e-discovery 2.0

Recently, I attended a conference in Washington DC with a large number of government agencies, including (I must confess) many Clearwell customers like the Department of Health and Human Services, the Department of Homeland Security, and the Veterans Administration. It will probably come as no surprise that, during our conversations, it became abundantly clear that they had substantial electronic discovery technology needs. Many were still reviewing PST files manually in Outlook; others were TIFFing millions of pages of documents prior to directly loading into a traditional review application for eyes-on review. That’s right, nary a trace of early case assessment, transparent search, or culling to be found.

Sadly, no news there. What was fascinating for us was the reaction to the latest release of the Clearwell E-Discovery Platform, Version 5.5. Version 5.5 contains significant new functionality, including dramatically increased performance and scalability along with a number of substantial processing, analysis, review, and production enhancements. But, in addition to these features, we have rolled out a set of e-discovery best practices templates designed to make it vastly easier for organizations to implement a formal e-discovery methodology that builds on the integrated nature of our platform. And it was the prospect of such a methodology, even more than the technology, that people were buzzing about at the summit.

Why? With all of the activity going on in the e-discovery space around product and technology innovation, there was some strong feedback that process and methodology may have gotten lost in the shuffle. And, if you think about it, it’s process and methodology that are likely to be most carefully assessed when the courts are considering the reasonableness (or lack thereof) of e-discovery for a case.

The importance of putting process and methodology front and center (along with a commitment to making the necessary organizational changes to make it happen) is not exactly a new concept. Ralph Losey has been talking about it for years over on his groundbreaking and irreverent e-discovery team blog, and it’s a frequent topic of keynote speakers on the e-discovery lecture circuit. However, like eating your vegetables or exercising, putting in place the right e-discovery process in an organization is something that people realize the benefit of, but still ignore.

This cannot continue, as the stakes are escalating. Take the recent case of Mt. Hawley Ins. Co. v. Felman Prod., Inc. Dean will dive into this case in much greater detail in an upcoming post, but it is very relevant to the methodology versus technology discussion in that it highlights how a methodology problem can cause a fateful technology problem to be overlooked. In this case, a lack of sufficient quality control processes caused the plaintiff to inadvertently produce a number of privileged emails. The court found the inadvertent production was not “solely attributable” to a problem with a Concordance index, and that the plaintiff “failed to perform critical quality control sampling” to determine whether the production was appropriate. Privilege was waived.

What’s the solution? We believe that we’re on to something with Clearwell 5.5, in that we can, uniquely among e-discovery products, marry together methodology and technology in a single platform that allows for the entire e-discovery process to be documented and defended, end-to-end. We have particularly focused on the most critical part of the process which seems to come up over and over again in sanction and privilege waiver decisions, which is the way that an organization moves from an initial pool of documents to a set of defensibly-culled, potentially responsive documents, on through to tagging and production. Our unique workflow capabilities allow the entire process to be documented and instantly recalled with the click of a mouse, letting you see each decision that was made during the course of the case in a step-by-step fashion, and then to structure additional quality control audits on top of those decisions to ensure that every “i” is dotted and every “t” crossed.

It’s a good thing for everyone involved in litigation that e-discovery technology is maturing rapidly to the point where it can start to help solve these sorts of process problems rather than being the cause of them (as was the unfortunately case in Mt. Hawley). This is a major focus for us at Clearwell and you’ll see a lot more exciting news from us on this front over the next few months, so stay tuned!

I was at the Sedona Conference Working Group’s Mid Year meeting last week where 80 or so electronic discovery practitioners and judges met to discuss hot topics in bucolic Denver, Colorado.  Without getting into the particulars of any discussion, several themes continue to stay on the front burner, including the progress of the cooperation proclamation and the relatively newer issue of proportionality (as highlighted recently by The American College of Trial Lawyers Task Force on Discovery).

Aside from those overarching themes I was struck by how polarizing the discussion was around one recent case in particular.  While many notable commentators have already made this the most talked about cases of the year, Phillip M. Adams & Assoc., LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009) continues to stimulate discussion.   Adams v. Dell is a patent infringement case where the plaintiff, alleged that one of the defendants (ASUS) destroyed critical pieces of evidence and should be sanctioned accordingly.

