Top five eDiscovery trends in 2021

Electronic discovery (often referred as eDiscovery) is the act of gathering, examining, conserving, and transferring ESI with the goal of using it as evidence. Given the deluge of data created daily, it is a critical investigative support tool. Without eDiscovery, it would likely take years to go through digital evidence for a single trial or investigation.

In March 2021, EY was named leader in the IDC MarketScape: Worldwide eDiscovery Services 2021 Vendor Assessment^[2]. They highlighted that EY has the global footprint and strategically positioned teams that can handle challenging technical matters. The assessment also highlighted the seamless transition EY has made to fully remote services because of investing in technologies that support remote collaboration.

Being in this position gives us a bird's-eye view of this industry, currently a US$10 billion market globally, and one that most analysts agree will grow at a CAGR of 6-9% till 2025^[3]. This point-of-view discusses how the industry is changing and what clients and service providers can expect in the coming times.

Industry trends

eDiscovery providers add value throughout the process—right from collecting, processing, normalizing, culling and hosting data, to redacting data for cross-border transfer, providing efficient web-based review capability and formatting select electronic records for production. They contend with a steady explosion in data volume and variety, while clients have cost pressures and are constantly looking for cost-effective options.

Here are our top five eDiscovery trends for 2021:

• Organizational data continues to explode, creating risks that need to be managed. Data is ubiquitous, unavoidable and exploding. 2.5 quintillion data bytes were created daily in 2020[4]. This volume of data is hard to manage, and from an eDiscovery standpoint, the storing, cleansing, organizing, sharing and migrating of such voluminous data poses several business, security and privacy risks.
• Data governance challenges and opportunities. Besides voluminous data, what is relevant data is still evolving. For example, videoconferencing related data is now considered discoverable ESI under FRCP 34(a)(1). Most countries now have data protection laws and guidance that give consumers rights over personal data that companies have. There is now an even greater need to invest in sound data governance strategies that can reduce regulatory compliance risk, increase operational efficiency and establish a competitive advantage.
• Keeping data secure from a third-party standpoint. Most organizations handle sensitive data, whether it is intellectual property (IP), or customers and supplier details. Companies might keep data secure within their network, but what safeguard measures are being taken by the company and third parties (including those working eDiscovery and legal document review), to protect that data? In such cases, the ability to discover and classify any regulated and Personally Identifiable Information (PII) data stored throughout the company can help in taking remedial actions. eDiscovery is based on timely access by third parties to relevant data—and this needs to be balanced with safeguards against cyber and privacy risks.
• Cost pressures on legal teams leading to cost pressures on providers. Given the steady volume of litigations and lawsuits, and the rising costs associated with eDiscovery, companies are putting pressure on general counsels to reduce spending. Legal teams are exploring providers who can save costs by cloud archiving data, consolidating data into a single repository and offer Robotic Process Automation (RPA) capabilities to reduce time, save costs, and provide greater accuracy.
• Alternative delivery models – moving from capital expenditure to operating expenditure. Budgets are stretched and chief financial officers (CFO) are increasingly preferring operating expenditure models. Options like software as a service (SaaS) platforms are more cost effective, flexible and offer far better scalability, which is something that can help general counsels manage the above cost pressures. There is also a growing acceptance for and need for managed services—where a combination of exceptional talent, technology and processes are used to deliver long term value.