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A Case for Insourcing E-Discovery Data Management

Created on July 8, 2014


e-discovery trends

Readers who frequent E-Discovery Beat know that insourcing e-discovery data management is a theme we often revisit. Our assertion has long been that the only way organizations can realize truly significant e-discovery cost savings is to recognize that e-discovery is a standard business process supported by quickly advancing, end-to-end technology that should no longer be routinely outsourced to external parties.

It was refreshing to stumble across a recent blog post from well-known e-discovery expert and lawyer Craig Ball that broached some of these similar themes. While his post, titled “Unconscionable," does not explicitly advocate e-discovery insourcing, Ball does point out that the costs associated with traditional outside e-discovery vendor services can be perplexingly high. He looks at one unnamed vendor's published prices and projected costs for a given project (obtained via an affidavit). The details of the projection are fascinating and Ball breaks them down in entertaining detail (you can read the full post here). Among his observations was that the vendor was projecting extraordinarily large fees for “largely unattended machine time." Details of the cost projection included:

  • Cost Projections$27,775.00 (505GB x $55.00/GB) to process 505 GB of ordinary business data, virtually all of it email (Ball described the data set as “classically incestuous data… rife with repetition," yet the cost projection resulted in no reduction in data volume, even after processing).
  • $126,250.00 (505GB x $250.00) to load the post-processed data set to a hosted review tool (to which Ball concludes, “It is, at most, a day's work for one technician, with all of the heavy lifting done by the machine")

Ball's point in writing the article was not necessarily to expose e-discovery service providers for trying to rip off clients. He makes the point in response to a reader comment that cost over-projections can serve as a “tactical assertion of proportionality by casting native production–something that's relatively easy and economical approached with competence and good sense–as something wildly out of proportion with the amounts in controversy," thus ultimately benefiting the party requesting the services.

The larger question that emerges from all of this is why parties continue to involve outside entities in processes that can be increasingly handled internally. For example, the newest generation of collection applications can automate data processing at the point of collection, completely removing it as an isolated, outsourced step in the process. Likewise, in-place analytics (or pre-collection analytics), another emerging capability among advanced e-discovery technologies, give in-house legal teams the ability to drastically reduce data volumes and focus collections on only relevant ESI, resulting in quicker, more informed case decisions and much lower review costs. What's more, organizations that bring e-discovery technology in house are usually able to avoid per gigabyte pricing and save a lot of money in the long run. Depending on the technology vendor's pricing model, an organization may simply pay a one-time fee for unlimited use of the tool or contractually agree to certain data limits based on litigation load and typical data volumes. Even software companies that offer hosted e-discovery technologies, which are typically priced on a subscription model, are moving away from volume-based pricing towards models that are more predictable for customers. Any of the aforementioned options is likely to be considerably more economical than per-gigabyte pricing, which only incentivizes service vendors to retain as much data as possible.

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You can learn more about trends and best practices surrounding in-house e-discovery practices by taking part in Exterro's E-Discovery Masters webcast series. The series kicks off on July 23rd with a webcast titled, Survey Says…Insights into the Latest Litigation and E-Discovery Cost Trends. The webcast will explore recent studies by University of Chicago Law School, Norton Rose Fulbright and FTI Consulting on corporate e-discovery trends. Webcast registration is now open and can be completed here.