Aug

Sure — you know what you’re spending on eDiscovery. But…do you understand why you’re spending it?
One of the things I do for my clients is to help them understand what and why they pay their outside firms to handle eDiscovery. The goal is to get a handle on costs and identify where new approaches can reduce costs and still achieve the most desirable outcomes.
So, what does that process look like, Kelly?
During that process, I evaluate the approaches taken by a firm to identify, preserve, collect, review, and produce ESI, and advise the client (and sometimes the firm) on where cost efficiencies can be found. That means reviewing the approach and associated costs within a piece of litigation. Our first stumbling block generally comes when we try to identify the costs of eDiscovery for the litigation in question because they aren’t tracked in a way that makes extracting any real data possible. Law firms send a bill with hours and itemized costs, and that’s it. Vendor invoices to the law firms aren’t much better, although some will break costs down if you ask nicely, but those aren’t usually passed along to the client unless you ask. Reviewing lawyer bills is messy and takes time and energy. It’s not really worth the effort, either, because allowing you to track eDiscovery costs wasn’t the goal of the attorney writing his time charges.
And the goal would be…?
Metrics. If you want to reduce costs and improve outcomes, you have to track eDiscovery metrics. Tracking eDiscovery costs (or metrics, as we eDiscovery geeks call them) requires actively tracking eDiscovery work, not just letting the ABA codes that a lawyer assigns to a billing entry or vendor invoices tell you what you are paying. Tracking metrics help you:
- Budget Better for eDiscovery AND Litigation. If I know how much I average per custodian for ESI for a particular type of matter, I can budget that at the start of the case, and then deal with any anomalies.
- Control costs. Knowing how much something costs (i.e. producing info for 20+ custodians instead of 10), allows me to negotiate the scope of preservation and production to what’s reasonable and use real dollars to talk to opposing counsel or the court about undue burden (i.e. why you shouldn’t have to pay so much).
- Calculate ROI for New Technologies. If I know how much it costs to follow process A for 10 custodians, and I want to try a new technology with process B — like technology assisted review — I can compare the costs of the two approaches as well as the results (cost vs. number of relevant documents) and understand what value I get from the technology.
- Tell you whether investing in technology internally would be of value for the organization. Don’t misunderstand me here — I have yet to find a product that was so compelling that I would recommend bringing it in-house behind a firewall. Technology is changing so rapidly that you’ll be out of date before you get it installed. And, IT groups are getting smaller, not larger, so the manpower to babysit that technology likely won’t be there. I’m talking about cloud-based services that can potentially add a ton of value to your eDiscovery process and information management without adding overhead.
Ready to get started? Follow these three steps:
- Determine what you want to track. You need to know what you are looking for and backtrack to how you get it. You have to prepare the folks doing the work up front for tracking — not in the middle, and definitely not at the end of the case.
- Get a process in place to start tracking. That means talking with outside counsel on a matter and coming up with a system that allows you to capture the data you need. Options might include requiring either task billing or that specific areas (i.e. document review, collection procedures, etc.) are broken out separately from the regular billing. Battling the existing ABA code structure (that does not include any codes specific to eDiscovery) can be harder than you think. If you use an online system that requires the ABA codes, you’ll have to manually add new codes, or work with the developer to do it. If that’s the case, you should consider having a system outside of the usual law firm billing process that allows you to track metrics. Think it sounds like too much work? Try it in one case and see what you learn. I think you’ll be surprised.
- Analyze your findings against other cases, industry norms, etc. See how what you and your outside counsel are doing measures up. Use the findings to encourage better practices at your outside law firms. This isn’t their specialty, and you need to make sure your needs are met. As technology advances, there will always be new and better ways to handle data to get to that needle in the haystack faster and cheaper, and metrics will help you take effective advantage of them.
So — what metrics do you want to track and how do you track them? You don’t need a complicated system to track — something as simple as a spreadsheet can work. Create a new tab for each case, and a master tab for average metrics.
Here’s a start with what you should track — keeping in mind that different types of cases will impact the list:
- Amount of data collected per custodian/per device/source
- Cost of collection per custodian
- Amount of data (in GB) culled per custodian prior to processing
- Processing costs per GB/per custodian
- Total review costs (then break them down per GB and custodian)
- Review cost per document (helps you evaluate benefit of outside firm vs. contract review)
- Review cost per custodian
- License fees for review platform
- Rates for other software to index, filter or cull data
- Data hosting costs monthly/annually per GB
- Cost to OCR per page/total cost
- Cost to create TIFF/PDF images (heaven forbid that you decide to do this)
- Cost to produce production set from review platform
A good vendor/provider will help you do this — they can break out these statistics with ease for you depending on the process and how much they control. Think about that too — that to gather metrics, you may have to spend a bit more initially to save ten times that down the road. You have to spend money to make money right? Same concept.
Tracking metrics, like all good things, requires planning and process management. More often than not, my clients find that they already have existing resources in-house who excel at tracking data and with proper guidance and expectations, can get a system in place to start tracking data and understanding costs. And, as the volumes of data we create are set to double every five years, the need to control costs in eDiscovery will only get bigger.
Metrics are your friends in eDiscovery. Institute some tracking and you’ll save money in future cases.
You can take that to the bank.
- Tagged: e-discovery, eDiscovery costs, eDiscovery metrics
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