The underlying facts and timelines are fairly complex, but in summary the dispute centered around the alleged infringement of several patents developed to resolve defects in floppy disks during in the late 80′s.  What makes this decision so vexing is that it starts out as a preservation case, but quickly confuses that concept with data retention and information management practices/policies.

So, starting with the preservation angle…  Both sides fortunately agreed about the definition for the duty to preserve evidence, which in the 10^th circuit begins when a party “knows or should know [it] is relevant to imminent or ongoing litigation.”  The triggering of the preservation duty was not surprisingly much more complicated and ASUS (the responding party) claimed that its duty to preserve wasn’t triggered until early 2005, when they received a letter warning it of potential litigation because of the alleged patent infringement.  But, the Magistrate held that “counsel’s letter is not the inviolable benchmark” and the duty to preserve was triggered much earlier (in the 1999-2000 time frame) because similar litigation was rampant in the industry, highlighted by a late 1999 suit where Toshiba paid billions of dollars in a class action settlement related to similar floppy disk issues.

Leaving the murky preservation issue by the wayside for a bit, the Magistrate then moved into ASUS’ claims that FRCP 37(e) provided a safe harbor for its alleged destruction.

“ASUS claims it can find a safe harbor against sanctions because of the recently adopted rule that sanctions may not be generally imposed for ‘failing to provide electronically stored information lost’ if a party can show the loss was ‘a result of the routine, good-faith operation of an electronic information system.’”

Nice try, but strike two for ASUS…

“ASUS provided an extensive declaration from an experienced consultant in e-discovery. While he stated the reasons for and history of ASUS’ ‘distributed information architecture,’ he did not state any opinion as to the reasonableness or good-faith in the system’s operation. And while he says ‘ASUSTeK’s data architecture relies predominantly on storage on individual user’s workstations,’ his 31-page declaration does not show he is familiar with the precise practices pointed out in the declarations of employees. Those employees’ declarations describe the practice of ASUS’ email system to overwrite old data regardless of its significance; ASUS’ reliance on employees for all email and data archiving; and the process of replacement of computers, which also relies on employees to transfer data from their old to their new computers. Neither the expert nor ASUS speak of archiving ‘policies;’ they speak of archiving ‘practices.’

The court’s distinction between “policies” and “practices” seems like a convenient (perhaps “Deus ex machina”) way to discount ASUS’ data retention activities and prevent the use of the FRCP 37(e) safe harbor.  Since in most instances, “bona fide, consistent and reasonable” document retention “policies” have been found to be presumptively valid by everyone ranging from Sedona (Guideline 3) to Carlucci v. Piper Aircraft Corp. and Arthur Andersen LLP v. United States, 125 S.Ct. 2129 (2005).  It’s not clear how he draws the important “practices” distinction and why said practices are exponentially different from presumptively valid “policies.”

It’s precisely this line of thinking that confuses the alleged failure of the duty to preserve (discussed at the outset of the opinion) with the duty to retain information.  The court seems to think it’s an “unreasonable” practice to have custodians responsible for compliance with data retention and this deficiency made the safe harbor unavailable.

“ASUS has explained that it has no centralized storage of electronic documents, email or otherwise, and relies on individual employees to archive email (which will be deleted if left on the server) and electronic documents (which reside only on individual workstations).”

Not only is this custodian-based retention practice, in and of itself, reasonable; it’s probably the most common form of data retention practices seen at corporations today.  While a number of vendors have promised intelligent retention systems that work without any significant human intervention, for the most part those solutions are still in their infancy.  Additionally, there are significant technical challenges to have an application manage *all* ESI (Electronically Stored Information) that exist for a given custodian (including desktop files, instant messaging, text messaging, social media, etc.) As such, most companies must inherently rely upon their custodians to both retain and preserve data pursuant to company policies.  The court not only seems to miss this point, but also attempts to impose an obligation that corporations must prevent the “loss of data” above and beyond specific preservation obligations.

