"In the last year or two, big law firms seem to find themselves at a fork in the road," Carpenter said.
They are either doubling down on the technology and people they have invested in to handle the work in-house, or they are outsourcing to managed services providers that are using the various software available, he said.
The reason many firms are outsourcing, Carpenter said, is to avoid chasing the better mousetrap when it comes to upgrades in technology and reduce the headcount within their firms.
"There's an increasing number of firms that have said, 'We'll just work with strategic partners on the outside,'" Carpenter said.
A few years ago, Robertson said, conventional wisdom was that in order to get a hold of e-discovery costs, firms needed to "build a factory" in-house. Then the pendulum swung back in the opposite direction and, in the last year, has settled somewhere back toward the middle with firms having some capability to handle e-discovery in-house but often hosting it with a managed services provider, Robertson said. That model "represents a state we will see for a while," he said.
KCura provides the software, which is then run by the firms that buy it or the vendors that use it. Robertson said there are 74 law firms that have purchased a license for the software. There are a total of 215 licenses out there, across law firms, corporations, government agencies and vendors. Through the vendors, 3,500 different organizations use Relativity each month, he said.
Murphy said that while large firms and corporations are the vanguards in using e-discovery software, smaller shops are getting into the mix. She said Summation has a version with limited data and user amounts at a lower cost that is good for a smaller firm with smaller amounts of data to manage.
Outside of the e-discovery realm, AccessData has provided forensic consultants and law enforcement with mobile phone forensic capabilities. That is starting to catch on in corporations and law firms, Murphy said. As more people use personal phones in the workplace, the "smoking gun" could often be found there, she said. AccessData brings in a tablet-like device that hooks up to a phone and downloads the data for easier viewing. The e-discovery clients are starting to ask for this, Murphy said.
Tempering the Price Shock
While tech lovers get into the industry out of a love for the ever-changing advancements in their respective fields, that is exactly why many law firms stay away from spending millions of dollars on e-discovery software.
The software industry has now looked to temper firms' fears of backing a losing horse through moving away from charging a licensing fee and instead offering annual or multiyear subscriptions.