No one I know who is working in the legal industry thinks that less e-discovery work is moving in-house. A recent report produced by Exterro and The Association of Certified E-Discovery Specialists (ACEDS) confirms quite the opposite.
Full disclosure, I’m the president of ACEDS, and we are committed to providing information to the legal community that is helpful. So, when Exterro approached ACEDS a few months back and asked us to help produce their State of E-Discovery report, we happily agreed and promised to share the results as well.
E-Discovery Work Continues To Move In-House
The report, which is derived from a variety of industry sources, tells the continuing story of e-discovery work moving in-house to corporate legal operations professionals. Fifty percent of legal departments now feature an on-site e-discovery team. Of those, 60% now have dedicated IT services, a five-times increase over the year prior.
Chief legal officers are using more technology than ever before to drive efficiency. Sixty-three percent of CLOs say business risks like privacy rank as their top priorities. Seventy percent of CLOs think that the use of AI-based tools is poised to accelerate. And did you know that 80% of companies are saying the GDPR compliance has been more difficult than anticipated. It’ll be interesting to see the response to what is likely a growing privacy movement in the United States.
Also interesting is that 95% of federal judges would like to see greater participation from in-house legal teams, particularly when it comes to e-discovery issues.
In the sanctions arena, intentional misconduct leading to the spoliation of ESI is the cause of sanctions in 90% of cases. The 2015 amendments to the FRCP have clearly changed the landscape there. You can download the full State of E-Discovery report here.
One interesting factoid that is not in the report: Our friends at eDiscovery Assistant are reporting that since in the first half of 2020 there have been nearly 450 reported court decisions dealing with e-discovery sanctions.
Employment Is The Big Unknown
Although employment numbers are not outlined in the report, as you can see from ATL’s Law Firm Layoff Tracker here, the coronavirus deeply impacted law firms, with salary cuts, furloughs, and layoffs. And this does not account for the dreaded stealth layoffs. Bloomberg Law reported last month that nearly half of Biglaw firms made financial cuts. It is not entirely clear that we’ve seen the full impact there yet as we move into the second half of the year. We are likely to see more cuts if the billable hours do not ratchet up soon.
In fairness, there are now scattered reports that some firms that made cuts are now rolling back and restoring salary reductions based on better than anticipated financial forecasts.
On the service provider side, there have clearly been cuts too. But the light may be a little brighter. I spoke with Lou Mancuso, global recruiting director for Consilio, who’s been in the space for 12 years, and he told me that “we’re definitely seeing candidates from other service providers, and Consilio has continued to hold steady with recruitment efforts.” He added that “recruitment is not at an all-time high, but we’ve continued to grow, and we’ve been fortunate to continue hiring when that isn’t the case across the industry.”
The impact of COVID-19 on the corporate side is less clear. Colin McCarthy, who runs Legal Operators, a community of legal operations professionals who network and attend legal operations events, told me that “Times are in flux right now. We are seeing extremely talented people across the legal landscape being let go,” he said. “But on the flip side of that coin, I am seeing a lot of movement in companies in Silicon Valley hiring for attorney roles and legal operations positions.”
McCarthy told me that he recently had a conversation with the head of a national legal talent network and placement company that has identified over 12,000 legal jobs across the United States. “All the news is not bleak, McCarthy said. “I am rooting for people to get back to work!”
The Volume Of Work Will Increase
As we slowly creep toward safer social interaction, it seems fair to say that there is a simmering cauldron of litigation out there. Think about workplace safety; return to schools and office space; commercial real estate and leasing; travel and hospitality — all of these and other areas seem ripe for disputes.
And don’t forget bankruptcy and restructuring. While we seen some transactions close during the first half of 2020, it’s not even a guess that many deals probably faltered. Those will likely (hopefully) come back in 2021.
The implication, then, is that while more work moves in-house, clearly the workload will ramp up in the coming months. This should improve employment opportunities.
Mike Quartararo is the President of the Association of Certified E-Discovery Specialists (ACEDS), a professional member association providing training and certification in e-discovery. He is also the author of the 2016 book Project Management in Electronic Discovery and a consultant providing e-discovery, project management and legal technology advisory and training services to law firms and Fortune 500 corporations across the globe. You can reach him via email at [email protected] Follow him on Twitter @mikequartararo.