Thu. Dec 1st, 2022

    Market Review

    This Section of the Guide looks provides a historical review of the marketplace in two main areas. First a review of the overall evolution of the technology and second a more UK-specific analysis of the changes in specific technological areas.


    NOTE: What’s this Section about?
    This section gives the background to the differences between the types of software providers. If you are happy accepting that some are “pears” and some are “apples” then go to Section 5.3. If you just want a list of the main software products go to the Vendor Analysis section.

    Historical Market Review – Overall #

    The litigation support market is a maturing one, both in terms of the software products and the firms that provide them. The evolution of the software is best tracked by looking at a technology conference/exhibition called LegalTech that takes place in New York in January/February of each year. The author has been attending the exhibition for many years, and since 2008 produces an annual review of proceedings. The following summary is based on knowledge gained during those years as well as practical experience of different products. The summaries for the past 5 years only are shown below.

    2017/18

    This year’s LegalTech saw a shift in emphasis in the supplier booths for the first time in many year’s with a whole host of fledgling companies offering contract review using some form of AI/Machine learning. It will be interesting to see if any of this bleeds through into the eDisclosure world.

    The pace of market consolidation slowed during 2017, though in September OpenText continued its acquisitions with the purchase of the forensic collection software company Guidance. Morae Legal and Clutch Group announced a merger, and Xact Data Discovery, Lighthouse and Advanced Discovery each acquired competitor e-discovery groups, and Inventus purchased Unified.

    In a flurry of news in March 2018, Consilio and Advanced Discovery announced they were merging, to form the second-largest eDiscovery company behind Epiq, whilst CloudNine bought all of the Lexis Nexis eDiscovery toolset; including Concordance and Law. It will be interesting to see how these mergers and acquisitions pan out during the rest of the year.

    2018/19

    The consolidation of the eDisclosure marketplace continued with a spate of US mergers, with the most interesting being the Jan 2019 acquisition of Catalyst by OpenText, with plans to enhance and continue investing in all product lines. In Sep 2018 Nuix bought Ringtail software from FTI Consulting, thus giving them an “end-to-end” functionality capability across the EDRM model. In Oct 2018 Consilio acquired DiscoverReady further consolidating the US marketplace.

    As far as the UK was concerned, the interesting news in the eDisclosure area, was the moves by both CS DISCO and Everlaw into the marketplace, mainly in competition with Relativity. Both now have UK offices, employees and clients. The depth and range of “not-Relativity” alternatives continues to develop.

    2019/20

    Towards the end of 2019, Nuix renamed the Ringtail element of their software to Nuix Discover and started to show the results of their investment into the R&D for the product. The rate of consolidation slowed down, in the UK mainly as there are very few companies left to purchase. There were some mergers, as Legility bought Inventus in early January 2020, alongside further investments by venture capital into the emerging software players such as Everlaw and iCONECT.

    There was continued speculation about what software will be the dominant player in the years to come, best summarised in this article by Rob Robinson, proposing that the next era will belong to an (as yet to be identified) application that is simply “Not Relativity”. That being said Relativity with its amazing ecosystem of training and certification continues to be the market leader.

    2020/21

    No review of the year would be complete without some reflection on the “winners and losers” due to COVID 19. The winners were undoubtedly the providers of eBundling and courtroom support systems who saw demand for their services rocket as the court system in England and Wales embraced remote hearings. The losers were the providers of more traditional eDisclosure software as demand went on pause. There was a focus on new data formats as lockdown turbo-boosted use of alternative communications links such as Teams / What’s App/ Zoom / etc.

    There were continued investments during 2020 by venture capital into both DISCO ($40M) and Everlaw ($62M). These were upstaged by the announcement in March 2021 that Relativity had reached an agreement with Silver Lake (an existing investor in the firm) for an investment to support and accelerate Relativity’s growth in cloud-based eDiscovery, AI, and communication surveillance. The size of the investment wasn’t announced but the deals values the company at $3.6 Billion.