“ASUS’ practices invite the abuse of rights of others, because the practices tend toward loss of data. The practices place operations-level employees in the position of deciding what information is relevant to the enterprise and its data retention needs. ASUS alone bears responsibility for the absence of evidence it would be expected to possess. While Adams has not shown ASUS mounted a destructive effort aimed at evidence affecting Adams or at evidence of ASUS’ wrongful use of intellectual property, it is clear that ASUS’ lack of a retention policy and irresponsible data retention practices are responsible for the loss of significant data.”

Although the exact rationale was unclear, the court held that ASUS violated their duty to preserve and that the loss of evidence could not be excused as a “routine, good faith operation of electronic information systems.” While the court ruled that sanctions were appropriate, it reserved final sanctions pending the close of discovery.   Depending on what those ultimate sanctions look like, it seems pretty likely that this decision will be subject to appellate review.  Until then, it’s probably too soon to treat this questionable holding as gospel.  Wary corporations however should continue to bolster the “reasonableness” of their information management/retention/destruction policies and practices so that in hindsight a court won’t be able to take away the FRCP electronic discovery 37(e) safe harbor by casting those “practices” as being unreasonable.

Over the past 4 years, I have had hundreds of conversations with corporate counsel and “legal IT”, meaning technical folks charged with supporting the legal team. More and more of them are looking to lower their costs by bringing e-discovery in-house. But as they work through that process, there’s one question that consistently comes up, even today – namely, “When [insert name of software company] says they “do” e-discovery, what exactly does that mean?”

There has been progress towards answering this question, thanks mainly to the analyst community. George Socha and Tom Gelbmann’s EDRM framework has been immensely helpful in breaking down electronic discovery into its component steps. Other analysts, like Debra Logan at Gartner, were quick to embrace the framework, prompting every software provider to follow suit. As a result, there is today a common language that everyone uses to describe the e-discovery process.

The Electronic Discovery Reference Model (EDRM) breaks down the e-discovery process into a series of steps. Companies looking to buy e-discovery software to lower costs typically map different software products to each of these steps, to make sure that they cover the entire process.

But having a universally-agreed framework is only half the answer. To eliminate customer confusion, there also needs to be agreement on how different software products fit into the framework. This is especially important since there is no single, end-to-end solution for e-discovery which covers all aspects of EDRM. So customers are forced to think about how different software solutions fit together. And that is where things begin to fall apart.

Many software vendors feel it is advantageous to claim that they do everything, even though they do not. Customers are rightly suspicious of those claims, and so press vendors to provide more detailed information – hence the question, “when you say you do e-discovery, what exactly does that mean?”

In light of that, how can litigation support teams, corporate counsel, or legal IT people figure out which e-discovery solution best meets their needs? From observing this decision-making process hundreds of times, I have found 3 simple steps are incredibly helpful.

Step 1: Read the analyst reports

Two reports in particular make for required reading. One is Gartner’s MarketScope Report, which is available for free at certain sites; the other is the 451Group’s recent e-discovery report, which is summarized in a publicly available presentation. The helpful thing about the 451 Group’s report is that it tells you which software companies do which parts of the EDRM process. You do have to buy the report to get the full picture (it’s well worth it!), but the publicly available presentation will give you a flavor for their analyis, and I have drawn from that presentation in the figure below:

Analyst firms like the 451 Group map software vendors to the EDRM framework according to what they actually do, which is often different from what software vendors claim they do.

The 451 Group’s analysis highlights several important points. First, it shows that there is no single end-to-end solution. Even the products of giants like EMC (SourceOne), HP (IAP), and IBM (CommonStore) only solve one piece of the puzzle, information management. Second, it shows that customers have choices at each stage of the EDRM process. For example, to solve the problem of identification, collection, and preservation of electronic information, customers can choose from solutions as diverse as Guidance EnCase (forensic collection), Index Engines (back-up tapes) and Mimosa NearPoint (email archive). Third, it provides an independent assessment of what vendors do, as opposed to what they may claim. For example, Kazeon claims analysis and review capabilities, whereas the report shows its product does identification, collection, and preservation; Recommind claims its Axcelerate eDiscovery and MindServer products do processing, whereas the report finds that they do not.

Step 2: Evaluate the products prior to purchase

Just as anyone would test-drive a car prior to purchase, it’s critical to test-drive e-discovery software. Any vendor should be willing to provide their software free of charge for an evaluation on-premise. The most effective evaluations are when the customer uses the product themselves, either on a live case or test data. This is far preferable to just sending the data to the vendor who then loads it into their system, as in that scenario there are too many opportunities for the vendor to hide their product’s shortcomings.

