Friday, January 29, 2010

Iron Mountain's Stratify Acquires E-Discovery Company

Boston-based Iron Mountain Inc. reports that its California-based electronic discovery subsidiary Stratify has acquired Legal Imaging Technologies Inc., a San Francisco area company specializing in electronic document conversion and imaging processing.

Adding LIT’s processes and products into Stratify’s e-discovery capabilities will triple Stratify’s production capabilities in its data center operations that support the North America, EMEA and Asia-Pacific markets, according to Iron Mountain (NYSE: IRM) officials.

No financial details of the acquisition were disclosed.

Founded in 1993, Legal Imaging Technologies started as a high-volume, paper-based litigation support services company for firms located in the San Francisco Bay area. The company developed its own high-performance software tools that focused on efficient conversion, stamping, optical character recognition (OCR) and other electronic discovery processes as the e-discovery market grew, officials said.

Iron Mountain paid $158 million to acquire Stratify Inc., based in Mountain View, Calif., in October of 2007.

Monday, January 18, 2010

Lighthouse Document Technologies Raises $200,000

As noted in John Cook's Venture Blog.

Lighthouse Document Technologies -- a Seattle company led by David Rostov -- raised $200,000 in equity and debt financing, according to a filing. Rostov is the former chief financial officer at InfoSpace, Apex Learning, and Nextel International. The company provides electronic discovery services to law firms.

Friday, January 15, 2010

U.S. Legal Support Completes Acquisition of Array Technology Group

HOUSTON - U.S. Legal Support, Inc., a leading provider of full-service court reporting, record retrieval and legal placement & staffing services has announced the completion of its acquisition of Array Technology Group LLC, a premier electronic discovery, trial consulting and training services company.

“This acquisition is a significant step in U.S. Legal Support’s strategy to accelerate growth, enhance our coverage in targeted markets, and more importantly, enables us to offer a convenient, one-stop shop for our clients. With the acquisition of Array Technology now complete, we’ve added a fourth solution line to expand our portfolio of litigation services,” said Charles F. Schugart, president and CEO, U.S. Legal Support, Inc.

With 25 years of experience, and a complete line of litigation support services from discovery to verdict, Array will be blended into U.S. Legal Support’s litigation services. James Bruni, EVP of sales & marketing stated: “We will develop integrated plans that build on the U.S. Legal Support brand and provide clients with a more comprehensive line of products and service.”

Array’s president, Peter Sattin, will assume the role of divisional president of U.S. Legal Support’s fourth solution line and will be based in New York. Sattin said, “I have always believed that there are tremendous opportunities in the legal market for a firm encompassing best-of-breed products and services. The synergies gained by the combination of Array’s litigation and trial services with U.S. Legal Support’s core businesses and nationwide presence directly benefit our clients with a fully realized litigation resource, a complete relationship.”

Saturday, January 09, 2010

Gartner MarketScope for E-Discovery Software Product Vendors

Excerpts from the December 2009 research report found on Gartner's site.

E-discovery is a maturing market with entrants from multiple categories, including storage and archiving, search and information access, content and records management, and workflow, as well as tools designed as end-user applications for legal professionals and forensic data collection tools aimed at security professionals, regulators and law enforcement agencies. All of these categories of software vendors have added e-discovery to existing suites or purport to cover various aspects of the e-discovery process. There are also pure-play e-discovery vendors to consider.

Enterprises purchasing e-discovery software can reduce the costs of litigation by improving their control over unstructured content, and semistructured content, most notably e-mail. Our client references consistently report that they have cut costs and risks by taking control of litigation hold, litigation-hold-tracking, file collection, file processing and legal review, instead of outsourcing these functions.

Market Growth and Trajectory
The e-discovery product market received a boost from the recession of 2008 to 2009. Because all costs began to be scrutinized, including previously immune legal budgets, corporate legal departments had to start looking for a way to cut their costs. In addition to the recession, awareness of the 2006 changes to the Federal Rules of Civil Procedure (FRCP) in the United States (see Note 3) and parallel efforts on the part of the European Union, South Africa, Australia and Canada continued to grow among the legal profession, providing further growth stimulus. As a final impetus to growth, the Obama administration stimulated demand among government agencies, particularly regulators, by giving them a mandate to make government more transparent. In addition, in 2009, for the first time, our client inquiry showed accelerating interest and awareness of discovery and disclosure in Europe, particularly regarding privacy versus disclosure.