    Xact Data Discovery (XDD) went on a bit of an acquisition spree, snapping up RVM and LightSpeed in July, and the UK-based Anexsys in August. Also in August Reveal obtained NexLP and the UK courtroom support software company CaseLines was purchased by Thomson Reuters. Then in January 2021 Reveal obtained Brainspace, with the avowed intent of using the kickstart from both NexLP and Brainspace to turbocharge their eponymous Reveal software so it could seriously challenge Relativity.

    At the end of the year Nuix was floated on the Australian stock market, and in early 2021, Relativity bought VerQu for its technology that focuses on processing various social media formats such as Teams, What’s App, et al.

    Then in April 2021, Consilio and XDD announced a merger, further consolidating Consilio’s position as the largest supplier of eDisclosure services in the world.

    2021/22

    As we moved into 2022, there was a slow re-emergence of in-person conferences, with Legal Week (the newer version of LegalTech) finally taking place in March of 2022, the month it will also run in during 2023. The increase in firms offering AI-assisted contract review continues, alongside the perennial merger activity, of which more in a minute. One trend that has started to appear in eDisclosure collection is the rise of applications (such as Signal and Telegram) being used as communications channels. What differentiates these products, particularly Signal, is that it is impossible to collect messages from them, reducing data gathering to a collection of screen shots. As people become more security conscious, and as hybrid working rises in popularity, we could be facing scenarios where the volume of available data starts to fall as people deliberately chose applications that keep their conversations private.

    On the mergers front Consilio continued on its upwards and onwards path with the acquisition in Oct 21 of the Legal Consulting and eDiscovery business units from Special Counsel and in Dec 21 the absorption of Legility (who had previously taken over Inventus, incorporating Unified). As you will see from the list of suppliers in Chapter 8 there are not many UK owned/based eDisclosure suppliers left in the marketplace.

    One of those (though more EU based) who went was Zylab, who were bought by IPRO in Jul 21. Relativity continued on its strategic growth plan with the takeover of Text IQ in May 21, and in Nov 21 Everlaw secured a further round of $202M Series D funding.

    Historical Market Review – Litigation Support Products #



    To understand the differences between software products, it is necessary to look a little at the history of their development and they grew to meet different challenges at different time.

    Initially litigation support tools were about dealing with scanned images of paper as this was the requirement in the 90’s. The tools, such as Concordance and Summation, were basic search and review environments with additional products providing the ability to look at the images. The software evolved rapidly and a new generation of vendors appeared, with Ringtail and Steelpoint (which became IntroSpect) as the leaders in this area by the time you come into 2000 / 2001. They were still based on handling large volumes of images and struggled initially as the explosion of electronically stored information (ESI) hit them. Products emerged such as Kroll Ontrack’s Electronic Data Review (which became Ontrack Inview and in 2013 ediscovery.com Review), Epiq’s DocuMatrix and a host of others, most of which withered, or were bought out over the years. In a reflection of the struggle going on now between more “traditional” litigation support tools and their ECA brethren, so the products initially based on images and those on ESI mimicked each other’s abilities, bought out software upgrades and eventually became a more homogeneous and mature market place.

    The more recent products coming to the market have learnt from existing offerings and taken the best of the functionality, but wrapped it in a far more accessible interface. This used to the main differentiator between products, on the one hand you had Ontrack Inview, DocuMatrix and Ringtail, on the other were newer tools such as Relativity, cicayda and Viewpoint that had a far more “Outlook” type look and feel. Now, the interfaces are very similar, with a corresponding similarity in the function suite that is the “entry level” into the market.

