Epiq Global and its 6,000 staff have had a tough few months. First there was the ransomware attack that effectively shut down the eDiscovery division’s work for several weeks. Then, just as it was emerging from that crisis, the Coronavirus lockdown hit, closing courts and slashing litigation review activity, leading to layoffs at the company.
As Epiq confirmed to this site it has indeed sacked staff, with ‘most, but not all’ of those job losses in the US.
It’s certainly been significant enough to cause a major ripple through the eDiscovery community. But, it won’t go into the numbers. This is what they said to AL at the end of April:
‘Companies that can quickly adjust to the new ‘norm’ stand a better chance of making it through and being in a strong position over the long term. As such, we’re taking steps to prepare for the slowing demand in some segments of our business. These changes will not reduce our ability to provide superior service to new and existing clients.’
These are not the words of a company that has let go of just a handful of people. Talking about ‘making it through‘ the crisis is serious stuff for a business that large.
For each and every single person who has lost a job through no fault of their own, it’s a terrible time. Especially now, as with a drop in legal market activity it will be hard to find a new gig for some months to come.
But, what about Epiq’s long term outlook? Is this all a sign of an epic fail that marks a downward trajectory? Here are some thoughts, not just on Epiq, but on the broader eDiscovery sector.
Sprained, But Not Broken
A company that has around 6,000 staff globally, three main divisions that go far beyond eDiscovery, and with 70 offices – – – – yes, 70 offices around the planet, having to let go of even a few hundred staff members during the biggest economic crisis since 2008, and perhaps even since 1929, is not a signal of a corporate collapse.
If we’re going to look at this through a corporate and market analysis lens, then Epiq is still very much standing. Also, if we look at other companies in the same space e.g. Disco, there have also been cuts. Meanwhile, although not all have hit the media, you can bet many other legal tech and legal sector companies have also sacked staff, again, as you’d expect in a major downturn.
And, to give some context, here is what Rick Merrill, CEO of litigation analytics company, Gavelytics, said about the situation in the US: ‘Many court systems have entirely closed or, if open at all, are operating on a very limited basis. This includes both state and federal courts in the US. Since litigation has slowed to a near halt, it’s not surprising that litigation support services that have project-based business models (like most eDiscovery companies) have seen considerable drops in revenue.’
However, he added, that unlike some companies they hope to get through this OK.
‘Companies that instead have a subscription-based business model, like Gavelytics, are less likely to see sudden revenue drops since customers are on annual or longer contracts. For us, we’ve seen no slow down in revenue at all, but have seen usage rates of our product decline somewhat since so much litigation is simply on hold,’ Merrill added.
Plus, if we look at the legal market as a whole, law firms have been letting go of staff, putting people on lower hours deals, cutting salaries and generally behaving as one would expect in a serious downturn.
In short, while every job loss is an awful experience for those on the receiving end of such decisions, in the wider context it would be strange for a company with 6,000 people, totally dependent upon activity in the court system, not to cut staff.
Coming Out of This
And yet…..some believe we will soon see a massive surge in disputes heading to court, many related to insurance claims and other breaches of contract triggered by the virus lockdown’s impact on the flow of business. And that makes sense.
Artificial Lawyer put this to Epiq, i.e. despite this setback, aren’t we actually about to see an increase in demand for their services?
‘We do expect business to pick up in Q3, and are beginning to see some pick up in business among existing clients for not just eDiscovery, but for solutions provided by our other businesses as well, including bankruptcy administration, contract review [see recent story about working with legal AI doc review company Diligen] and digital mail,’ the company told Artificial Lawyer.
And, won’t the return to activity be even more pronounced once the courts open again, even if they operate with strict social distancing and with plenty of activity handled via remote video calls?
Roger Pilc, president and general manager, Legal Solutions at Epiq, told this site: ‘We’re optimistic for the second half of the year. Any eDiscovery work impacted now by court shutdowns will be delayed, not cancelled. We also anticipate additional eDiscovery and contract review opportunities due to COVID-19-related litigation, shutdowns and business dislocation.
‘Further, the need for legal transformation services will grow as the demand for spend analytics, legal process consulting and digital transformation work increases. In our current environment, law firms and corporate legal teams now more than ever need to dial-in spend and look for ways to scale work going forward. Related to this, we also see AI-based projects increasing 35%, on par with the growth Epiq witnessed in this area with clients last year.’
In short, the future looks positive – which of course is of no help right now to people who have lost their jobs and are worried about paying their rent.
But, again, if we step back from the individual and look at the market, this suggests that not just Epiq, but the whole eDiscovery sector will pick up again later this year. So, there hopefully will be more opportunities for people to get back into work and find new jobs.
Of course, it’s fair to ask: if things will pick up, why sack people now? Why not just wait until things pick up and ride this out?
The simple answer is: this is all just hope, Epiq and others don’t know for sure it will all bounce back. If a large company doesn’t cut costs then it risks getting into even deeper water later on if things don’t pick up, and that could mean a catastrophic outcome for the business as a whole, taking way more jobs with it than has happened right now.
An ‘Epiq fail’? The conclusion has to be: no. Unlucky, yes, and awfully hard on the people who have lost their jobs. But, a herald of doom? Nope.
Artificial Lawyer really hopes that the expected surge in work in Q3 does arrive, and that everyone in that part of the legal market gets a new role. Here’s hoping.
How Epiq is structured:
- 6,000 globally across all three of our businesses:
- Legal Solutions (data collection, forensics, information governance, eDiscovery, document review, data hosting);
- Class Action Remediation and Restructuring (class action, mass tort and bankruptcy administration;
- and Global Business Transformation Solutions (outsourced services to law firms and corporations, including records management, office services, technology enabled solutions, hospitality, information technology management, document management support, and digital mail) across 500 client sites.