Is Business Confidence Optimism Set Up for a “Fall”?: eDiscovery Trends

Fall is here!  Which means it’s time for the Fall 2020 eDiscovery Business Confidence Survey, published (as always) on Rob Robinson’s terrific Complex Discovery site.  So, has the confidence of individuals working in the eDiscovery ecosystem in the business of eDiscovery rebounded from the doldrums from last quarter’s COVID-19 influenced survey results?  Let’s see.

As always, Rob provides a complete breakdown of the latest survey results, which you can check out 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 twenty(!) surveys to date, from January 2016 to present.  I’m also continuing to look at some of the numbers compared to their averages over all nineteen surveys as additional historical comparison.  It’s worth noting that this is also the third time the survey has been conducted during the current pandemic.

The Fall 2020 survey response period was initiated on September 21, 2020, and continued until October 1, 2020.  This quarter’s survey experienced a solid response rate with 83 eDiscovery professionals sharing their opinions on the business of eDiscovery.

This Survey is Law Firm Influenced: For the second time in the past three quarters, Law Firm respondents were the top group with a record 37.3% of all respondents (5.4 % more than the lifetime average).  Software and/or Services Provider respondents were back to second with 25.3% of all respondents (over 10% lower than the lifetime average of 35.6%).  Consultancy remained third at 14.5% (which is over 3.3% below the 17.8% lifetime average).  And Corporation respondents were fourth at 12%, considerably higher than the lifetime average of 8%. If you count law firms as providers (they’re technically both providers and consumers), providers account for 77.1% of total respondents, a similar percentage to the last two surveys.  Here’s a graphical representation of the trend over the twenty surveys to date:

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So, how confident is a law firm influenced group of respondents in eDiscovery business confidence?  See below.

Not Much Change From Last Quarter’s Numbers: This quarter, we saw a 1.4 point drop to 38.6% of respondents that considered business to be good, which is the second lowest number ever (the three lowest have been the last three quarters).  It’s also below the average of all surveys (51.3%) by almost 13%.  38.6% of respondents also consider business to be normal, which is very close to the lifetime average of 38.5% and represents a gain of 2.6% from last quarter.  But, 22.9% of respondents rated business conditions as bad, which is the third highest percentage ever (again, all three highest percentages are in the last three quarters) and still WAY above the lifetime average of 10.2%.  Needless to say, COVID-19 continues to keep business confidence in the industry low, at least compared to historical numbers before the pandemic.  Here is the trend over the twenty surveys to date:

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So, how do respondents expect COVID-19 to continue to impact business in six months?  See below.

There is Still Optimism Down the Road: Most respondents (89.2%) expect business conditions will be in their segment to be the same or better six months from now, with a slightly higher upside but a lower same, which caused the percentage of those expecting business to be worse to rise from 4% back up to 10.8%.   There were similar results on expected revenues with a drop of nearly 5 percent of respondents that expected the same or better on revenues (down to 86.8%), with 13.3% expecting lower revenues (a 1.3% rise).  The expectation on lower profits stayed about the same at 16.9% (still 3.9% larger than the average (while the higher profit expectation of 36.1% is only 3% lower than the average).  So, it appears that optimism is holding steady for six months down the road.  Here is the profits trend over the twenty surveys to date:

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Will the optimistic trend continue next quarter?  We’ll see.

Almost a Majority of Respondents Identified Budgetary Constraints as the Most Impactful Factor: After the last two times being selected by a majority of respondents as the most impactful factor over the next six months, Budgetary Constraints just missed a majority again at 49.4% of the respondents as being most impactful (21.3% above average).  Increasing Types of Data was second at 18.1% (1.6% above the lifetime average) and Increasing Volumes of Data was third at 12%, nearly ten percent lower than the lifetime average of 21.9%. Lack of Personnel was fourth at 8.4% (which is nearly four percent below its lifetime average), Data Security fell from fourth to fifth at 7.2% (over six percent lower than its lifetime average of 13.2%) and Inadequate Technology (once again) brought up the rear at 4.8% (over three percent lower than the lifetime average of 8%).  Certainly, eDiscovery budgets continue to be influenced by the COVID-19 pandemic.  The graph below illustrates the distribution over the twenty surveys to date:

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A slightly more normal distribution, but still budget is the biggest impact by far.

Once Again, Rank and File Rules This Survey: Tactical Execution respondents were again the top group at 39.8% (exactly ten points over the lifetime average).  Executive Leadership respondents were second at 34.9% (nearly 4 points below the lifetime average of 38.4%.  And, Operational Management respondents were the lowest group this time at 25.3% (6.5 points lower than the lifetime average of 31.8%).  Here’s the breakdown over the twenty surveys to date:

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So, this relativity even distribution continues to illustrate that any impact from 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, my partners 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.

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