Larger law firms must manage a variety of challenges, including vast amounts of data, multiple production formats, and complicated legal work. They face complex litigation in practice areas such as construction, securities, and class action, which can involve large volumes of diverse data types. Am Law 200 firms often have to contend with complex organizational and team structures throughout the discovery process as well. Furthermore, large corporations are typical clients of big law firms, and they may have some reticence around cloud-based ediscovery due to concerns about data privacy.
Everlaw helps teams overcome these obstacles and simplifies the discovery process with tools that are:
- Capable of securely managing large volumes and varieties of data.
- Trusted by the Department of Justice and 91 of the Am Law 200 firms.
- Grounded in well-established migration practices, with support for firms transitioning from on-premises legacy systems to the cloud.
- FedRAMP-certified, which builds trust and ensures that digital evidence at the federal level remains protected.
Some Am Law 200 firms don’t bill customers for their ediscovery costs, instead absorbing the costs as overhead. For those that do bill for these costs, there are four main cost-recovery models to consider:
- Pass-through models. In the pass-through model (which is currently the most popular in the industry), a law firm “passes through” any costs incurred through ediscovery to the client for each case or transaction, without marking any of them up. They usually charge clients for project-management support or the coordination of third-party services. Many law firms choose this model because it offers transparency to clients.
- Bundled-cost models. In this model, the law firm will typically use an external vendor for a SaaS or on-premises ediscovery solution. They’ll then bill clients for these services through a markup of the hosting charges they’ve paid (per gigabyte of data).
- Adjusted-cost models. The adjusted-cost model is similar to bundled-cost models, in which law firms charge clients for the data hosting and technology costs they’ve incurred from third-party vendors. Here, the firm purchases ediscovery services at a wholesale price from outside vendors, then charges the client at a retail rate.
- Profit-center models. Any of the previously discussed models can be adapted to a profit-center model by law firms that have a deep understanding of their costs and workflows and efficiently manage the ediscovery process. Cloud-based ediscovery platforms can help legal firms transition to this model, since they enable them to better project costs, identify potential process improvements, and implement more efficient workflows.
Regardless of which model a firm chooses, it’s critical to provide full transparency so the firm can recoup these fees while still offering clients cost-effective, efficient legal representation. Transitioning to a cloud-based ediscovery platform like Everlaw can help, as it provides complete visibility, fast uploads, and accurate searching — so clients always know they’re getting tangible value for what they’re paying.
It’s important to note that, while the right tool can help, ethical and sustainable cost recovery requires firms to keep three key imperatives in mind:
- Full transparency with clients.
- The ability to charge clients fees that are reasonable within the broader marketplace.
- Assurance that there is precedence in the industry for the approach used.