Estimate of US electronic data discovery market doesn’t jibe with the hoopla about spending

The 2010 Socha-Gelbmann Electronic Discovery Survey estimates the value of the electronic data discovery (EDD) “market in 2009 to have been about $2.8 billion, up about 10% from 2008.” The quote comes from Law Tech. News, Aug. 2010 at 1.

If total spending on outside counsel in 2009 by US companies was on the order of $100 billion (See my post of July 16, 2009: four estimates of spending on law firms in the US.), then e-discovery spending on vendors would account for something like three percent of that spending. That is nothing like the near-60 percent of spending tossed around in comments about total EDD spending (See my post of Oct. 24, 2007: cascade of 60% for components of legal spending, including discovery).

Manifestly and expensively, the amount that law firms charge for discovery work by their staff may close the gap to reach 60 percent of external spend by law departments in litigation, but at least we now have a responsible estimate for the discovery-related expenses of vendors.