As many have noted, 2010 was a transformational year for eDiscovery. It was the year of Pension Committee, Victor Stanley II, and other bellwether cases. It was also the year that highly automated eDiscovery review technology, such as Predictive Coding, came into its own, with some of the world’s most important law firms adopting it for daily use.

Looking out at 2011, it’s clear to us that strict new federal regulations will only accelerate the trend toward automating eDiscovery review, while the relentless growth of enterprise data will increase the drive toward a more holistic view of information governance.

Here are some of the trends we foresee driving eDiscovery in 2011:

Regulation will pass litigation as the main driver of eDiscovery software purchases

Since the financial crisis of 2008, the pendulum has swung toward increased regulation in a way not seen since the 1930s. Then, the country saw the creation of the Securities and Exchange Commission. Today, regulators are more involved than ever in the everyday operations of businesses they regulate.

The full effect of increased Federal Reserve oversight will come as an unwelcome surprise to many in the banking industry. As any Fed-regulated entity can tell you, it’s a whole different world, with the Fed often literally moving into the offices as a constant presence. As someone once said, “Being regulated by anyone else is like visiting home for Thanksgiving; being regulated by the Fed is like inviting your mother-in-law to live with you.” The Consumer Financial Protection Bureau will probably take a similarly intrusive approach.

Even when not physically present, regulators can make a huge impact on a company’s business. For instance, a Department of Justice document request regarding a bribery allegation would require dramatic and immediate action. A company receiving such a request needs to produce documents much faster than it does in litigation, where deadlines are already tight. Courts want documents quickly. The DOJ wants documents now. That’s why, from an enterprise perspective, regulation is a lot like getting sued, but worse.

All told, the current regulatory environment has to rank in the higher quadrants of any large company’s 2011 risk assessment.

Regulators gear up

As a result of their increased enforcement activity, regulators around the globe will have more data to process than ever. And despite the common conception that the government possesses unlimited resources, most regulatory investigations are assigned to a single attorney.

The only way that agencies can fulfill their new mandate will be to invest in software that allows them to quickly winnow large sets of data down to the relevant documents. This kind of software, already in use by many regulators, will become a necessary adjunct to regulatory efforts. And since regulators will be using highly sophisticated solutions themselves, they’ll expect companies to meet those standards as well. As a result, the regulatory drive toward modern review techniques will be a key driver for enterprise usage.

via An Outlook on eDiscovery – Trends To Watch in 2011 | CIO – Blogs and Discussion.