As the amount of discoverable data and electronically stored information (ESI) grows and the complexity of file types increases, the tools needed to meet and anticipate these challenges also must adapt. 2024 presents an opportunity to take advantage of new technologies in an effort to reduce costs and process data faster than ever before.
Managing ediscovery costs has become a hot topic amongst legal teams. There’s hardly any guidance from courts regarding skyrocketing prices, and many firms have been forced to pass rising costs on to their clients as a result.
So, what is the true cost of ediscovery, and what does the price tag mean for your case? How can you protect your firm (and your budget) from inflated prices? Although it can be difficult to provide specific price ranges without knowing the ins and outs of a particular case, it is possible to at least estimate ediscovery costs based on certain factors, and strategize ways to keep costs down.
Price vs. Value
Price and value are two key components to consider when assessing ediscovery costs, and an important delineation to make. While the price is what you pay for ediscovery, the value is what you get in return.
When it comes to ediscovery software, you might pay a high price for the most comprehensive solution, but the value in return might not be great if all the bells and whistles aren’t necessary or suited to your needs.
Finding that perfect marriage of price and value can take time, but building a relationship with an ediscovery software provider can help drive down ediscovery costs and greatly benefit your organization.
What Drives Ediscovery Costs
While there isn’t one single factor that contributes to rising ediscovery costs, there are drivers that account for a significant proportion of the total price tag.
The document review process is the primary driver of ediscovery costs. According to the American Bar Association, it accounts for over 80% of total litigation spend, which is equivalent to roughly $42 billion per year. Determinants like your chosen ediscovery software, the amount of documents needing review, and whether you’re able to do the work in-house can make the price vary, but there’s no getting around the fact that the entire document review process will take up the majority of your typical litigation budget.
This is a concern for the entire legal industry, as the increasing amounts of data in our expanding digital world means the amount of information required for review during the discovery process will only grow in 2024.
Data Type and Size
The specific types of data also play a huge role in the price of ediscovery. For example, a simple word document will likely cost less to upload and process than a CAD file or Slack message because of its relatively small size and straightforward search capability. A more complex file might require additional tools and time to process, adding to the cost. If your data is full of these complex files, it will be a significant expense during ediscovery.
Similarly, having a large amount of data sets will take extra time and money to process as well. Data collection can be an arduous task, and the more there is, the more time it will take to gather, and the more expensive it will be.
According to the RAND Institute for Civil Justice, it cost $18,000 to manage one gigabyte of data through the entire review process in 2012. Contrast that with 2024, when most ediscovery software charges rates based on an all-in, per-case or per-month billing cycle that average around $25 per 100 gigabytes, and you can see how advancements in technology have provided huge savings.
With so much data to process and documents to review, there has to be staff on hand to actually do the work. Many firms do this through contract attorneys, who are brought on solely to assist during discovery for a specific case.
Hiring, onboarding, and training contract attorneys is an expensive and time-consuming process that can leave you lagging behind. For example, with the average hourly rate for a contract attorney at a little more than $50 an hour, you’re wasting over $2,000 for every week spent learning a new software, and not working on your case. As the volume of data grows, an intuitive, easy-to-use ediscovery software is imperative to helping these contract attorneys get working on your case as soon as possible.
Hidden Fees that Add Up
While these might be some of the main factors that drive the high price of ediscovery, there are also hidden fees that contribute to rising costs.
With each gigabyte costing around $25-$100 to process depending on the pricing plan of your chosen ediscovery software, time is literally money when it comes to processing data. When you cull your data during the ediscovery process, you’re preparing it for review. Things like deduplication, email threading, and clustering utilize automation to organize relevant data in an efficient way, which can help you find specific pieces of information quickly. If it takes several hours for your firm to upload just a few gigabytes, you’re going to pay more both in price and time than a firm that can upload thousands of gigabytes in that same period.
Although data processing times can depend on the ediscovery platform you use, any delays are still likely to be attributed to you in the eyes of the court, which can lead to fines and additional penalties if it’s late. This makes the type of ediscovery software you choose increasingly important, especially as data and file types only grow more complex. A platform that has the ability to handle complex file types can really go a long way in saving money.
While on-premise ediscovery software providers have been popular in the past, they are now seen as outdated and slow when compared to the cloud-based software of today. On-premise systems often require steep up-front investments that don’t let you control your own data in-house, and might even have you pay a per-user fee for your desired number of custodians.
Cloud-based software streamlines the entire ediscovery process, and allows you to keep all your data in-house. Many of these solutions feature speedy processing times, convenient pricing, and many other features and tools to help maximize your ediscovery experience.
Early Case Assessment
Early case assessment (ECA) serves as a helpful form of project management in the long run, but it also costs money in the short term. Your expenses will likely be proportional to the volume of data you have to get through, and the complexity of the file types within it.
Clients use many different types of technological tools in their daily operations, which means an ediscovery platform needs to be able to integrate with all of them to be effective. For example, if an organization uses Gmail for email, Microsoft Office to house work products, and Slack for messaging, all of that data will need to be produced during discovery, and therefore integrated into the ediscovery solution. Some software charges for additional integrations, or have fee structures in place that raise prices for certain accommodations.
Data Preservation and Security
Keeping your data safe and secure is of the utmost importance. Data breaches occur more often than you think, and can cost in the billions of dollars. Plus, if an unauthorized party gains access to your information, it can be disastrous for your firm, clients, and case. Your ediscovery software should prioritize security to ensure your data is never compromised. Data preservation is an expensive but necessary part of budgeting for ediscovery expenses in 2024.
Keeping Ediscovery Costs Down in 2024
So, with all the up front and hidden costs associated with the ediscovery process, how can you actually keep ediscovery costs down in 2024? The first and most important step is to invest in solutions that will last. Although it might be tempting to go for cheaper or unproven alternatives, this can ultimately hurt you in the end. Something might promise to be cheap, but could end up costing more long-term, or a solution could simply not work, leaving you short on options.
The easiest way to achieve ediscovery cost savings in 2024 is to invest for the long-term. That means working with a cloud-based software to help identify your needs, discuss potential areas for improvement, and build a true partnership. It might be more expensive up front to go with an alternative software, but ultimately it will be the most cost effective option. You can survey prospective service providers by getting demos of their products, studying use cases, and speaking with representatives who are knowledgeable about your market.
Evaluating your priorities and budget before beginning your search for an ediscovery solution will help immensely in finding the right software for you. If you plan to take on major litigation in the next year, your needs and budget will be much different than a firm that is looking to establish an ongoing partnership for general ediscovery services.
Everlaw is an all-in-one cloud-based ediscovery software provider built for law firms, corporate legal departments, and government agencies of all shapes and sizes. Market experts who cater specifically to legal professionals can help walk through the tools and resources that fit your organization, allowing you to customize the platform as you see fit. Everlaw’s transparent pricing model means you’re never surprised by hidden costs, and always know where you stand.