User Wants and Needs: E-Discovery Moves In-House
In 2009, enterprises became clearer about their actual needs and what part of the e-discovery process they wished to manage themselves. Enterprise demand began to coalesce around a set of features and functions. The consolidation in the market has been around a set of features and functions most desirable to in-house applications. As in previous years, we will use the Electronic Discovery Reference Model (EDRM) to describe both the process of e-discovery and how the vendors fit their products into the model. Despite some credible argument that the model is "not detailed enough," it still makes a good starting point for vendor categorization. The EDRM is shown in Figure 1, so that clients can reference it for the purposes of vendor analysis. The main deficiency in the model has proved to be that it lacks a definition of "early case assessment," which many vendors discuss, and which is high on the list of functionality that corporate buyers want.

Market/Market Segment Description
The criteria for vendor inclusion in this year's MarketScope have changed because the market has changed. The emerging nature of the market justified inclusion of smaller vendors in 2008, but this year's revenue cutoff of $15 million reflects the growing maturity of the players, as well as their consolidation and growing revenue bases. With the amount of interest and activity in this market, smaller players with interesting technology are likely acquisition targets. Without major differentiating technology, the barrier to successful entry into the e-discovery market became higher this year, and vendors without the budget to create awareness or to develop the necessary channels to market will not be able to rise above the "noise" around e-discovery.

Changes in the Vendor Landscape
There have been a few significant acquisitions in 2009. Autonomy acquired Interwoven, and EMC acquired Kazeon. Clients can expect more changes in the market, including mergers, acquisitions, exits, entries and repositioning. The predicted level of activity in the market is based on the facts that it is fast-growing, and contains large, established players and smaller, technology-rich startups. In addition, the evidence continues to accumulate that corporations can save costs and reduce risks by adopting e-discovery technology in-house, and so the growth of the market will continue. In these fertile conditions, a high degree of movement and change is inevitable.

By the end of 2011, as the market moves from emerging to early-stage consolidation, and the early adopters continue to report their results, there will be 25% fewer vendors in the e-discovery market as a result of mergers and acquisitions and vendors exiting the market.

Inclusion and Exclusion Criteria
To be included in this MarketScope, a vendor must meet the following criteria:

- Have a software product that can be licensed for implementation and use inside a company's firewall or by a third-party service provider.
- Cover at least three of the functional areas of the EDRM.
- Have e-discovery-related product and maintenance revenue of at least $15 million.

Added Vendors
We added EMC, CT Summation (Wolters Kluwer) and Concordance (LexisNexis) to this year's MarketScope. EMC's acquisition of Kazeon means that the two are now evaluated together.

Dropped Vendors
We dropped Nuix from this year's MarketScope as it did not meet the revenue criterion. We dropped i365 as the company has effectively exited the market.

Monday, January 04, 2010

Iris Data Services Acquires Lexsum, Inc.

KANSAS CITY, January 4, 2010 — Iris Data Services, a leading provider of eDiscovery solutions, announced today that it has acquired Lexsum, Inc., a regional provider of litigation support including document services such as copying, scanning, imaging and coding. Lexsum’s downtown Kansas City location at 106 W. 11th Street, Suite 100, Kansas City, MO 64105 will be Iris’ second metropolitan location; their national data center is in Olathe, Kansas. Iris Data Services is a leading supplier of electronic discovery solutions including tape restoration, computer forensics, eDiscovery, and online review utilizing their proprietary review platform, Unify™.

“The addition of Lexsum’s service offering and experienced staff solidifies our leadership in the Kansas City market,” said the president of Iris, Major Baisden. “Lexsum’s document services compliment our eDiscovery product offering, and allows us to offer end-to-end litigation support to area law firms and corporate legal departments.”

“We are excited about joining the Iris family,” said TJ Collins, former president of Lexsum and Iris’ new worldwide Director of Operations. “This will allow us to offer leading eDiscovery services to our clients, giving them one company to turn to for all their document management needs.” In his role as Director of Operations, Collins will oversee Iris’ worldwide production including offices in the U.S., China and Australia.