Step 3: Check references carefully

The trick with references is to insist on relevant references. It’s not good enough for the vendor to dredge up some random person who says nice things; or even a credible knowledgeable person who is using the product in a completely different way. For example, if a company is happy with Autonomy’s IDOL for enterprise search, that does not tell you much about what Autonomy might be like for e-discovery. What really counts are references from other customers who are using the product for the same application that you are.

All this can sound like a lot of work, but I have seen people go through the process in as little as a month, and be much happier for it. A little work up front can save a lot of time (and heart-ache!) later on.

If you have been to LegalTech before, you know that – by the end of the day – you could use a nice stiff drink to recover. So why not do it with some company? We (Aaref, Dean, Kurt, and Will) will be at the Bridges Bar at the Hilton at 7pm, and we are happy to buy drinks for the first 50 E-Discovery 2.0 readers who join us (we will have a big E-Discovery 2.0 sign on our table, so feel free to just stop by and introduce yourself). It’s a great way to meet us, suggest ideas for what we should cover on the blog, and get warmed up before going to the B-Discovery event later that evening.

Come early though. We mentioned the idea to Brandon, who runs the E-Discovery 2.0 group on LinkedIn, and he invited his group to arrive shortly after, so the seats (and the drinks!) may go fast.

Earlier today, Gartner published its eDiscovery MarketScope for 2009. Written by Debra Logan, John Bace, and Whit Andrews, it is perhaps the most comprehensive “buyers guide” available for companies interested in using electronic discovery technology to lower costs.

The eDiscovery MarketScope analyzes about 20 software companies focused on electronic data discovery. Based on extensive interviews with end customers and data from the companies themselves, Gartner rates the companies using criteria similar to those used in its famous Magic Quadrant reports. It also identifies market trends, and makes predictions for 2009 and beyond.

This report is required reading for anyone considering an investment in eDiscovery software, and I strongly recommend that you get a copy, either from Gartner or some other authorized source. To give you a flavor for Gartner’s analysis, a few of its main conclusions are as follows:

1. Bringing eDiscovery In-House Dramatically Reduces Cost

This is a claim that electronic discovery software vendors often make, and prospective customers rightly question. Gartner investigates and finds that many of its corporate clients are saving large amounts of money by using eDiscovery software to reduce the amount they spend on lawyers and legal service providers. It reports that customers typically recover their money from buying eDiscovery software within 3-6 months of implementation.

2. There’s No Single, End-To-End Solution For eDiscovery

Gartner addresses what is probably the most common question I get asked by corporate counsels and litigation support managers – namely, “Isn’t there a single product I can buy that will do end-to-end eDiscovery, covering all aspects of the EDRM?” The answer, of course, is “no” and Gartner goes further by predicting that the answer will remain “no” until at least 2011. So, for the foreseeable future, customers will need to buy best-of-breed products from different vendors for different stages of the EDRM model, and ensure they integrate smoothly.

3. There Are 4 Leading eDiscovery Software Companies

List of vendors achieving highest rating of “strong positive” (from Figure 2, page 10)

Of all the companies it analyzed, Gartner only gives 4 its highest rating of “strong positive”. Each of the four has different strengths. For processing, analysis and review, Clearwell is “fast-to-install and easy-to-use” (page 12) , while FTI’s ability to offer Attenex / RingTail either hosted or on-premise “positions it well for the future” (page 13) . Symantec’s leadership in email archiving makes Discovery Accelerator a good option for its customers who need to search and export data from Enterprise Vault. Finally, Zylab is well-known within law-enforcement circles and has a strong presence in Europe and Asia.

4. There Will Be Consolidation In The Next 12 Months

As the market matures, Gartner predicts that as many as 25% of eDiscovery software providers will either merge, be acquired, or exit the business. Access Data’s ambitious bid for Guidance has publicly put Guidance in play. Beyond that, Gartner suggests that Kazeon and several other players are all likely acquisition targets for larger companies wishing to enter the eDiscovery space.

