Not to pick on Guidance Software, my former company, but they are publically traded and recently disclosed their aggressive cost-cutting measures. In their PowerPoint presentation, Guidance states that the eDiscovery software field “is maturing…not as many large deals available there” resulting in a strategy for the company to refocus on core computer forensics and computer security, and to pivot toward profitability over topline revenue growth. And I don’t think what Guidance is experiencing is much different than from what many other eDiscovery software firms in the space are going through.

And neither does industry analyst Barry Murphy. “Based on what I see, KCura with their Relativity product is doing well, and I think there has been some good growth in the mobile forensics space, and X1 has done well with X1 Social Discovery in terms of growth and customer acquisition. Other than that, it seems that the remaining eDiscovery software companies are either contracting or experiencing only very modest growth.”

Part of the problem is that many aggressive enterprise eDiscovery deployments never achieve their promise of global scalability. A little over a year ago, the CEO of another eDiscovery and forensics software firm publicly claimed that enterprise-wide Autonomy implementations for eDiscovery, in his opinion, never really worked that well from what he could see. Without commenting on or taking a position on the accuracy of that assertion, the article does reflect broader frustrations I have heard from IT and in-house counsel about eDiscovery software in general that claims to be an end-to-end solution for aggressive and enterprise-wide deployments. As a result, many corporate legal departments and corporate IT have opted to continue to outsource eDiscovery to service providers over attempting to implement enterprise-wide solutions.

On the other hand, and reflective of this trend, services firms in this space are apparently doing quite well and their numbers are growing. There are clearly hundreds, if not over a thousand consulting firms, in North America providing eDiscovery consulting services. In just one metric, two years since we launched X1 Social Discovery, nearly 200 eDiscovery and computer forensics firms have become paying customers, and many more are currently evaluating. Some firms have a single license of X1, many have multiple, even dozens. I think those figures reflect both the number of service providers in this space and the aggressive spending behavior from the providers.

I also think, and of course being biased, that with X1 Social Discovery gaining over 400 paid install sites in just two years since the launch of the product, with 250 percent increase in annual sales in 2013, is quite an accomplishment especially given the status of this market. I think that reflects both the quality of X1 Social Discovery as well as the compelling use case of the collection and preservation of social media data for discovery and investigative purposes. So I want to take this opportunity to thank our customers for making 2013 a great year for us and driving the further development and enhancements of our products.

I’m looking forward very much to Legal Tech New York this year, both to meet with our customers old and new, and to speak with some fellow executives about how they are adapting to the changes in the eDiscovery market and opportunities in 2014. I hope to see you there!

Greg Buckles is a well-known eDiscovery expert with a strong command of technical issues concerning data collection from SharePoint sites. In his presentation, he addressed the particular challenge of preserving data from SharePoint in a targeted matter and in context. According to Buckles, current eDiscovery practices involve mass raw data exports from the platform, instead of a preferable practice of review and early case assessment in place to enable a far more efficient and targeted collection of only potentially relevant information. Bulk exports from SharePoint contain a mass of unstructured data that is out of context with no easy way to associate files, document lists, metadata fields and the many other native data types and fields. As a result, the data must be sorted out on the back-end in time-consuming and highly manual eDiscovery processing and review efforts.  Buckles reports that he routinely sees tenfold increases eDiscovery processing and review costs because of these challenges.

A full video recording of the webinar can be accessed here.

Another key SharePoint eDiscovery challenge involves its deployment architecture. By their nature, typical SharePoint deployments are de-centralized as the solution is geared toward supporting individual departments and “teams” as opposed to forcing data centralization to a single and large data center. Appliance-based eDiscovery solutions or remote collections do not work as it may take weeks if not months to copy a multi-terabyte SharePoint site over a network connection and a large corporation may have several dozens of SharePoint silos to collect from.  Manual collection efforts, which are geared toward mass “data dumps,” are as mentioned very costly and inefficient.

Instead, what is needed is a solution such as X1 Rapid Discovery can quickly and remotely install and operate within the same local network domain to enable localized search, review and early case assessment in place. X1 Rapid Discovery’s full content indexing and preview of native SharePoint document libraries and lists, as well as it robust search, document filters, intuitive review interface, uniquely enables targeted and contextual search, preservation and export of SharePoint evidence in its native format. In fact we believe it is the only solution available that enables true in-place early case assessment and eDiscovery review of SharePoint sites, including iterative search, tagging and full fidelity preview in place, without the requirement to first export all of the data out of the Platform.

To learn more, sign on to the recorded webinar or please contact us at info@x1discovery.com for a further briefing to learn how to save your organization or your clients tens of thousands of dollars on litigation costs associated with SharePoint.

