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Survey Finds 73 Percent of Enterprises Plan to Bring e-Discovery In-House in Response to Rise in e-Discovery Requests

Clearwell Systems and Enterprise Strategy Group Survey Cites 69 percent plan to Bring Processing and Early Case Analysis In-House in 2010

MOUNTAIN VIEW, Calif. – November 16, 2009 – Clearwell Systems, Inc., a leader in intelligent e-discovery, today announced findings from a survey conducted in partnership with analyst firm Enterprise Strategy Group (ESG). The survey titled “Trends in Electronic Discovery: A Market Perspective” quantify both the rise in e-discovery and litigation over the past year, and the anticipated growth and resulting enterprise readiness to manage the expected volume of cases in 2010.

It has been three years since the U.S. Federal Rules of Civil Procedure were amended with provisions centered on discovery and management of electronically stored information (ESI). In the same timeframe, the macroeconomic climate went from explosive growth to recession, forcing organizations to cut costs as quickly as possible. As companies continue to operate in cost containment or reduction mode, they are changing the way they conduct e-discovery, moving away from a primarily outsourced approach to bringing core elements of e-discovery in-house. The intersection of these two industry trends led ESG and Clearwell to survey over 100 Fortune 2000 enterprises and government agencies.

Key survey findings include:

  • 78% of respondents said that the number of lawsuits and regulatory inquiries they experienced increased in 2009 compared to 2008. The top two factors for the increase in legal activity were “increase in the amount of lawsuits” and “repercussions of the financial crisis”
  • 53% of the respondents expect the number of lawsuits and regulatory inquiries to increase by at least 20% in 2010, with 13% of respondents planning for an increase of 50 percent or more
  • While most respondents taking the survey believe 2010’s increases will be driven by higher litigation, 46% of the respondents expect to receive more regulatory inquiries
  • 48% indicated that they currently have an active project to bring segments of the e-discovery process in-house; 36% will within next 12 months
  • 87% of respondents plan to budget for technology that specifically supports the electronic discovery process in 2010
  • 22% of those surveyed have “E-Discovery Manager” titles, a reflection of the move in-house and importance of having a dedicated resource.

“The rate at which litigation and corresponding e-discovery expenses are rising is alarming, particularly in today’s challenging economic climate when organizations are hyper-sensitive to internal and external expenses,” said Brian Babineau, senior consulting analyst at Enterprise Strategy Group. “The vast majority of cases at large enterprises involve some form of e-discovery, underlining the importance for legal departments to become more strategic about how they manage the processing, analysis and review of ESI. Without question, organizations that remain passive about their e-discovery strategy will face magnified risk, and crippling expenses.”

“The findings of this survey validate a handful of trends that we’ve suspected based on ongoing conversations with customers and industry experts,” said Kamal Shah, VP of marketing and project management at Clearwell Systems. “Bringing e-discovery in-house and focusing on early case analysis has been proven to quickly and effectively lower e-discovery costs.”

ESG’s full report and analysis of the survey findings can be downloaded from Clearwell’s web site here.

About Clearwell Systems
Clearwell Systems is transforming the way enterprises and law firms perform electronic discovery (e-discovery) in response to litigation, regulatory inquiries, and internal investigations. The Clearwell E-Discovery Platform automates the processing, analysis, review, and production phases of e-discovery via a single, integrated product. Leading organizations such as Constellation Energy, DLA Piper, Johnson & Johnson, Toyota, and the Department of Homeland Security / Office of Inspector General are using Clearwell to accelerate early case assessments, intelligently cull-down data, increase reviewer productivity, and ensure the defensibility of their e-discovery process. Consistently ranked as a leader in independent industry surveys and reports, Clearwell Systems is an active participant in the Electronic Discovery Reference Model (EDRM) Project and The Sedona Conference. For more information, visit www.clearwellsystems.com, follow us on Twitter at http://twitter.com/clearwell, or subscribe to the E-Discovery 2.0 blog at http://www.clearwellsystems.com/e-discovery-blog/.