Article by Rob Robinson
The Business of eDiscovery in the Winter of 2020
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.
Specific survey questions include:
- Which of the following segments best describes your business in eDiscovery?
- How would you rate the current general business conditions for eDiscovery in your segment?
- How do you think the business conditions will be in your segment six months from now?
- How would you guess revenue in your segment of the eDiscovery ecosystem will be six months from now?
- How would you guess profits in your segment of the eDiscovery ecosystem will be six months from now?
- Of the six items presented below, what is the issue that you feel will most impact the business of eDiscovery over the next six months?
- In which geographical region do you primarily conduct eDiscovery-related business?
- What are best describes your primary function in the conduct of your organization’s eDiscovery-related business?
- What are best describes your level of support in the conduct of your organization’s eDiscovery-related business?
- How would you characterize the trajectory of your organization’s Days Sales Outstanding (DSO) during the last quarter?
- How would you characterize the trajectory of your organization’s Monthly Recurring Revenue (MRR) during the last quarter?
- Which of the following statements best describes the distribution of your organization’s revenue across your customer base during the last quarter?
Initiated in January 2016, to date the survey has been administered seventeen times with more than 1900 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 winter of 2020 and had 146 respondents in roles that included executive leadership (32.1%), operational management (34.2%), and tactical execution (33.6%). Industry segments represented in the survey included software and service providers (39%), law firms (30.8%), consultancies (13.0%), corporations (8.9%), government (2.7%), media and research (1.4%), and other (4.1).
Based on the aggregate results of seventeen past surveys, the following findings and charted overviews of responses to survey questions may be helpful in understanding the collective mindset of many industry experts regarding the business of eDiscovery.
Eighteen Survey Observations
Observations on Business Conditions (Charts 1-4)
Business Climate (Chart 1 and 2)
- Just over 91% (91.1%) of eDiscovery Business Confidence Survey respondents feel the current business conditions are good or normal in the winter of 2020. This combined confidence level represents a 5.6% decrease in these same feelings when compared to the fall of 2019 where 96.7% felt the conditions were good or normal.
- Exactly half of the survey respondents (50.0%) characterized the current business climate as good. This represents an increase from 48.7% of respondents who viewed the business climate as good in the fall of 2019. This slight increase from the fall of 2019 represents a continuing cautious optimism in the current general business climate for eDiscovery.
- Almost 9% (8.9%) of respondents classified the current business condition as bad. This represents a strong increase of 5.6% in this area over the last quarter.
- In the winter of 2020, 43.8.% of eDiscovery Business Confidence Survey respondents feel that business climate conditions will be better in six months. This is higher than sentiment in the fall of 2019 where 38.7% of survey respondents felt that the business conditions would be better in six months. This also represents an increase from the fall of 2019 when the lowest rating in this area since the inception of the survey was reported and may indicate gradual warming of business conditions.
- The number of survey respondents feeling the business conditions will remain the same in six months decreased slightly to 53.4%. While a slight decrease from the fall of 2019, this still is the fourth-highest rating in this area since the inception of the survey and represents the fourth quarter in a row that respondents rated this area at greater than 50%.
- The number of respondents expecting the business climate of eDiscovery to be worse in six months dropped to 2.7% in the winter of 2020, down 1.3% from the fall of 2019.
Revenue Expectations (Chart 3)
- In the winter of 2020, 51.4% of survey respondents feel that revenue in the next sixth months will be higher than today. This percentage is higher than feelings on this metric in the fall of 2019 (39.3%) and the summer of 2019 (41.6%) and represents a strong rebound rating for this metric as it is the highest rating in this area since the fall of 2018.
- Less than half of the survey respondents (44.5%) feel that revenue in the next six months will remain the same. This represents an 8.2% decrease quarter over quarter from 52.7% in the fall of 2019.
- The percentage of respondents who feel that revenue in six months will be lower than today dropped from 8.0% in the fall of 2019 to only 4.1% in the winter of 2020.
Profit Expectations (Chart 4)
- More than one-third of survey respondents (35.6%) feel that profits will be higher in six months than they are today. This is a slight increase from the fall of 2019 when 33.3% of respondents estimated profits to be higher in six months.
