A new survey by The Cowen Group, a New York-based headhunter and research consultant, shows a strong spurt of growth in electronic data discovery workload at law firms. The survey of 88 law firm and corporate law department professionals found that 70 percent of law firms reported an increase in workload for their litigation support and e-discovery departments.

That figure, says David Cowen, managing partner at The Cowen Group, is a sharp rise from the second quarter of 2009, when only 42 percent of firms reported increases. Corporate law departments followed suit, with 77 percent of respondents also reporting workload spikes.

Bolstering the prediction, 55 percent of corporate and 62 percent of firm respondents said they “anticipate outsourcing a significant amount of e-discovery to third-party providers (with some organizations expected to do both).” The firms expect to grow capacity either by adding head count or purchasing new (or updating) technology, he notes.

Not only that, but the growth is expected to happen soon: 50 percent of the law firms believe they will increase technology spending in the next three months — a sharp contrast from 2010, when only 31 percent of firms were planning additional EDD technology investments. Likewise, 43 percent of firms plan to add people in the next three months, compared to 32 percent last year.

Meanwhile, says Cowen, corporate legal departments are feeling increasing pressure to “do more with less in-house to keep external costs down.” Only 12 percent expect to increase headcount, but 30 percent will spike technology spending in the next six months, he says in the report.

In the past year, 49 percent of law firm and 23 percent of corporate respondents said they have used predictive coding through a third-party vendor — and another 38 percent of firm respondents said they are considering making the investment. For firms, that’s a jump of 19 percent from last year for use, says Cowen.

He ends the report with a note of caution to temper our enthusiasm. “Continued and accelerated growth is always welcome news, and is even more reassuring today. However, it’s important to keep in mind that this growth in e-discovery demand is the result of both more litigation and an exploding, under-managed data footprint at corporations,” he says. •