    Historical Market Review – ECA Products #

    The genesis of ECA was the explosion in volumes of disclosable material brought about by electronically stored information (ESI), a shorthand acronym for emails, Word, Excel, PowerPoint, PDF’s and all the other data that organisations and individuals produce. The main concept underpinning ECA is that the software groups items of ESI together by virtue of data analytics of their contents and metadata. The initial product in this area was called Attenex (now an integrated component of FTI Consulting’s Ringtail product), with the name itself meant to be “At ten times”, an indication of the increase in review speed you could obtain by using the product. Over the years other products have appeared, elements of ECA have been grafted into the main litigation support products and the capabilities of the offerings have expanded, with the cost also dropping exponentially. When Attenex first appeared it had a charging model of £2,000 per GB, now ECA can be accomplished for tens of pounds per GB.

    One of the other key players in this market used to be the UK based firm Autonomy. They (like Recommind) come to the arena of litigation support from a background of enterprise searching and knowledge management. Recommind realised they almost had a litigation support tool in their product and added functionality to make it work. Autonomy first bought IntroSpect to give themselves a litigation support product and re-built it around their IDOL search engine. Then they purchased iManage to give themselves a document management offering. In terms of market focus, Autonomy (more so than Recommind) was pushing for domination in the corporate environment where the three overlapping areas of Litigation Readiness (IntroSpect), Knowledge management (IDOL) and document management (iManage) exist. However the events of Autumn 2012, when HP accused Autonomy of false accounting during the takeover of Autonomy by HP means that this entire product range was under a cloud for some time. As at the date of this version of the guide, that cloud has lifted and HP are once again strongly selling Autonomy, though mainly into the Information Governance area, rather than litigation support.

    The most significant current thing in the ECA world, is that it seems to have firmly breeched the corporate firewall. By this I mean that the software runs inside a corporate environment and, when required, can by issue legal holds and then incorporate these into a focused search on “held” material to identify the data that needed to be processed further. Though the whole Legal Hold concept didn’t really apply in the UK, there will be some clients in litigious marketplaces that this would be of interest to. Also the UK Bribery Act is providing an impetus for organisations to look again as to how they manage their electronic information. In this area, products from eDiscovery tools, and Recommind are mentioned as ones to watch.

    For the moment, the focus for the UK is on the ECA tools that mainly operate outside the end client’s environment. In practice this has tended to mean one of three products, Veritas eDiscovery Platform, Nuix or Digital Reef, with (up to now) only the first two really having success. It seems that lawyers prefer Veritas eDiscovery Platform to Nuix because of its interface and seemingly better functionality, Technology departments chose the speed and performance of Nuix, over what they consider to be its slightly flashier competitor. The Recommind product range incorporates both ECA and standard litigation support tools, as does Relativity with its Processor and Review offerings, Lateral Data’s Viewpoint. Nuix’s purchase of Ringtail in late 2018 gave it end to end capability.

    Historical Market Review – Predictive Coding Products #

    The phrase “Predictive Coding” is shorthand for any process that uses computing power and software algorithms to try and carry out coding of electronic documents. On one level the machine can carry out objective coding and scan the document for the data it can “recognise” to give you the From, To, Title, Date kind of material. So far so good. Next you get the programs that will “search” the document and highlight the terms that it thinks means the document should be relevant and even highly subjective calls such as Privilege.

    However there are caveats. The software will only really work on fully electronic material, so you cannot get the same results on the OCR of images of scanned documents. Second, most products require the user to “seed” the review work with appropriate documents that have been reviewed by a human (normally senior) lawyer, so it is not a silver bullet that will solve all your problems. Finally, no one is (yet) suggesting that the relevance and privilege reviews are totally done by the computer, the software puts forward documents that meet criteria and asks humans to validate its choices.

    What is significant, is that the documents that are not selected, are never looked at. Yet this in itself, ties into the UK approach to proportionality. To paraphrase the UK approach, there might indeed be a slight chance that a “smoking gun” exists in the far reaches of the potentially disclosable material, however, it can be far too expensive to review everything and so that faint possibility must not be allowed to drive the review strategy.

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