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eDiscovery Spending on the Rise in 2010

by on December 10, 2009

eDiscovery Survey Spending by organizations to comply with electronically stored information (ESI) regulations stemming from lawsuits and regulatory probes has risen this past year and will continue to rise in 2010, according to a new study.


The survey of executives at Fortune 2000 companies and government agencies revealed that 80 percent of the respondents said their eDiscovery spending increased in 2009 compared to 2008. The research, sponsored by Clearwell Systems and supported by the Enterprise Strategy Group , also showed that for a third of those surveyed, eDiscovery spending jumped, year-over-year, 20 percent. That’s likely to continue, as nearly 40 percent of the respondents predicted increases of 20 percent or more in eDiscovery outlays next year.

According to researchers, increasing inquiries for ESI is driving organizations to not only spend more on eDiscovery but also to spend that money on bringing eDiscovery activities in-house.

“It is not surprising that a majority of respondents want to gain more control over electronic discovery by bringing all or a portion of these tasks in-house,” researchers noted. “Today, most organizations outsource electronic discovery processes because they do not have the resources internally and desire to shift some of the risk to a third party.”

“Outsourcing was an ideal option when matters involving ESI [Electronically Stored Information] were infrequent,” they continued.  “Now, the volumes dictate more specialized staff.”

The study pegged much of the increased inquiry activity to the current economic climate. Belt-tightening by companies resulting in contract renegotiations with suppliers, as well as partners and workforce reductions, have contributed to a rise in lawsuits, the researchers reasoned.  In addition, shareholders have sought legal remedies to their dissatisfaction with company performance. Moreover, regulatory activity has increased as government agencies take on more responsibility for economic recovery and for reducing the risk of future economic meltdowns.

“While it is easy to blame the current economy for the increase in lawsuits and therefore the increase in electronic discovery,” the researchers cautioned, “there is very little supporting evidence that electronic discovery will subside once current conditions improve.”

“Electronic discovery may very well be the proverbial snowball rolling down a mountain,” they added. “It is more likely to become an avalanche than it is to stop.”

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