Of course, Gartner is not the only influential voice in eDiscovery. Earlier this year, George Socha and Tom Gelbmann published their Socha-Gelbmann Survey, which also provides a valuable perspective on the market. How do the two reports compare? That will be the subject of my next post.

Yesterday, George Socha and Tom Gelbmann published summary results for their 2008 EDD survey. George and Tom gathered self-reported data from 85 electronic data discovery service providers and 40 e-discovery litigation software companies. To help vendors resist the temptation to “exaggerate” their accomplishments, they then cross-referenced the responses against independent surveys submitted by 29 law firms and 19 corporations, and applied a healthy dose of their own good judgment. The outcome, which they will publish in-full next month, is a great snapshot of the industry, and probably the most objective ranking of e-discovery vendors that you can find.

By comparing this year’s results to the 2007 survey, you get a sense for how much has changed in the e-discovery world over the past 12 months:

Top E-Discovery Software Companies

Note: arrows show change to rankings from last year’s Socha-Gelbmann Survey

Autonomy and Clearwell move up to the Top 5, overtaking Attenex and CT Summation which slip back to the second tier. There are also 3 new names ranked 6 through 10 (Epiq, iConect and Symantec) who displace Cataphora, Doculex, ISYS, and Oracle, none of whom even make it into the top 15. In other words, 70% of the rankings have changed since last year.

If a litigation support manager were to focus only on the Top 5 in making her ediscovery software decision, she would have a choice of some very different solutions. Autonomy positions itself as a high-end (expensive) platform for corporations, while Lexis offers a comprehensive toolset for law firms. Guidance and Clearwell are complementary in that both provide best-of-breed solutions for parts of the EDRM model: Guidance is the leader in collection and preservation, while Clearwell is the leader in processing, analysis and review. Finally, FTI takes a services-based approach which centers around RingTail, its hosted review application.

Looking lower down the list, there were some other interesting results, primarily around which companies were NOT ranked. Kazeon made it into the third tier (ranked 11-15) whereas StoredIQ, its main competitor, did not. Nor did Recommind break into the rankings, despite making a major push into e-discovery from knowledge management over the past year. But the most striking absentees are PSS Systems and Exterro, which have pioneered litigation hold management for Fortune 100 companies. I can only guess that they cover too much of niche market to warrant inclusion in an industry-wide report.

Top E-Discovery Service Providers

In contrast to the world of software, e-discovery services saw much less movement in this year’s rankings:

Note: arrows show change to rankings from last year’s Socha-Gelbmann Survey

There was only one change to the top 5: Fios moved up, displacing Guidance which plummeted 10-20 places down to a 16-25 ranking. In addition, there were two new players in the top 10, Epiq and Huron, who edged out Electronic Evidence Discovery and Ernst & Young.

Conclusion

Changes to the software rankings reflect broader changes in the litigation software market. As litigation discovery has moved in-house, corporations have become a major driver of purchase decisions that were previously left to law firms. Many software companies, such as Attenex, have struggled to make this transition, while others, such as Clearwell, have capitalized on it. There has been no such change in the service provider world and, as a result, the rankings are relatively stable.

It will be interesting to see what happens next year. Every other software space is dominated by a small number of players, like Oracle for databases or VMWare for virtualization. If the same is true for top ediscovery, then we can expect many fewer changes to the software rankings in future surveys as the leaders pull away from the pack.

Learn More On Litigation Support Software & Frcp Electronic Discovery.

Hello from Los Angeles, where the weather’s fine and summer’s in full swing! Accordingly, a few of us in the legal technology community spent the night before LegalTech enjoying a Dodger’s game hosted by LTN editor-in-chief and rabid Yankees fan Monica Bay (outfitted in full Yankee regalia for the occasion). So as to not incur Monica’s wrath, I left my Red Sox cap at home.

At the game, I happened to sit next to a colleague from another vendor who mentioned that her firm is about to celebrate twenty years in e-discovery.

Twenty years! What a remarkable milestone for any company. It got me wondering about how much technology has evolved over that time period, and raised an interesting question to noodle over between innings: With all of the investment and innovation in the e-discovery space, who’s actually winning the electronic data discovery tug of war, twenty years in?

