Economic Slump Over for eDiscovery

By Michael
June 8, 2010

After months of miserly spending on technology, it appears that law firms are loosening their purse strings. Legal hours and matters are up 40 percent this year over last and a chief beneficiary of the increase in income at law firms will be eDiscovery technologies, according to a survey conducted by an eDiscovery talent search firm.

Arrow_up Spending for eDiscovery is expected to increase in the next six months, according to a survey by the Cowan Group of senior litigation support and eDiscovery managers and directors at 78 law firms and 47 corporations.

“Dollars are opening up again,” David Cowen, founder and principal of Cowen Intelligence, a unit of the Cowen Group, said in a statement. “Legal technology budgets that have been frozen the past 12-18 months are now thawing.”

That thaw will translate into dividends for e-discovery players, Cowen predicted. “The next three, six and nine months will be very good for everyone with a card to play in the eDiscovery industry,” he forecasted.

While the economic downturn has been rough on legal technology providers and law firms alike, he saw positive developments during the period. “Ironically, a silver lining of the recession is that it forced discipline among all parties to become more fully engaged in the eDiscovery process,” he observed. “Law firms and corporations alike have learned that there is no magic bullet or killer application that will solve all problems.”

It also gave the legal profession more time to learn and understand the technologies and solutions available for eDiscovery, he maintained. “They sat through lots of demos and learned a lot about technology capabilities,” he explained. “So they are asking better and more informed questions than they did previously and this ultimately helps all parties in the process because it ensures accountability.”

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