I have made it clear in an earlier article that analysing the detail of company accounts is neither one of my strengths nor my interests. One has to pay some attention, however, to an announcement which reads Epiq Systems announces 2011 second-quarter results led by eDiscovery operating revenue growth of 96%.
Epiq Systems acquired Encore Discovery Solutions on 4 April 2011, so this quarter’s figures are complicated, on the one hand by acquisition costs and on the other hand by a new revenue stream. I will leave you to read the figures for yourself, but I draw attention to the emphasis given in the notes to “the strength of Epiq’s organic growth across the heritage eDiscovery business”. Epiq was doing well anyway, in other words, even without the Encore business. When the two strands are added together in a strengthening eDiscovery market, the results are impressive.
As always, I am more interested in what we can deduce about the market generally than in any one provider’s figures, and more interested in what the company’s senior people say in conversation than in the necessarily stripped-down accounts notes. I pick Epiq in part because it provides a balance to the spate of articles from me and others whose focus has been the sophisticated technology of predictive coding. I have another long article coming up on that, but it is important to emphasise (as I have done in my articles) firstly that not every case needs a sophisticated technology solution and secondly that the key lies in understanding the range of options available. Epiq’s IQ Review process and its proprietary review tool DocuMatrix offer predictive coding by the incorporation of Equivio’s Relevance product. They also, however, have a document review service and, with the acquisition of Encore, open the door to a wide range of applications – an antidote, therefore, to the idea that it is predictive coding or nothing. I will have more articles to similar effect shortly.
I spoke to Greg Wildisen, Epiq’s International Managing Director, and he went straight to this point. He did not give me the details, but a recent case handled by Epiq had required that a population which grew to 80,000 documents over the short life of the project had provided a good example where the balance of time and cost considerations had required a concomitant balance of human review and technology. Neither would necessarily have done the job on its own within the budget and timeframe, but a consultative approach and good project management had brought in the right resources at the right stages to get the job done. This is a point which goes wider than just Epiq – someone must have an overview.
That led our conversation to cross-cut into the other hot topic of last week, that of ediscovery certification. In my article Ducking the eDiscovery Certification Battle I had referred to “people who move sideways from other areas – people with skills we need who will not have formal [eDiscovery] qualifications”. Greg Wildisen said that Epiq had been recruiting exactly this kind of person, mainly from IT and legal backgrounds, to fill the key project management role. Project managers, as he put it, “lie between us and the client”, which gives them a critical role in implementation. You retain good people, he said, partly by giving them interesting things to do but also by adding continually to their skills and knowledge.
I asked him about the Encore integration. He said that the focus is very much on emphasising that clients are dealing with one company. The ability to offer DocuMatrix or, say, kCura or Clearwell (see Encore’s strategic alliances page for a full list of the candidates here) is extremely valuable – as Greg put it when I spoke to him at the time of the acquisition “the customer does not get upset by having more choices”. As it happens, I had a long presentation from kCura last week and heard the same story about attracting and retaining employees and about the importance of kCura’s partners – Epiq apparently has one of the largest numbers of active kCura users.
Epiq’s Q2 figures showed that whilst eDiscovery work had increased by the enormous 96% headline figure, corporate bankruptcy was down, presumably because the first big wave of failures had already happened. Greg and I spoke in a week of further bad economic news and on the day that Standard & Poor’s were expected to downgrade the USA’s rating, as indeed they did. it seems likely that Epiq’s Q3 figures will show bankruptcy work up again without any decline in eDiscovery.
I asked Greg Wildisen about Epiq’s Asian business – I am off to Singapore this week for the International Conference on Electronic Litigation being run jointly by the Singapore Supreme Court and the Singapore Academy of Law, and was keen to catch any information about developments in the region. Greg said that Epiq’s Hong Kong office is seeing a growing number of enquiries, which matches what I gather about other players in the region.
As I said in opening, the feedback from any one provider is interesting mainly for what it says about the growth of eDiscovery work and awareness generally. I will look at others which point to useful conclusions over the coming months. Some litigation, of course, is optional, and a double-dip recession, if that is what we now face, may affect that. Regulatory and investigations work cannot but increase.