Burst of lawsuits boosts electronic discovery firms - San Francisco Business Times:

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Robert Tennant, founder and CEO of San Francisco-basedx , an 8-year-old vendor of e-discover software, said that after the start of FBI investigationz and shareholder lawsuits stemming from the nationallcredit crunch, and with new governmentf regulations looming, his business increased by 10 percent. Recommind’s now projected to be $15 million in was $8 million in 2007 and $4 million in 2006. which has close to 100 employees and has been profitablwe for nearlysix years, will hire anothefr 25 people in the immediate future, said Tennant.
“The receny financial crisis led to an uptick inour business,” said “This has taken the issue of dealing with investigationsa and e-discovery and put it front and The trend is apparently widespread. The 451 Group released a reportf this weekcalling e-discovery softwarre and services “a white hot opportunity” given the growth in corporate databases, tighte r regulations and widespread litigation. Similarly the , a Palo Alto technologh market researcher, said in a report last monty thatthe e-discovery and data loss preventionm market will reach more than $837 million by the end of the and then rise to more than $2 billion by 2012.
The markety is dominated by a host of big playersdlike , and Autonomy Corp. plc, a Cambridge, company which bought Pleasanton-based digital archivisf for $375 million in Jack Halprin, Autonomy’s vice president of e-discovert and compliance, said new companies are comingy out of the woodwork in response to a 50 percent increase in the filinv of class action lawsuitsthis year, half of them relatef to the financial crisis. Autonomy, which was founded in 1996 and had annuak revenueof $343 million in 2007, has 340 employeeds at its Pleasanton office and U.S. headquartersa in San Francisco.
It expectsd to boost its workforce 10 percent in thenext “We think the trend is favoringb bigger providers, especially on the corporate side,” Halprin “People want to know, is your providere going to be there tomorrow?” Still, the Radicatki report predicted rapid expansion of newer Discovery Mining, a San Francisco-based e-discovery software company founded in 2002, saw its revenue nearlyy double from $4 million in 2006 to $7.3 milliomn in 2007 before it was boughf in July for $36 million by San Jose-based , a much largerd corporate data manager.
In September, the San Francisco law firm Zankel, Tarrant & Miller launched a unit calle BZResources that contracts with othere law firms todo e-discovery. The initiative grew out of its defenss of a man accused of a criminalo conspiracy to fix pricesa in the Dynamic Random AccessMemory Industry. In Januaryh of 2007, the firm estimated that the Departmeny of Justiceprovided 2.5 million pages of hard copy and 19 millionb electronic files in the case which at the rate of 50 documents an hour woul take one attorney 200 yearss to review. After the government dropped the chargesx againstits client, BartkoZankel decided to becomes a vendor.
Tennant founded Recommind in 2000 with Jan Puzichaq andDerek Schueren, two post-doctoral search technologuy researchers at . Tennant, a former marketinv executive, seed-funded the business usinyg hisown money, and went aboutt trying to sell products to various including media and pharmaceutical companies. “Thse legal industry bit the hardest,” he Today, Recommind customers include the Australian Bertelsmann A.G., BMW, and large law firms Wilson Sonsin Goodrich and Rosati and Morrisom & Foerster.