It’s time for the Winter 2023 eDiscovery Business Confidence Survey, published (as always) on Rob Robinson’s terrific Complex Discovery site.  Where does the confidence of individuals working in the eDiscovery ecosystem stand when compared to previous surveys?  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, which is now starting its eighth year! While I’m continuing to look at all surveys conducted to look at trends over time, I’m displaying a rolling three years’ data for clarity as the entire history of more than seven years makes for a very crowded graph.

The Winter 2023 eDiscovery Business Confidence Survey response period was initiated on January 22, 2023, and continued until January 27, 2023. This quarter’s survey experienced a strong response rate with 65 eDiscovery professionals sharing their opinions on the business of eDiscovery – in only five days!  So, let’s get into it!

Law Firms at the Top: Law Firm respondents were the leading group this time with 33.8% (3.0% above the lifetime average), the second time in the past year where law firms led (with a tie for first one other time). Software and/or Services Provider respondents were a distant second at 18.5% (the lowest percentage ever and 16.8% below the lifetime average). What group was third? Other at 16.9%, which I haven’t even bothered to track each quarter because they’ve been so low! Consultancy stayed at fourth at 13.8% (2.9% below the 16.7% lifetime average). If you count law firms as providers (they’re technically both providers and consumers), providers account for 66.1% of total respondents (the lowest ever for the second straight quarter!). Corporation respondents were fifth at 12.3%, 4.1% higher than the lifetime average of 8.2%.  Here’s a graphical representation of the trend over the last twelve surveys:

So, how confident is a law firm influenced group of respondents in eDiscovery business confidence in the Winter 2023 eDiscovery Business Confidence Survey?  See below.

Current Business Hits the Middle of the Road: This quarter, we saw a massive 19.1-point drop off from last quarter to 36.9% of respondents that considered business to be good (the lowest since Spring 2020 when the pandemic hit and the second lowest ever). That’s below the average of all surveys (53.0%) by 16.1%. A whopping 56.9% of respondents consider business to be normal, leaving 6.2% of respondents that rated business conditions as bad (below the lifetime average of 9.2%). Here is the trend over the last twelve surveys:

So, do respondents in the Winter 2023 eDiscovery Business Confidence Survey expect business to continue to rise in six months?  See below.

Optimism is Muted, To Say the Least: Most respondents (93.8%) expect business conditions will be in their segment to be the same or better six months from now, but only 29.2% expect business to be better while 64.6% expect it to be the same. For expected revenues, the number of respondents that expected the same or better on revenues was lower than last quarter at 89.2%, but with a big drop of 16.7% for those expecting higher revenues (32.3% compared to 49.0 last quarter). As for profits, respondents expecting higher profits dropped 6.9% to 23.1% (which is 16.4% lower than the lifetime average of 39.5% and the lowest ever – even the start of the pandemic didn’t drop that low), while almost two-thirds of respondents (64.6%) expected flat profits and 12.3% expected lower profits (1.0% higher than the average).  Here is the profits trend over the last twelve surveys:

Will respondents be more optimistic next quarter?  We’ll see.

Budgets Are Getting Tight Again: Budgetary Constraints moved back to the top spot at 32.3%, which is 5.8% above the lifetime average of 26.5% and the first time alone at the top spot in nearly two years. Increasing Volumes of Data was second with 20.0% (0.7% lower than the lifetime average). Increasing Types of Data was third with 18.7% (1.7% abode than the lifetime average). Data Security was fourth at 15.4% (which is 3.0% above the lifetime average of 12.4%). Lack of Personnel (4.9% below its lifetime average of 14.1% and 26% lower than last Winter’s 35.2%) and Inadequate Technology (1.7% higher than the lifetime average of 7.5%) tied for last at 9.2%. The graph below illustrates the distribution over the last twelve surveys:

What happens when business slows? Budgets get tight. Let’s see how long it lasts.

Flip-Flop at the Top: Tactical Execution respondents grabbed the top spot for the first time since Summer 2020 at 41.5% (13.2% higher than average and the highest percentage ever). Operational Management stayed at second at 30.8% (1.8% below the lifetime average of 32.6%. And Executive Leadership respondents fell to the lowest group for the first time since Spring 2020 at 27.7% (11.4% below the lifetime average of 39.1%). Here’s the breakdown over the last twelve surveys:

In short, the Winter 2023 eDiscovery Business Confidence Survey reflects a more pessimistic sentiment from a law firm/rank and file influenced group. Is this the start of a trend? Check back here next quarter!

Again, Rob has published the results for the Winter 2023 eDiscovery Business Confidence Survey on his site here, which shows responses to additional questions not referenced here.  Check them out.

So, what do you think?  Are you optimistic about eDiscovery business?  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.