Here in the US, it’s a time for new beginnings. Not only that, it’s time for the Winter 2021 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 continued to rebound from the COVID-19 doldrums that have influenced survey results recently? 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 compare results to the averages for all twenty-one(!) surveys to date, from January 2016 to present. These surveys began when Obama was still president! However, with so many surveys, I’ve decided to change the graphs to a rolling four years’ data for clarity. It’s also worth noting that this is the fourth time the survey has been conducted during the current pandemic.
The Winter 2021 survey response period was initiated on January 3, 2021, and continued until January 12, 2021. This quarter’s survey experienced a solid response rate with 60 eDiscovery professionals sharing their opinions on the business of eDiscovery. Here we go!
This Survey is Even More Law Firm Influenced: For the third time in the past four quarters, Law Firm respondents were the top group with an even larger record 41.7% of all respondents (10.5 % more than the lifetime average). Software and/or Services Provider respondents remained at second with 28.3% of all respondents (7% lower than the lifetime average of 35.3%). Consultancy remained third at 13.3% (which is 4.4% below the 17.7% lifetime average). And Corporation respondents were tied for fourth at 5%, lower than the lifetime average of 7.7%. If you count law firms as providers (they’re technically both providers and consumers), providers account for 83.3% of total respondents, a higher percentage than the last survey by about 6%. Here’s a graphical representation of the trend over the last sixteen surveys:
So, how confident is a law firm influenced group of respondents in eDiscovery business confidence? See below.
Optimism Coming to Fruition?: This quarter, we saw a 4.7 point rise to 43.3% of respondents that considered business to be good, which is below the average of all surveys (50.9%) by 7.6%, but the highest number since the pandemic began. 41.7% of respondents also consider business to be normal, which 3.1% higher than the lifetime average of 38.6% and also represents a gain of 3.1% from last quarter. The number of respondents that rated business conditions as bad dropped to 15.0% which is above the lifetime average of 10.4%, but still the lowest number since the pandemic began. Certainly, this is a step in the right direction! Here is the trend over the last sixteen surveys:
So, do respondents expect business to continue to rise in six months? See below.
There More Optimism Down the Road as Well: Most respondents (95%) expect business conditions will be in their segment to be the same or better six months from now, with a higher upside and a higher same, which caused the percentage of those expecting business to be worse to drop from 10.8% down to just 5%. For expected revenues, the number of respondents that expected the same or better on revenues stayed essentially the same (down .1 to 86.7%), but with a larger percentage expecting higher revenues (a 9.5% increase). 13.3% of respondents expected lower revenues (the same as last quarter). As for profits, respondents expecting higher profits grew to 41.7% (5.6% higher than last quarter and the highest number since the pandemic began) and the expectation on lower profits dropped to 15.0% (still 1.9% larger than the average, but the lowest since the pandemic began). So, it appears that optimism is holding steady for six months down the road. Here is the profits trend over the last sixteen surveys:
Will the optimistic trend continue next quarter? We’ll see.
Even Less Respondents Identified Budgetary Constraints as the Most Impactful Factor: After being selected by a majority (or nearly a majority) of respondents as the most impactful factor over the next six months, Budgetary Constraints dropped to 43.3% of the respondents as being most impactful, a 6.1% drop (but still 14.5% above average). Increasing Volumes of Data was second at 18.3% (3.5% below the lifetime average) and Increasing Types of Data was third at 16.7%, just above the lifetime average of 16.5%. Data Security was fourth at 13.3% (which is almost identical to the lifetime average of 13.2%), Lack of Personnel fell from fourth to fifth at 5.0% (seven percent lower than its lifetime average of 12.0%) and Inadequate Technology (once again) brought up the rear at 3.3% (4.5% lower than the lifetime average of 7.8%). While eDiscovery budgets continue to be influenced by the COVID-19 pandemic, that influence appears to be lessening a bit. The graph below illustrates the distribution over the last sixteen surveys:
A slightly more normal distribution, but still budget is the biggest impact by far.
Perhaps, it’s the Executives Who Are More Optimistic?: Executive Leadership respondents emerged this time as the top group at 45.0% (6.1% over the lifetime average of 38.9% and the highest percentage since Summer 2018). Operational Management respondents were second at 36.7% (4.3% above the lifetime average of 32.4%. And, Tactical Execution respondents dropped from the top group to the lowest group this time at 18.3% (10.4 points lower than the lifetime average of 28.7%). Here’s the breakdown over the last sixteen surveys:
So, this level of optimism is certainly felt at the top and middle – we’ll see if it extends to the rank and file in the future.
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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