If nothing else, Attenex has perfect timing. The company spun out of a law firm that specializes in digging through mountains of documents to find the specific information you need.
Formed in 2000, Attenex designs data-discovery and review software for companies and industries that frequently have to dig through terabytes of data. Its flagship product, Attenex Patterns, is an integrated software suite that includes an electronic document-processing engine, project management functions and document review tools to filter out the unnecessary documents.
Attenex CEO Kimra Hawley knows a thing or two about document management. She was the founding CEO of ActionPoint, which later merged with document-management firm Captiva Software. Hawley was the chairman of the combined company until EMC acquired it in 2005. Most recently, Kimra was the CEO of electronic publisher iUniverse.
Q: Tell us about Attenex.
It stands for “a 10 x improvement.” Attenex was founded with the goal of achieving a 10 times productivity improvement for the e-discovery process. It’s sort of a funny name but that’s the history of where it came from.
There’s been a lot of attention in a number of journals … warning corporations that they were responsible for knowing where all their data is, for having a defensible process they can use to produce that data when someone is asking for it, whether it’s a government agency or a plaintiff’s attorney in a lawsuit, and that they needed to treat electronic discovery as another business process. The methods they use to produce the data needs to be auditable and treatable.
Q: You say the name means a 10x improvement. A 10x improvement over what?
Over the historical way of having electronic documents appear one at a time in front of an attorney that’s going to review every single document. What the software does is enable the attorney to not have to look at every single document, so he can say “Oh, this is a whole pile of documents about doughnuts in the lunch room; there’s no reason for me to read these.”
Historically those documents would have come through and the attorneys would have been forced to look through every one of those.
Q: How much, if anything, does this have to do with Sarbox?
It’s tangentially related because there’s a number of requirements and oversights that regulatory agencies have as part of Sarbox that require organizations to produce specific data. So yes, the methods companies are establishing to do electronic discovery are being used for everything from litigation to regulatory response to regulatory compliance. Any time you have to go through millions of documents to find the critical info, that’s what e-discovery is all about.
Q: Who do you consider to be your competitors?
Attenex is a software company, which is pretty unusual in the marketplace. Most of the vendors in the e-discovery marketplace are service providers, so we compete against folks like Kroll, a subsidiary of Marsh and Applied Discovery, a subsidiary of LexisNexis.
What these folks do is provide discovery as a service for corporations, but they are typically focused on doing things on a matter-by-matter basis. So imagine if a company had a very large lawsuit, they might hire a service provider like Kroll to help them collect the information, review the information to find what’s relevant to the case and produce it so the attorneys on the other side could review it.
Q: It’s surprising you would bring in someone from the outside to review your data and not be able to do your own digging.
Bingo. Very perceptive point. Historically, that is the way these issues have been managed.
Prior to the advent of a lot of regulation, and Sarbox is part of that, organizations tended to view elect discovery as a necessary evil that came along once in a blue moon, with a bet-the-company-style of litigation. So they didn’t see it as a recurring event, something they needed to do over and over again. So they hired outside law firms, which would subcontract out to a large service provider like Kroll and hoped that it never happened again.
Q: I’m guessing they had the similarly casual approach to their data, a toss-it-all-in-the-attic approach to things.
Exactly. So, there’s been a number of things over the last two or three years. There’s been some very large judgments that have come down against large corporations.
There are fines for not being able to produce data, not being able to know where it is, and most recently we’ve had this federal rules change, so it’s not only case law but federal law, that corporations now have to take responsibility for this and treat it as yet another business process because it is a recurring event.
They do have to produce this information over and over again, largely because of the business-compliance issues in the marketplace. So we’ve seen a huge interest in large corporations, particularly those that are highly regulated like financial services, pharma, communications and energy, because they have so much regulation and, unfortunately, because they get sued all the time, are leading the charge on this.
Q: How does the software work?
When many corporations start down the path, they think it’s only a records-management problem, and they have not thought about what happens after that. Finding the data you need is really just the first step.
The most expensive and time-consuming part of this whole process is reviewing that data because, typically, the data needs to be reviewed by attorneys that go for $300 to $500 an hour. What you don’t want to do is drop a terabyte of data onto a law firm and let them start peeling through it at 300 bucks an hour.
You need software tools to help reduce that data down to a manageable amount, by doing things like extracting system files, getting rid of duplicates, what have you, but then have a tool that lets lawyers very quickly sift through the data that may be relevant to the matter at hand and find the relevant documents really quickly. And that’s the piece that Attenex does.
But then the next step is to go in and concept analyze all of these electronic documents and be able to quickly show to an attorney which documents are about which concepts so they can narrow in quickly about the concept they are more interested in finding out.
Q: What size market are you after? Any and all or particular markets?
The markets we’re focused on are primarily large corporations and these highly regulated industries, so financial services, pharma, communications and energy. So those are the areas we’re primarily focused on, because those are the ones with the biggest headaches right now.
Q: Being as small as you are, can you compete with these huge services firms you mentioned earlier?
We can because we offer a very different solution than what they offer. These folks tend to be involved on a case-by-case usage as opposed to providing a set of software tools that a company can build a repeatable business process around.
What Attenex provides is that set of software tools that enables companies to build a repeatable and defensible business processes around, and we give corporations a choice. They can either install the software behind their firewall and run it all by themselves, or they can choose to run parts of it at any of our 29 service providers that can provide the software in a hosted model.
What we’re finding is even corporations that want to get started using the software and build around using it in a hosted model, they like being able to bring it back in house. Getting back to the original point you made, letting their data go outside of their corporate firewall is a risky thing for them and they prefer not to do that if they had a choice.