What Happens When Your eDiscovery Vendor Is Acquired?
Monday, June 12, 2017
Posted by: Deja Miller
Extract from Casey Sullivan's article "What Happens When Your eDiscovery Vendor Is Acquired?"
The eDiscovery world is consolidating at a rapid pace. May alone saw Morae Legal merge with Clutch Group, Xact Data Discovery acquired by F1 Discovery, Discovia merge with Lighthouse eDiscovery, and Altep bought up by Advanced Discovery. That’s four notable eDiscovery M&As in just a few weeks—and that’s just the most recent history. A database of eDiscovery deals put together by Complex Discovery shows well over 200 M&As over the past several years, from billion-dollar acquistions to small mergers. Given the increasingly thin margins by which vendors are operating due to increased cost pressure from clients and a glut of supply (newsflash: we didn’t need 200 vendors in the first place), the rate of consolidation will only accelerate from here
So, what happens when your eDiscovery service provider is acquired? No, seriously, we’re asking -- because there doesn’t seem to be many clear answers out there.
3 Questions to Consider When Your Vendor Gets Snapped Up
What Happens to Your Vendor Contacts?
Given the rate of consolidation, there are a few M&A areas of concern all eDiscovery customers should be thinking about. The first relates to people. In the managed services model of eDiscovery, project managers often play a central role in the discovery process. They’re the ones who create your discovery workflow, manage data ingestion, assign hibernated subcollection fees, and the like. Some take a hands-on role throughout the process, some limit their involvement to mostly administrative matters, but all are more or less essential. Keep in mind that the value of the project manager is generally proportionate to the complexity of the tool. This is, after all, how vendors get you: sell you the technology and then sell you the person who can work it.
So, if your vendor merges with another company, what happens to your PM? She may be out the door. The same could be true of your account executive. According to Pete Smith, VP of business development at TRU Staffing Partners, there’s “no doubt” M&As result in “duplicative roles… specifically at middle management levels and in sales.”
“Those are the two areas at greatest risk for attrition and lay-off during this period of consolidation that we live in today,” Smith recently told Corporate Counsel. Those who aren’t made immediately redundant may seek out more secure opportunities elsewhere. “Mergers usually lead to speculation and uncertainty about future job security, culture change, and status for those in the rank and file,” according to eDiscovery vet Kristopher Wasserman.
If a M&A sends your PM packing, will your discovery workflow be left in the lurch?
Read the full article here