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Are you struggling to control eDiscovery costs? Here are some practical tips to consider

February 29, 2024
Tips for controlling eDiscovery costs

Are you wrestling with consumption-based eDiscovery costs? You’re not alone. The process of eDiscovery is notoriously expensive, and for good reason. With burgeoning data volumes, increased data complexity, and a stringent regulatory landscape, the costs quickly spiral out of control. These costs aren’t just a “necessary evil”; they represent a significant operational challenge that can drastically affect your bottom line.

This article aims to break down the multi-faceted aspects contributing to the overall eDiscovery cost. Then, it will delve into different approaches for accounting for these costs. Finally, it will offer practical eDiscovery cost control tips to streamline the process and achieve cost-efficiency.

What the Statistics Say About eDiscovery Costs

According to the Civil Litigation Survey conducted by IAALS (Institute for the Advancement of the American Legal System) of the University of Denver, 66 percent of participants agreed that discovery was conducted in at least 70% of the company’s cases.

Most respondents (62%) reported that the cost of pretrial litigation for a typical company case has increased, and they pointed “eDiscovery” as a primary factor influencing the litigation cost.

As per ComplexDiscovery research, document review holds the major share (66%) in eDiscovery costs, followed by data processing (19%) and collection (15%).

All these figures add up to one simple fact: the need for effective eDiscovery cost control tips is not just a luxury; it’s an absolute necessity.

The Multi-faceted Costs of Traditional eDiscovery

Hard Costs

When thinking about eDiscovery costs, the first thing that comes to mind is hard costs. These include:

  • Vendor and outside counsel fees, can quickly add up depending on the complexity of the case.
  • Costs associated with data volume in eDiscovery, as many pricing models are based on data volumes.
  • Over-collecting data due to a lack of appropriate tools can significantly inflate the budget.

This emphasis on data volume is key. Because service providers often charge per gigabyte, the more data you have, the more you’re going to pay.

Team Time

Let’s not forget the most valuable asset in your organization: human capital. Man-hours spent on eDiscovery can be a financial sinkhole.

  • Hours can be wasted manually tracking legal hold notifications or following up with custodians.
  • A significant amount of time is devoted to manual review, pulling valuable resources away from other essential tasks.
  • Don’t underestimate the amount of IT time spent on data preservation and collection.

In the absence of streamlined processes and tools, the man-hours add up, making team time a significant factor in eDiscovery costs.

Operational Costs

Beyond hard costs and team time, operational costs often sneak up on organizations. These include:

  • Staffing needs, which may require hiring more team members or reallocating existing staff.
  • The cost of educational resources and documentation necessary to ensure compliance and robust data governance.

Both hard costs and operational costs intertwine with the esi volume in eDiscovery, underscoring the importance of managing this effectively.

Risks

One cannot overlook the risk factors that can exacerbate the eDiscovery burden.

  • There’s the looming threat of court sanctions due to spoliation of evidence.
  • Human errors stemming from an over-reliance on manual processes can be costly.
  • Missing court-imposed deadlines or falling afoul of changing privacy regulations can both induce hefty fines.

Accounting for eDiscovery Costs: Different Approaches

To tackle the issue, it’s crucial to understand how to account for eDiscovery costs. Here are some methods:

The Linear Approach

  • This entails breaking down the costs stage-by-stage in each case.
  • Whether a case lasts two days or two years, capturing the costs at each stage offers a more granular view.

The Holistic Approach

  • This approach advocates for a 360-degree view, considering all the infrastructure needed to support eDiscovery.
  • Here, you account for everything: staffing, IT costs, legal department expenses, and vendor fees.

The Directional Approach

  • This framework focuses on segregating internal and external costs.
  • It’s vital to understand how much is being spent within the company versus what is outsourced.

While each approach has its merits, a balanced combination of all three can provide a holistic view of where the money is going. That knowledge is the first step to control eDiscovery costs effectively.

The Role of Technology in Reducing eDiscovery Costs

When it comes to reducing eDiscovery costs, technology can provide a big boost to firms.

TAR and Data Analytics

If there’s a buzzword everyone in the legal sector is paying attention to, it’s Technology-Assisted Review (TAR). A godsend for anyone seeking to reduce data volume in eDiscovery, TAR leverages machine learning to sift through the haystack of data for the needles of relevance.

Then there’s data analytics, another game-changer. Sophisticated eDiscovery platforms offer multidimensional data analytics like email thread analytics, PII analytics, keyphrase analytics, content analytics, image analytics, and fuse analytics to identify data patterns, relationships, and anomalies. These insights slash the ESI volume in eDiscovery and focus attorney review on pertinent information, thereby reducing review costs substantially.

Automation in Legal Hold and Preservation

Automating the legal hold process can free up a lot of human capital. The right legal hold management software will allow you to send, track, and manage legal hold notifications without manual input. On the data preservation front, automated tools can help in capturing and storing data in a way that’s both efficient and compliant. The end result? Reduced operational and team time costs.

Cybersecurity Measures

Remember, a single data breach can cost millions. Utilizing eDiscovery platforms with robust security measures can mitigate risks tied to data breaches. If you’re outsourcing, always opt for vendors that adhere to stringent cybersecurity protocols. Not only do you protect sensitive data, but you also avoid the astronomical costs associated with data breaches.

4 Practical Tips to Control eDiscovery Costs

If you’re looking to take some practical steps to control these costs, we have four recommendations.

1. Be a Minimalist with Data Collection

  • Don’t hoard data. Over-collecting can be a slippery slope into ediscovery cost escalation.
  • Being selective in what data is collected for review can significantly reduce data volume in ediscovery.
  • Implement a “need-to-know” policy. If the data isn’t necessary for a case, don’t collect it.

2. Foster Interdepartmental Cooperation

This might sound like a management seminar cliché, but cooperation between IT and legal departments is crucial. A well-oiled interdepartmental machine can make the eDiscovery process more efficient. By doing so, the organization saves on both team time and operational costs.

3. Be Proactive, Not Reactive

It’s far cheaper to be proactive than reactive when it comes to eDiscovery. This involves:

  • Regularly updating compliance policies
  • Continuous staff training
  • Employing predictive coding and other advanced features in eDiscovery platforms

4. Leverage Technology for Monitoring and Reporting

One of the best ways to control eDiscovery costs is through monitoring and reporting. Use technology to track spending, monitor compliance, and predict future costs. The right eDiscovery project management software can be your eyes and ears, alerting you to cost-saving opportunities and productivity gaps.

Wrapping Up

So, there you have it. eDiscovery doesn’t have to be a gaping hole in your budget. While the ESI volume in eDiscovery and other factors can drive up costs, a proactive approach infused with the right technology can make a difference.

With these eDiscovery cost control tips, you’ll not only save money but also transform your eDiscovery process from a cost center into a strategic asset.

Whether you’re a managing partner at a law firm or the head of eDiscovery in a corporate legal department, controlling eDiscovery costs is an attainable goal. It’s all about leveraging technology, optimizing processes, and being proactive.

The result? A more streamlined, efficient, and cost-effective eDiscovery process.

Author

Aubrey Owens, Jr.
Aubrey Owens, Jr., a renowned Legal Technology visionary and Executive Leader, is a leading authority delivering best-in-class AI-powered legal operations solutions handling Information Governance & Privacy, end-to-end eDiscovery & Hosted Document Review, Enterprise Data Management and other technology offerings for Corporate Legal Departments and Law Firms worldwide.