A Look Inside Hosted e-Discovery Pricing
Secrets your service provider may not want
you to know.
By Megan Miller, Gallivan Gallivan & O’Melia
Lawyers and litigation
support teams researching alternatives for e-discovery have a daunting task, complicated
by the fact that information on which they will have to base an important
purchase decision is often fuzzy at the time the e-discovery solution is being
The location, scope
and size of the data set may not be known.
Data volume is difficult to estimate.
The technologies used
in processing, analyzing and producing digital documents are confusing, and
vary from one provider to the next.
Pricing models are
often convoluted, or based on technical aspects of the project that won’t be
known until later in the game - think GB, document counts, page counts….
“Per GB” pricing is
very prevalent, and yet probably the most volatile parameter in the
It’s reasonable and prudent
to evaluate several potential providers, request quotes, and compare the cost
of services to make an informed choice.
Here’s the rub: some service providers charge
an hourly fee to collect data or image a hard drive; some charge a flat
fee. Some charge a processing fee based
on the number of Gigabytes (GB) of data.
Some might waive or reduce processing fees, but make it up with higher hosting
fees or another line item.
So how can you effectively
assess multiple proposals for one e-discovery project and determine which will
be most cost-effective? What questions
should you ask service providers to be sure you understand what’s included in
each line item?
This paper will provide some
insight into the various elements that drive the cost of e-discovery
processing, hosting and review. To
create our comparison we gathered several e-discovery bids; 3 representative
examples are provided in the table at the end of this paper.
We studied the bids,
‘translated’ them line by line, in order to compare them in an apples to apples
view, side by side. The pricing
information is real – all of it collected from real service providers in major
metropolitan areas across the US, in the last 90 days. However, it is also perishable. The market is constantly changing, and
pricing changes on a regular basis. While the bids are from real service
providers, we have changed their names in our example.
Size Matters (in a per GB world)
All of the service providers
we reviewed charge on a per GB basis for at least some of their services. A
smaller data set (say, 20 GB or less) becomes very expensive in these
models. Many service providers are
unwilling to incur the costs of project setup and management on a small
matter. Volume-based (“per GB”) fees
won’t generate enough revenue to be profitable.
A couple of alternatives for
If your ESI corpus will be
20 GB or less, but you still want the services of a hosting center and some
project management, ask the provider if there are minimum fees, or if they will
provide a fixed-fee bid.
If you have some skill and
resources to manage software in-house for smaller matters, ask whether the
provider has a software tool you can run on your own server or PC. Digital WarRoom Pro™ installs quickly on
your PC, where you can then process, analyze, review and produce documents at a
price point under $1,000.
Collected Data may Well Grow in Size
The approach used to collect
custodian data will have an important impact on the GB volume of data flowing
into the processing step. A forensic
image of an entire hard drive will typically have a higher volume of content,
perhaps 100 to 200 GB, but a good portion of that will be program and system
files that are not reviewable documents.
A procedure called de-NIST’ing removes these files as part of the
processing phase. More selective
collection, via selective copying, or use of ECA search and collection tools,
may reduce the volume of data the e-discovery provider receives.
The processing phase of the
EDRM is probably the least well understood. In addition to de-NISTing, processing involves
the use of specialized programs to open container files (mailboxes full of
messages, folders full of Word documents, .zip files full of a variety of
documents), identify and remove duplicates, and index the document contents to
create a database that is key-word searchable.
The important tip to know
about processing: in a normal collection
of email and documents, for example, the GB volume of documents after
processing may be 10-30% larger than the original collection. The growth occurs during ‘expansion’, when a
content of condensed folders is extracted into individual documents, messages
and attachments. So it’s important to
ascertain whether the fees your provider charges on a per GB basis will apply
to the 100 GB collected, or the ~125 GB after expansion and indexing.
