If you’ve followed my blog over the years, you know that I’m a big fan of Rob Robinson’s terrific Complex Discovery site, which has been a terrific resource for all things eDiscovery (including surveys, compilations, mergers and acquisitions and, of course, articles). So, it should be no surprise that I’m here to cover the results of the Spring 2020 eDiscovery Business Confidence Survey, published (as always) on his site. So, how has the COVID-19 pandemic affected the confidence of individuals working in the eDiscovery ecosystem in the business of eDiscovery? Let’s see.
As always, Rob provides a complete breakdown of the latest survey results, which you can check out here, as well as his observations here. I’ve covered every quarterly survey since its inception and, as I’ve done for a couple of years now, I will provide some analysis and I’m continuing to take a look at all surveys conducted to look at trends over time. So, this time, I will look at the results for all eighteen(!) surveys to date, from January 2016 to present (pretty soon, I’m going to need a bigger boat, er, screen). I’m also continuing to look at some of the numbers compared to their averages over all eighteen surveys as additional historical comparison.
Important Note: My new blog alignment doesn’t display the historical comparison graphics very large (at least as set up presently – working the kinks out), but you can right click on each image and Open Image in New Tab to see it full sized. Pardon my dust!
The Spring 2020 survey response period was initiated on April 2, 2020 and continued until the registration of 172 responses last Wednesday. Another high number of participants, thanks in part to support and promotion from both EDRM and ACEDS.
Law Firms, Not Software and/or Services Providers Lead the Way: For only the third time ever, Software and/or Services Provider respondents was NOT the top group. Law Firm respondents were the top group with 36.6% of all respondents, the highest percentage ever and almost six percent higher than average for the eighteen surveys (30.7% average over that time). Software and/or Services Provider respondents were second at 29.1% of all respondents (over seven percent lower than the lifetime average of 36.3%). Consultancy remained third at 16.9% (about one percent below than the 18.0% lifetime average). And Corporation respondents were fourth at 9.9%, higher than the lifetime average of 7.5%. If you count law firms as providers (they’re technically both providers and consumers), providers account for 82.6% of total respondents, a similar percentage to the last survey. Here’s a graphical representation of the trend over the eighteen surveys to date (right click on each image and Open Image in New Tab to see it full sized):
So, how confident is a highly law firm influenced group of respondents in eDiscovery business confidence? See below.
Nearly a Third of Respondents Consider Business to Be BAD: Well, here is the first indication of the impact of COVID-19. This quarter, we saw a 22.7 point drop (dare I say plummet?) to 27.3% of respondents that considered business to be good, the lowest number ever by almost 14 percent! It’s also below the average of all surveys (52.8%) by 25.5%. Ouch! 41.3% of respondents consider business to be normal, which is above the lifetime average of 38.5% and just about the same as last quarter. But, 31.4% of respondents rated business conditions as bad, which is the highest percentage ever by almost 18 percent and 22.7 points above the lifetime average of 8.7%. Needless to say, COVID-19 has clearly reduced business confidence in the industry, based on these numbers. Here is the trend over the eighteen surveys to date (right click on each image and Open Image in New Tab to see it full sized):
So, do respondents expect COVID-19 to continue to impact business in six months? See below.
Yes, a Majority of Respondents Once Again Expect Business to be the Same or Better Six Months From Now, But…: While most respondents (77.3%) expect business conditions will be in their segment to be the same or better six months from now, that percentage is a full ten percent less than last quarter. Also, the percentage of those expecting business to be better was only 37.8%, while those expecting business to be the same was 39.5%. Those expecting worse business conditions rose twenty percent to 22.7%. However, less than two-thirds of respondents also expected the same or better on revenues (only 65.7%), with 34.3% expecting lower revenues. And, the expectation on lower profits was even larger at 35.5%, over eighteen percent larger than the previous high number and 22.8% larger than the average (while the higher profit expectation of 25% is a new low by three percent and 14.7% lower than the average). So, it appears that at least a third of respondents expect the impact of COVID-19 to continue for at least six months. Here is the profits trend over the eighteen surveys to date (right click on each image and Open Image in New Tab to see it full sized):
Will a significant percentage of respondents maintain their pessimism in the future? We’ll see.
A First! A Majority of Respondents Identified Budgetary Constraints as the Most Impactful Factor: Gee, you think? For the first time ever, one of the factors – Budgetary Constraints – was selected by a majority (51.2%) of the respondents as being most impactful over the next six months, 25.7% above average. The previous high for any factor ever was 33.6%. Increasing Volumes of Data was second at 16.3%, nearly seven percent lower than the lifetime survey average of 23.2%. Lack of Personnel was third at 11.0% (which is nearly two percent below its lifetime average), Increasing Types of Data fell all the way from first to tied for fourth at 8.1% (nearly eight percent lower than its lifetime average of 16%), Data Security was also tied for fourth at 8.1% (lifetime average 13.9%) and Inadequate Technology (once again) brought up the rear at 5.2%. Needless to say, a lot of eDiscovery budgets are reduced or even on hold due to COVID-19. The graph below illustrates the distribution over the eighteen surveys to date (right click on each image and Open Image in New Tab to see it full sized):
It will be interesting to see whether we see a return to a more normal distribution next quarter or if Budgetary Constraints continues by far to be the most impactful impact.
Distribution of Respondents is Once Again Reasonably Even: Well, at least one category is reasonably normal! Tactical Execution respondents were the top group at 36.0% (7.7 points over the lifetime average of 28.3%), Operational Management respondents were second at 35.5% (3.4 points over the lifetime average of 32.1%) and Executive Leadership respondents were last again at 28.5%, (11 points lower than the lifetime average of 39.5%). Here’s the breakdown over the eighteen surveys to date (right click on each image and Open Image in New Tab to see it full sized):
So, this relatively even distribution illustrates that the impact of COVID-19 is felt throughout the ranks.
Again, Rob has published the results on his site here, which shows responses to additional questions not referenced here. Check them out.
So, what do you think? Is COVID-19 impacting your confidence in the business of eDiscovery? Please share any comments you might have or if you’d like to know more about a particular topic.
Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.