Can you achieve cost transparency with eDiscovery projects?

What does an eDiscovery engagement cost? In today’s legal marketplace, with increasing attention to cost transparency, it’s a question I’m asked frequently by clients -- a straightforward question that unfortunately has no easy or direct answer. Each eDiscovery matter is unique -- with distinct parameters and focus and variables, each of which will likely have a direct bearing on the cost of the undertaking.

So while you won’t find any trustworthy statistics on the cost of an “average eDiscovery” matter, there are factors that clients should be aware of when discussing eDiscovery support and budgets with vendors.

When I talk with clients, I advise them that specific information about the project at the startis the most essential component in building an accurate and itemized eDiscovery budget. Making sure we have as many details as possible, such as which steps in the process clients want us to manage and what phases they will handle, the volume of data involved, the workflow the client wants to undertake, the timeline required. Clear scope and expectations at the front end help eliminate budget surprises and client dissatisfaction at the conclusion of the project.

For example, here’s just a short sample list of considerations that contribute to creating a credible budget for eDiscovery initiatives:

  • What types of data are expected to be involved?
  • What amount of data needs to be collected? Where is it located? What are the date ranges?
  • Has any data been collected? If so, what kind of collection was performed?
  • As a result of that, what is the yield of data in terms of gigabytes?
  • How many custodians are involved?
  • How will password-protected files be handled?
  • How will data integrity be preserved during the extraction process?
  • What are some of the key word filters that are going to be used?
  • Who will manage the document review process -- the client or a third-party vendor?
  • Who will have quality control oversight for the project?
  • What is the production deadline? When is the review information due to the courts or to opposing counsel? In what format?

There are literally hundreds of questions that need to be asked -- and answered -- to understand the full scope of an eDiscovery engagement before a sound budget can be developed. All of that information is absolutely critical to being able to identify the required resources and right-size a team of legal and tech professionals with appropriate skills and experience that can effectively manage the project within the established deadline.  

But monitoring work progress along the way against budget estimates is also important. Typically, more accurate information is revealed once a project begins that replaces prior assumptions. A simple example -- perhaps the initial budget was based on an estimated average review rate of 40 documents per hour. But once work starts, team members find themselves reviewing 32 documents each hour, so the initial budget needs to be trued-up to conform to the actual review rate. Clients should expect that budget adjustments may be required during the course of a project when these kinds of realities become known.

While clients may desire greater cost transparency as they contract for eDiscovery matters, there’s unfortunately no pat pricing model that can be applied to eDiscovery undertakings due to the myriad factors and variables inherent in each project. However, by developing a comprehensive contract with a vendor -- including detailed identification of project scope, requirements, management and quality control responsibilities, and potential variables (and how any resulting cost adjustments will be handled) -- clients can expect to achieve a completed eDiscovery work product in a timely and cost-effective manner, and one that aligns with their requirements and expectations.

What strategies do you use to develop the most comprehensive and precise budgets for eDiscovery initiatives? Please share your comments below.