What is the e-discovery tug of war, you ask? Let’s start with the scene in 1988.

On one side, the documents: They stared at you from across the mud puddle — hundreds or even thousands of boxes stacked one of top of another, hauled out from a warehouse where they’d spent their days, against their will, in windowless solitude, ready for battle. They were ticked.

And on the other side, you: With your new IBM PS/2 Model 80 (the best money could buy: 640×480 VGA color screen, 16mhz 386 processor, 80MB hard drive), flatbed scanner, and some new DOS-based database program called “Concordance.” To add insult to injury, Starbucks hadn’t even really gone national yet, so you were probably stuck with a jar of instant coffee to try to stay awake.

You didn’t stand a chance.

From then until now, two different dynamics have played against each other, pulling the flag back and forth over the dividing line:

1. On one side, the explosive growth of electronic documents has been truly mind-boggling. From a baseline of close to zero in 1988 (WordPerfect 5.1 wasn’t introduced until 1989), today essentially every single business document is created, transmitted, and stored electronically.
2. On the other side, technology innovators in the e-discovery space have used creativity and a large dose of Moore’s Law to store, process, and search electronic documents with ever-increasing speed and efficiency.

During the seventh inning stretch, with the Dodgers holding a commanding lead over the White Sox, I thought: Maybe technology is about to win.

Here’s the argument: Assuming that the creation of document content will still largely be human-driven, now that most every legally significant class of communication is being created and managed on-line, growth of e-discovery-relevant data volumes may quickly move from being exponential (when everything was “going digital”) to a rate driven more by productivity improvements and economic growth. Improvements in processing, search, and analysis of documents, however, will continue to improve at a Moore’s Law pace for the foreseeable future, presumably making it fairly trivial for advanced e-discovery technologies to outmuscle their longtime adversary.

Google shows some evidence of this victory of technology over data. Remember that just a few years back, search engines frequently trumpeted how much of the Internet they were able to index – and it was far from the whole thing. Today, that’s largely a solved problem. It’s simply amazing how quickly Google’s index ingests new data, often in what seems like a matter of minutes. In fact, I dare say that by the time you read this post, you’ll be able to perform a Google search on some of its content and have it come up front-and-center in your search results. Amazing.

What does this mean for electronic data discovery? The best e-discovery technologies will change to solve challenges that are far more strategic in nature. Instead of focusing on how fast and effectively they can process documents, or how quickly they can allow attorneys to review them, they’ll provide powerful capabilities for addressing some of the most important e-discovery problems that inside and outside counsel face, such as:

• How do I craft robust, defensible search strategies for my cases while minimizing e-discovery costs?
• How can I standardize a repeatable, high-quality discovery process that’s executed consistently across my organization?
• How can my organization become more proactive in identifying potential legal risks and liabilities based on our company’s “legal history”?

I’m sure you can come up with a number of others. What do you think – is the war against documents over, and electronic data discovery ready to move to a new phase? Or are there still many more battles to be fought?

HP announced today that it has signed an agreement with Clearwell to resell the Clearwell E-Discovery Platform. The two companies have been partners for some time and have many joint customers such as Constellation Energy, Del Monte, and Universal Music. But, under this new agreement, thousands of HP sales people will now be compensated for selling Clearwell, giving them a powerful incentive to introduce their customer base to Clearwell’s e-discovery solution.

To my knowledge, this is the first time that a major archiving vendor has agreed to resell a partner’s e-discovery solution, and it raises a couple of interesting questions: why did HP do this deal? And, what does it mean for HP customers?

Ask anyone who tracks the email archiving market, and they will tell you that e-discovery is a major driver of archive purchases. As Gartner’s Carolyn DiCenzo observes: “Legal discovery is being mentioned by almost every client evaluating an e-mail archiving solution.” That’s because whenever a company has litigation, regulatory inquiries or internal investigations, IT is required to provide relevant electronic information to legal or information security. Far better to have it in one repository than spread out on user desktops, email servers, and file shares. So, CIOs are partnering with General Counsels to deploy email archives, much as they did – in years gone by – with the VP of Sales to implement CRM systems.