KL Gates Social Media Analysis. To start off, our  previous entry discussed the case of Richards v Hertz Corp., underscoring that any law firm defending or prosecuting personal injury claims, as well as their hired eDiscovery consultants, should be investigating social media sites for source evidence as a matter of course. The same is true for employment law matters and top 10 law firm K&L Gates (which has the best eDiscovery blog of any law firm in my opinion – eDiscoverylaw.com) has a great write-up of E.E.O.C. v. Original Honeybaked Ham Co. of Georgia, Inc, where social media evidence is playing a key role in that case, prompting the  court to issue a broad discovery order for social media. Again, nothing really new here – just further reinforcement of the standardization of social media evidence.

Law Review and Social Media Evidence. This year, several reputable law reviews and other legal treatises have published important and very useful research notes on social media evidence. These resources are subscription only for those with access to Westlaw, but the following are a select list with cites to the articles that I found most useful:

1.  UNDERSTANDING AND AUTHENTICATING EVIDENCE FROM SOCIAL NETWORKING SITES, 7 Wash. J. L. Tech. & Arts 209, 224+
2.  TIPS FOR AUTHENTICATING SOCIAL MEDIA EVIDENCE, 100 Ill. B.J. 482, 485
3.  SOCIAL MEDIA AND THE RULES ON AUTHENTICATION, 43 U. Tol. L. Rev. 367, 405+
4.  WHAT HAPPENS ON MYSPACE STAYS ON MYSPACE: AUTHENTICATION AND GRIFFIN V. STATE, 42 U. Balt. L.F. 164, 186
5.  INTERNET, EMAIL AND SOCIAL MEDIA EVIDENCE, ST051 American Bar Association 51+

Netflix CEO in Hot Water with SEC over Facebook Post.  Netlix CEO Reed Hastings congratulated his team for a job well done in early July on his public Facebook page, and now the SEC is investigating whether he violated investor fair disclosure rules. His message was only 43 words, boasting of increased subscribership and usage of online videos, which could be construed as material non-public information related to financial reporting. This incident obviously highlights the importance of social media monitoring consisting of best practices as part of a corporate social media compliance program.

Search Compliance Interview with Barry Murphy: Finally, this article:  Q&A: Social media data collection increasingly vital to e-discovery is a good read. eDiscoveryJournal’s Barry Murphy is arguably the most knowledgeable independent industry analyst on social media evidence issues.

I know what you may be thinking — another eDiscovery CEO re-branding the company’s software as cloud. But hear me out on this. Sure, X1RD can serve as a hosted SaaS solution like many other tools (SaaS hosting has been around for over a decade), but the big news here is that X1RD is now deployable anywhere, anytime in the IaaS cloud within minutes. X1RD also features the ability to leverage the parallel processing power of the cloud to scale up and scale down as needed. In fact, X1RD is the first pure eDiscovery solution (not including a hosted email archive tool) to meet the technical requirements and be accepted into the Amazon AWS ISV program.

So what does this mean? Allow me to illustrate these ground-breaking capabilities through the following two growingly common scenarios faced by organizations today:

Scenario 1: A F1000 company maintains 2 terabytes of data up in the Amazon EC2 or S3 (storage) cloud and suddenly must find the comparatively small amount of relevant data within those 2TB as quickly as possible to respond to a critical investigation requirement. There is no time to spend several weeks downloading the entire 2TB out of the cloud through the thin pipe or waiting for Amazon personnel to copy the entire data set to hard drives and ship it back. What is urgently needed is the ability to quickly install eDiscovery software to index, search and review that data in the very IaaS cloud environment where it exists. That way only the small data set (say 10 gigabytes) of relevant data is identified and then finally exported. That is what X1 Rapid Discovery delivers.

Scenario 2: The same investigation sends the company’s eDiscovery consultant overseas to collect data at a subsidiary site. Upon the collection of the first 200 gigabytes, the attorneys insist  that the data must be quickly indexed for detailed, iterative searching in order to better inform the remaining on-site collection effort. However, the collection team left their large ECA appliance they normally use at home as it doesn’t travel well nor would it pass foreign customs. However, in this case there are several options with X1RD. If an eDiscovery software solution is truly a cloud-capable solution, then it can quickly install anywhere, including the IaaS cloud or on available hardware on-site. So the team can either locate available hardware resources with Windows OS or upload the data to a private or public IaaS cloud environment and operate a virtual eDiscovery lab with X1RD.

X1RD can just as easily be installed behind the firewall as in the cloud, but right now, all of our demos and proof of concepts are being performed in the IaaS cloud. But don’t just take our word for it, we would be happy to demonstrate this for you by remotely installing in your public or private IaaS cloud environment and collecting, indexing and searching your data. We are up for the challenge!

> Register for our live webinar on May 2 to see a demo of X1 Rapid Discovery and to hear from eDiscovery expert, Barry Murphy, on his view of the current eDiscovery market, with respect to the cloud.