We have discussed this conundrum with compliance practitioners, strategic partners — including AWS — and within FINRA and SIFMA industry forums. The most common barriers and challenges being expressed include the following.

1. Perception of data security in the cloud

Data security remains a top challenge for discovery decision makers. While this shares many of the same concerns regarding cyber threats and potential data loss, it also underscores the movement of ever-expanding volumes of heterogeneous data, both in managing multi-step e-discovery workflows as well as the larger decommissioning and migration of legacy data sources.

2. Increased complexity of data privacy mandates

Cross-border litigation has always had its share of possession and control challenges. This became even more complex with the striking down of the U.K.-U.S. Privacy Shield and the increase in the number of specific data-protection regulations springing up around the world.

This is now joined by the chorus of U.S. states passing their own privacy regimes, including California, Virginia, Utah, and others likely to follow soon. Managing cross-border discovery with on-premise tools was difficult enough. Identifying, filtering and extracting data stored in potentially multiple cloud storage locations can increase that complexity exponentially.

3. Inadequate/unfamiliar discovery features

Legal document review and other discovery tools are a very mature market category. Moving from a first generation of on-premise tools to legal service program (LSP) datacenter-hosted email review platforms introduced new features and methods of access. This required time to adjust discovery workflows.

Another move to a next-generation of cloud-native discovery applications will create the same uncertainty and feature-set change that comes with the introduction of any new generation of technology. This is even more true for tools that are designed to address the unique nature of today’s collaborative, social and mobile content sources.

4. Discovery tool throughput

Ultimately, discovery teams need to quickly ingest, preserve, review and export large volumes of data to meet non-negotiable deadlines. Any limitations imposed by cloud-based services, such as throttling to limit data volume per task that can be concurrently processed, can have significant costs and contribute to negative outcomes in litigation.

The uncertainty of whether discovery cloud services can function at peak demand levels is difficult to discern via vendor demos and can require proof-of-concept for discovery teams to become comfortable.

5. Economic justification

Discovery economics is often considered as an operational “‘cost of doing business,” and has expense lines spread across multiple departments. Gaining a holistic view on the total cost (measured in hard cost as well as productivity implications) can be difficult to estimate, which in turn makes it hard to attain ROIs from legal teams that support a move to the cloud.