The problem is that, when you look at archives as e-discovery solutions, they only solve 50% of the pain. In EDRM terms, archives are a very effective solution for collection and preservation, but awful for processing, analysis, and review. They provide a bulletproof way to capture and preserve every message, but do not make it easy to perform early case analyses and cull down data to the very small set of documents relevant to the case at hand.

That’s why enterprise customers find it so compelling to pair up an archive, such as HP’s Integrated Archive Platform, with an e-discovery solution, such as the Clearwell E-Discovery Platform. So to summarize, HP is doing this deal because it’s the best way to provide HP customers with an end-to-end solution for e-discovery. The two products integrate out-of-the-box, have been proven to work together at several large enterprises, and can be purchased from a single supplier (HP). That’s a much easier, lower risk decision for many enterprises than purchasing separate point solutions and cobbling them together.

Very few companies have as much mindshare with corporate CIOs as HP. It can only be good news for the e-discovery market as a whole to have one the largest technology companies in the world out there educating its customers on the value of lowering the costs and risks of ediscovery.

There are two independent analyst reports identifying the top ediscovery software vendors.

The first, published in June 2007, is the Socha-Gelbmann Annual Electronic Discovery Survey. The authors, George Socha and Tom Gelbmann, probably know more about e-discovery than anyone else you are likely to meet. As someone who has filled out their 178-page survey, I can tell you it is excruciating in its detail and incredibly rigorous. According to the report, George and Tom contacted nearly 1,000 individuals and collected detailed data from 115 organizations.

The second analyst report is Gartner’s MarketScope, which is published today (December 2007). Its author, Debra Logan, is fast emerging as one of the leading lights of e-discovery and has great instincts about the market. For her report, Debra tells me that surveyed 30 vendors and checked over 90 customer references.

The results from the two reports are as follows:

(1) Companies listed as “Top Electronic Discovery Software Providers Based on 7 Criteria” (Table 19 and 20), listed in alphabetical order. (2) Companies awarded ratings of “Positive” or “Strong Positive” (Figure 1), listed in alphabetical order.

Why are the lists so different? Primarily because of two main factors:

1. Gartner’s list mixes service providers and software companies whereas Socha breaks them out separately. The Socha report has an entirely separate list for service providers.
2. Socha’s report was completed 6 months earlier than Gartner’s. In that intervening period, several new players entered the e-discovery market. For example, Kazeon was ranked by Gartner earlier this year a “niche player” (lower left quadrant) in the enterprise search market, and has not been in e-discovery long enough to participate in the Socha study (or, if they did participate, they did not have enough e-discovery customers to gain a high ranking).

Conclusions

The first conclusion to draw from these lists is that any vendor not in them is probably not worth considering for e-discovery. If neither Socha nor Gartner ranked them highly, then the vendor either could not provide compelling customer references or has lost competitive bake-offs to someone who is on the list. Either way, they are best avoided.

The second thing that stands out is how different these lists are. Of the 21 vendors identified by Socha and Gartner, only 5 are ranked as top e-discovery software vendors by both of them. Those 5 are Attenex, Clearwell, FTI, Guidance, and LexisNexis. So, if you are an enterprise looking for an e-discovery solution, it is clear who you should call first.

Finally, it is worth noting that both these analyst reports are relatively new. This is the third annual survey for Socha, and the first MarketScope for Gartner. That speaks to the fact that e-discovery software is a new, fast-growing product area. More and more enterprises are adopting e-discovery software solutions, and asking analysts about them, because they offer such a compelling ROI.

Thursday, December 6 was a big day for several e-discovery companies. Starting on the home front, it was Clearwell’s 3^rd birthday and we celebrated by announcing our deployment at Bear Stearns. Looking at where we are now, it’s hard to believe that 3 years ago the company consisted of a few guys with an idea. Today, we have over 100 customers who rely on Clearwell for e-discovery, and we are thrilled to count Ruben, Christoph and the team at Bear Stearns among them.

That same day, MetaLINCS announced its acquisition by Seagate (more on that to follow shortly), and Guidance announced the appointment of a new CEO. Victor Limongelli was promoted from President to the top job after what sounds like a comprehensive evaluation of both internal and external candidates by Guidance’s board. I always enjoy my conversations with Victor and applaud Guidance’s decision.

All in all, an eventful day.