable until it must be replaced. A qualitative element may have drawn this issue out more. However, the authors rightly point out that the TCO is more important. Cost should be looked at over time, but it may mean that legal teams must be cognisant of how data volumes could impact their charging models.
Cloud users face fewer challenges across several other categories, with the difference between the scores substantive in:
- Managing new or complex files types: Cloud 26%, on-premises – 41%
- Manual workflows: Cloud 20%, on-premises 38%
- Lack of staff: Cloud 17% on-premises 34%
- Speed or slowness of solution: Cloud 11%, on-premises 28%
Benefits
Cloud-based users are reaping huge benefits and increasing the gaps.
- They can deal with greater case sizes and often do
- While technology costs may be unpredictable cloud-based users can control the wider e-Discovery costs
- Adopting technology such as AI transcription, analytics, and data ingestion is easy
Additional services cost more for laggards than leaders. For example:
- Foreign language translation: 84% of laggards pay more, and only 29% of leaders do
- Security and data privacy: 40% of laggards pay more, and only 21% of leaders do
- Importantly and omitted from the research is that cloud-based providers invest more and often have better security than on-premises solutions
- TAR and advanced analytics: 40% of laggards pay more, and only 19% of leaders do
Enterprise Times: What does this mean
This report makes for fascinating reading. The research validates the benefits of legal teams using cloud-based e-Discovery solutions. Perhaps it omits a deeper analysis around in-house vs third-party managed solutions. However, there is a wealth of information for IT leaders within laggards organisations. They can use it to help convince the business and help build a justification for moving to a cloud solution.
The report concludes: “The legal industry is at a turning point. The days of overly complex, incredibly cumbersome discovery technology are increasingly behind us. So too, the ad-hoc, one-off approaches that have long been the norm. When it comes to e-Discovery, the legal industry’s transformation to the cloud is well on its way.”
The question is whether you want to be a laggard or a leader? The answer for all should be a leader. Barriers remain, and the change management process and internal communication are critical to success.
The report does not highlight that the data shows that leaders still face challenges. Cloud-based solutions are better, but they are not perfect, and IT leaders should be careful not to paint a utopian image. They are definitely better than what many use, it is an evolutionary improvement. It was the car that replaced the horse, not teleportation.
