Article by Rob Robinson
The Business of eDiscovery in the Spring of 2019
The eDiscovery Business Confidence Survey is a non-scientific 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.
Initiated in January 2016, to date the survey has been administered fourteen times with 1,448 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 spring of 2019 and had 180 respondents in roles that included executive leadership (24.4%), operational management (36.1%), and tactical execution (39.4%).
Based on the aggregate results of fourteen surveys, the following findings and charted overviews of responses may be helpful in understanding the collective mindset of many industry experts regarding the ongoing business conditions of the eDiscovery ecosystem.
Eighteen Survey Observations
Observations on Business Conditions (Charts 1-4)
Business Climate (Chart 1 and 2)
- Just under 94% (93.3%) of eDiscovery Business Confidence Survey respondents feel the current business conditions are good or normal in the spring of 2019. This combined confidence level represents a solid increase in these same feelings when compared to the winter of 2019 where 89.3% felt the conditions were good or normal.
- Less than half of survey respondents (41.1%) characterized the current business climate as good. This represents a significant decrease from 53.3% of respondents who viewed the business climate as good in the winter of 2018. This is also the lowest rating in this area since the inception of the survey and the drop appears to represent a solid, yet slowly diminishing optimism in the current general business climate for eDiscovery.
- Only 6.7% of respondents classified the current business condition as bad. This represents a solid decrease of 4% in this area over the last quarter.
- Only 40% of survey respondents feel that business climate conditions will be better in six months. This is a substantial decrease from the 52% who felt the same way about future conditions in the winter 2019 survey and the change may be another indicator of a solid, yet diminishing optimism in future business conditions. It is also tied for the lowest rating (40% in winter 2017) in this area since the inception of the survey.
- The number of survey respondents feeling the business conditions will remain the same in six months approached 60% (57.8%). This is the highest rating in this area since the inception of the survey and the highest rating since the winter of 2017.
- The number of respondents expecting the business climate of eDiscovery to be worse in six months decreased quarter over quarter from 4% in the winter of 2019 to only 2.2% in the spring of 2019. This is the lowest rating in this area since the inception of the survey.
Revenue Expectations (Chart 3)
- In the spring of 2019, only 41.7% of survey respondents feel that revenue in the next sixth months will be higher than today. This percentage is almost the same as feelings on this metric in the winter of 2019 (41.3%) and represents the second lowest rating for this metric since the inception of the survey.
- However, more than half of the survey respondents (52.2%) feel that revenue in the next six months will remain the same. This is the highest response rate for this metric since the inception of the survey. It is also the second time in a row that this response has exceeded 50%.
- The percentage of respondents who feel that revenue in six months will be lower in six months than they are today decreased from 8% in the winter of 2019 to 6.1% in the spring of 2019.
Profit Expectations (Chart 4)
- Slightly more than one-third of survey respondents (34.4%) feel that profits will be higher in six months than they are today. This is a solid increase from the winter of 2019 where only 28% of respondents estimated profits to be higher in six months. However, it is still the second lowest response rate for this metric since the inception of the survey, only exceeded by last quarter’s results.
- Respondents feel that profits will be the same in six months decreased significantly quarter over quarter from 65.3% in the winter of 2019 to 55.6% in the spring of 2019. This represents the second highest response rate for this metric since the inception of the survey, only exceeded by last quarter’s results.
- The number of respondents who feel that profits in six months will be lower than today increased quarter over quarter from 6.7% in the winter of 2019 to 10% in the spring of 2019.
Observations on Business Impact Factors (Chart 5)
- The impact of increasing volumes of data on eDiscovery business performance was reported as the number one concern by 25% of survey respondents in the spring of 2019. This was the highest response rate for any of the present business impact factors and represents an increase in concern quarter over quarter, increasing from a 21.3% response rate in winter of 2019. Additionally, increasing volumes of data has been noted as the top concern for respondents in six of fourteen quarterly surveys to date.
- Budgetary constraints continue to be a strong concern for eDiscovery professionals with 20.6% of survey respondents viewing budgetary constraint challenges as potentially having a substantial potential impact on business in the next six months. While decreasing slightly as a concern over the last quarter, budgetary constraint impact has been noted as a top concern for respondents in seven of the fourteen quarterly surveys.
- The percentage of respondents viewing the impact of increasing types of data as a top business issue remained almost the same for the second quarter in a row and is now viewed as the top concern by 18.9% of spring 2019 survey respondents.
- The percentage of respondents viewing the impact of data security as a top business issue increased 3% from the winter of 2019 survey and is now viewed as the top concern by 15% of survey respondents.
- The impact of a lack of personnel on eDiscovery business performance remained almost the same during the last quarter and is now the top concern for 12.2% of survey respondents.
- In the spring of 2019, the impact of inadequate technology on eDiscovery business performance was rated as a top concern by only 8.3% of survey respondents. This represents a 5% drop over winter 2019 survey responses and represents the twelfth time in fourteen surveys that this issue been the lowest or tied for the lowest concern by survey respondents.
(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.Revenue Overview + Six Months
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.Profits Overview + Six Months
Chart 5: An Aggregate Overview of Issues Impacting eDiscovery Business Performance Challenges that may directly impact the business performance of your organization.Issues Impacting eDiscovery Business Performance
Chart 6: Survey Participant OverviewSurvey Respondents (Individual and Aggregate Overview)
Chart 7: Survey Participant Level of Support OverviewSurvey Respondents by Level of Support
Running Listing of Survey Results
- 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)