- The percentage of respondents feeling that profits will be the same in six months decreased slightly quarter over quarter from 56.7% in the fall of 2019 to 54.1% in the winter of 2020. This also represents the fifth quarter in a row that respondents rated this area at greater than 50%.
- The percentage of respondents who feel that profits in six months will be lower than today decreased slightly quarter over quarter from 10.0% in the fall of 2019 to 10.3% in the winter of 2020.
Observations on Business Impact Factors (Chart 5)
- In the winter of 2020, 25.3% of respondents viewed increasing types of data 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 third time in seventeen surveys that this issue has been rated as the top concern.
- The percentage of respondents that viewed budgetary constraints as a top business concern decreased in the last quarter, decreasing as a concern by 0.7% from 24.0% in the fall of 2019 to 23.3% in the winter of 2020.
- Increasing data volumes continue to be a great concern for eDiscovery professionals with 18.5% of winter survey respondents viewing data volume challenges as potentially having a substantial impact on business in the next six months. This is a decrease from the previous quarter when this concern was also viewed as the third-highest concern for potentially impacting business in the next six months.
- The impact of a lack of personnel on eDiscovery business performance decreased slightly during the last quarter and is the top concern for 13.0% of survey respondents.
- The percentage of respondents viewing the impact of data security as a top business issue decreased 1.0% from the last quarter and is now viewed as the top concern by 12.3% of survey respondents.
- In the winter of 2020, the impact of inadequate technology as the top business issue decreased by 1.2% from the last quarter and is now viewed as the top concern by 7.5% of survey respondents. This is the lowest rating of this issue as a concern by survey respondents in the winter survey and the fourth quarter in a row that this issue has had the lowest rating in the survey. It is also the fifteenth time in seventeen surveys where the impact of inadequate technology has been the lowest-rated or tied for lowest-rated concern.
(Charts Can Be Expanded for Detailed Viewing)
Chart 1: How would you rate the current general business conditions for eDiscovery in your segment?
Subjective feeling of business performance when compared with business expectations.
Chart 2: How do you think the business conditions will be in your segment six months from now?
Subjective feeling of business performance when compared with business expectations.
Chart 3: How would you guess revenue in your segment of the eDiscovery ecosystem will be six months from now? Revenue is income generated from eDiscovery-related business activities.3-Revenue-Overview+Six-Months-Winter-2020
Chart 4: How would you guess profits in your segment of the eDiscovery ecosystem will be six months from now? Profit is the amount of income remaining after accounting for all expenses, debts, additional revenue streams, and operating costs.4-Profits-Overview+Six-Months-Winter-2020
Chart 5: An Aggregate Overview of Issues Impacting eDiscovery Business Performance Challenges that may directly impact the business performance of your organization.5-Issues-Impacting-eDiscovery-Business-Performance-Winter-2020
Chart 6: Survey Participant Overview6-Survey-Respondents-Winter-2020
Chart 7: Survey Participant Level of Support Overview7-Survey-Respondents-by-Level-of-Support-Winter-2020
Chart 8: Survey Participant Industry Segment Overview8-Survey-Respondents-by-Segment-Winter-2020
Running Listing of Survey Results
- Winter 2020 Survey (28 December 2019 – 11 January 2020)
- Fall 2019 Survey (29 September – 17 October 2019)
- Summer 2019 Survey ( 1 July – 17 July 2019)
- Spring 2019 Survey (1 April – 18 April 2019)
- Winter 2019 Survey (27 December 18 – 10 January 2019)
- Fall 2018 Survey (14 October – 26 October 2018)
- Summer 2018 Survey (4 July – 24 July 2018)
- Spring 2018 Survey (7 April – 20 April 2018)
- Winter 2018 Survey (24 December 17 – 15 January 2018)
- Fall 2017 Survey (5 October – 17 October 2017)
- Summer 2017 Survey (6 July – 31 July 2017)
- Spring 2017 Survey (14 April – 1 May 2017)
- Winter 2017 Survey (20 January – 6 February 2017)
- Fall 2016 Survey (11 October – 1 December 2016)
- Summer 2016 Survey (1 August – 31 August 2016)
- Spring 2016 Survey (1 May – 31 May 2016)
- Winter 2016 Survey (15 February – 29 February 2016)
- Four Eras of eDiscovery? One Approach to Framing Market Growth
- Automating eDiscovery: A Strategic Framework