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How to Increase Cost Predictability in eDiscovery

The rising cost of eDiscovery spend is a burden for many legal departments but surprisingly, few companies can accurately estimate and budget their annual spend on eDiscovery. This is a cause for concern; how can you improve on your eDiscovery efforts and increase accountability on litigation spend if you do not understand the full picture of eDiscovery? One of the best ways to fully optimize eDiscovery is to increase your cost predictability. In other words, your team should be able to accurately calculate the total project cost of eDiscovery for your company in order to create efficiency and reduce the overall cost of litigation.

We recommend a three step approach to increasing cost predictability in eDiscovery:

  1. Start by understanding the full process – In general, eDiscovery can be broken down into the four main stages: data collection, data processing, document review, and data production. Analyze how much your company is spending at each stage of eDiscovery in order to accurately estimate your annual spend. This process may be seem tedious but you will be able to eliminate inefficiencies from the get-go. For example, document review is often the most expensive portion of eDiscovery – most legal departments estimate document review accounts for 80 percent of the total eDiscovery costs for the average case. Reviewers are often paid on a per-hour basis, which contributes to both high costs and the difficulty of predicting them. However, many third party service providers are offering alternative value-based fee arrangements to help legal departments accurately predict and manage the costs of document review.

  2. Optimize your Vendors – When it comes to comparing and negotiating between vendors, legal teams rarely leverage proportionality and miss opportunities to lower costs. It is essential to look at potential data volumes and estimate costs based on historical metrics and productivity. How much is your spend per gigabyte of data ingested? How much is the service provider actually charging you per gigabyte of data ingested or is there a value based fee arrangement available? Having that information in hand prior to review will help your company select suitable third service providers and increase the efficiency of your eDiscovery spend.

  3. Think Long Term – You may not be able to fully reduce your cost of eDiscovery this year, but you can set measures now towards improving those metrics. However, creating a truly cost effective yet highly defensible eDiscovery program for your company requires a highly strategic mindset. Start with the end goal in mind and ask: how does eDiscovery help your litigation?

Legal teams need to gain critical insights from the very beginning of the eDiscovery process. By increasing these opportunities earlier in the process, you can build a stronger case strategy and thus optimize for the high cost of eDiscovery. Build your eDiscovery program to maximize for responsive legal intelligence – keeping this as your overarching goal can help you make clearer decisions and increase efficiency.

When it comes to efficiency in eDiscovery, one needs to be vigilant. Ask constantly: how much does this cost? Are we tracking the costs and fees? Why are we spending x amount on this and what value does it add to the process? Take strong measures to improve your cost predictability in eDiscovery now and reap the rewards in the long run.

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