Press release

Inside E-Discovery & Beyond: In-House Legal Departments Embrace Digital Transformation—New BDO USA Survey

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Digital disruption continues to transform the roles and responsibilities
of in-house legal counsel. As the volume of data explodes and data
privacy and regulatory compliance concerns grow, 71 percent of corporate
counsel are considering leveraging technology and/or best practices to
streamline their legal operations in the next 12 months, according to
BDO’s 2019
Inside E-Discovery & Beyond
survey of senior in-house
counsel. That number climbs to 91 percent for organizations with annual
revenues of more than $1 billion.

E-discovery costs continue to grow, corporate counsel report.
Fifty-seven percent plan to increase their total spending on e-discovery
in 2019, more than double the percentage of those surveyed last year (25
percent). Large organizations, especially, are expecting to increase
e-discovery expenditures substantially (78 percent).

Corporate counsel actions in the past year suggest that a significant
portion of the increased expenditures will go to improving existing
e-discovery processes and procedures, while increasing the
sophistication of their methodology. Survey participants made several
changes in 2018, including adding or switching to cloud-based storage
(58 percent), adopting new tools and technologies (52 percent), and
implementing new guidelines or policies (52 percent). Sentiment
analysis, technology assisted review (TAR) and data visualization top
the list of technologies being considered for deployment by corporate
counsel who do not already use them. Technologies like data analytics,
artificial intelligence (AI) and robotics process automation, among
others, also likely will play a bigger role this year and beyond.

“A combination of too much data, too little time and heavier workloads
has made following traditional approaches to e-discovery virtually
impossible for the modern legal department,” said George Socha, EDRM
co-founder and managing director in BDO’s Forensic
Technology Services
practice. “As a result, organizations are
ramping up technology investments that can boost their productivity,
with the added benefit of mitigating digital risk. Moving to cloud-based
systems and adopting newer tools and techniques powered by data
analytics, AI, automation and other technologies, for example, can help
in-house counsel sort through complex information, make better strategic
decisions and discover what matters most more immediately.”

Critical to e-discovery success is good information governance, which
encompasses everything from traditional records management to compliance
and risk management, data privacy and cybersecurity, IT governance and
overall operational excellence. More than half (59 percent) of
organizations plan to increase their information governance spending
this year, up from last year’s 46 percent. Large organizations (78
percent) are taking the lead, perhaps due to the greater volume of
information they need to contend with, and/or their more global nature,
which makes them subject to more regulations.

“The increasing speed at which the business and legal environments are
changing today makes continuous innovation even more of an imperative,”
says Stephanie Giammarco, partner and national leader of BDO’s
Technology & Business Transformation Services practice. “From the EU’s
recently enacted General Data Protection Regulation (GDPR) to a
potential U.S. national data privacy law, to hundreds of other
regulations at the state and local levels, corporate counsel will not
only have to deal with the increasing quantity and complexity of
compliance obligations, but also greater standards of accountability and
transparency demanded of them from external stakeholders.”

In its fifth year, BDO’s 2019
Inside E-Discovery & Beyond
survey examines the opinions
and insights of more than 100 senior in-house counsel about changes in
their approaches to e-discovery, information governance, compliance,
data privacy and cybersecurity.

Other major findings from BDO’s 2019 Inside E-Discovery & Beyond survey

Data Privacy & Cybersecurity Are Top of Mind

  • Data breaches and data privacy rank in corporate counsel’s top three
    biggest legal risks with respect to data, cited by 54 percent and 42
    percent, respectively.
  • 59 percent implemented or updated their data privacy notices and/or
    increased their data privacy budget (51 percent) in response to the
  • 37 percent say navigating disparate, and sometimes conflicting, data
    privacy laws is the greatest challenge in managing cross-border
    e-discovery, followed by access to data (31 percent).

Corporate Counsel’s Evolving Relationship with
Law Firms

  • 36 percent are considering replacing their outside counsel with a new
    firm over the next 12 months. This percentage rises to 55 percent
    among lower middle market companies.
  • Law firms’ lack of innovation is the top complaint, cited by 29
    percent. This percentage rises to 39 percent among the lower middle
    market companies.

Regulatory Compliance Concerns Persist

  • 24 percent say keeping up with regulatory changes is their top
    personal challenge, a figure that rises to 38 percent among general
    counsel and chief legal officers and 35 percent for large
  • More than one-in-four participants (26 percent) cite regulatory
    compliance as their organization’s biggest information management
    challenge, after data privacy and security (32 percent). This figure
    rises to 42 percent among lower middle market firms.
  • 28 percent list regulatory activity (FCPA, ITAR, HIPAA, etc.) among
    the top three e-discovery-related issues that will have the greatest
    business impact on their organization this year.

The 2019 Inside E-Discovery & Beyond Survey is a
national survey conducted by Rabin Research Company, an independent
marketing research firm, utilizing Op4G’s panel of executives. Rabin
Research Company surveyed 100 senior in-house counsel at leading
corporations throughout the United States to collect their insights for
BDO’s fifth annual study. Respondents come from corporations with
revenues ranging from $100 million to more than $3 billion from a
variety of U.S. industries.


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