Litigation Support Market Set to Consolidate
Litigation support has long been a fragmented market: many suppliers and no single one with high market share. A new study suggests this will change. It also finds – and I believe this is related – that most large law firms lack electronic evidence expertise. What’s the study and what’s the connection between findings?
Electronic Discovery in Litigation – EDD Supplier Landscape was released this fall by EDDix, LLC , which provides independent research, analysis and reporting on the Electronic Data Discovery (EDD) marketplace (think Gartner or Meta Group).
EDDix conducted the study via extensive primary and secondary research, including interviewing 15 EDD vendors in-depth. EDDix is making the study available via selected blogs. For background, a free summary, and purchase information, click here.
Two of the study’s findings stike me as particularly interesting:
1. EDD suppliers believe that only 25% of AmLaw 200 firms have the requisite knowledge and experience to handle complex EDD matters professionally.
2. Vendors believe that the market for litigation support services will consolidate. They expect the number of specialty firms to almost double in three years but the number of full-service firms to drop by 40%. Half of the 15 vendors interviewed think there is a 50% or better chance that their company will acquire or be acquired by another EDD player in the next 3 years.
Click here for the EDDIX study findings (note this opens a PDF file in a new window). In my view, these two seemingly unrelated findings are connected.
In the age of paper, lawyers could recover from bad document management decisions by marshaling an army of lawyers or legal assistants to review hundreds of boxes of documents at the 11th hour. That just does not work in the digital age. The volume of documents, the number of file types, the issues around meta-data, and the difficulty of processing data mean that special expertise is required. Moreover, an army of people cannot do much with a bunch of disk drives at the last minute. As the mechanics have changed, so too has awareness of the issues. Lawyers are wising up and realizing they need special expertise.
The finding that 75% of law firms lack expertise is consistent with anecdotes I have heard. I believe that firms will develop this expertise (after all, they pretty much have to) and that this expertise will be centralized. Whether the expertise resides with lawyers or litigation support departments remains to be seen (I have seen examples of both). But either way, the field has become complicated enough that each large firm will need its own experts.
Once lawyers realize specialists are needed and once firms create expert groups, the ground is set to shift: purchasing will move from an individual partner basis to an institutional basis. And once purchasing is institutionalized, there is a tendency to use fewer vendors and give each one more volume. So, in my view, the current lack of know-how will contribute to vendor consolidation.
Stay tuned for additional commentary on these findings.
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