Monthly Hosting Fees: Volume-based
Most hosting providers
charge a per GB/monthly fee for hosting the documents, some charge a flat
monthly rate. Be sure your provider is
clear about which GB volume represents the hosting fee basis: is it the
collected volume, the volume post-processing, or the post-filtered volume for
Hosting: User Access
A ‘user access fee’ or
license is commonly charged; it typically includes account logins and credentials
for authorized users. Have the provider
clarify whether the user access fee is charged monthly per named user, or per
Your hosting needs can vary
month by month over the course of a matter.
If, for example, the case is delayed in the courts, you may incur
hosting fees for months of downtime when attorneys are not accessing or
reviewing documents. If you anticipate
this could happen in your case, ask about the availability of a ‘standby’ or
‘on hold’ rate for reviewer access licenses.
A reduced rate during a lull in activity can realize significant savings,
particularly on large reviews.
Efficiency Tips to Contain Costs
Start early! Decisions made under the pressure of a
litigation hold and pending filing may not serve you well. Dedicate a small team to the evaluation
process, and allow them the time to research and make recommendations.
Request a hands-on trial of the software, if you have not used it before. If your trial can include a test on your own
data (you’ll have greater familiarity), you’ll know how intuitive the software
is. By far, an easy-to-use application
for processing and review gives you greater control and will save custom
consulting costs (you’ll need less help, and incur fewer hours of consulting
Take advantage of flat-fee processing rates if available, and then manage the ESI collection process
to result in fewer and larger, rather than many smaller, collected data sets. Combining several custodians’ data on one
drive will achieve greater efficiency and lower cost when you are paying a flat
fee for processing.
Don’t put client data at unnecessary risk. Each time data is
moved from one system to another, or is saved in a new format, the risk of data
corruption or loss increases. A system
that can process, support review, and produce responsive documents while
keeping the entire collection intact in one application will reduce time delays
involved in importing/exporting between various systems, and will reduce risk
Investigate Repository storage. Do you expect follow-on litigation? Maybe a civil case
on the heels of a government investigation? Often the same documents will be
responsive in multiple matters. Ask the service provider if they have the
ability to build a repository of documents and work product that may be
re-purposed for future matters. Don’t
collect and process the same documents multiple times.
Use a review platform that provides native (or near native)
review, as opposed to TIFF or image
review format. If the review system is TIFF based, you will
pay for conversion of all native documents into images prior to starting
review. Imaging incurs avoidable
up-front time and cost.
Look for a provider who is also the creator and owner of
the software tools. Many companies are 3rd party
re-seller or service providers, who add a ‘middleman’ layer of cost to the
project. You can realize savings, and sometimes great benefits by working
directly with the company that created and owns the review platform:
- The principal who owns the technology is not saddled with
all the licensing fees and royalty costs that a 3rd party service
provider is required to pay; with a lower cost basis, they can price more
competitively or have room to make price concessions.
- The team who created the software knows it better than
anyone, often can provide better technical
- That same team may also be more responsive on bug reports
or new feature requests – you have a direct line of communication
source, rather than through a 3rd party service provider.
final caveat: Don’t Sacrifice Quality for Cost
There are many steps and
technologies at work in e-discovery. It
goes without saying that your company’s data, or your client’s data must be
carefully guarded, and the e-discovery process should be conducted by
professionals who have proven skills and experience to handle the challenges
that inevitably arise. Seek to control
cost, but don’t sacrifice quality. The
service provider you rely on should be ready to provide credentials held by
project managers and technical staff, and those should include:
A healthy mix of technical talent and legal
training; degrees in information
sciences, data management, database administration, systems architecture,
Field experience in a
law firm, in litigation support or e-discovery management
certifications among the following:
- CeDP ( Certified eDiscovery Professional, Organization of
- CISSP (Certified Information Security Specialist)
- ISCFE (International Society of Computer Forensics
Now you are privy to some of
the secrets that e-discovery service providers seldom divulge. Use this information to demand fair pricing
and high quality results. You will be a
hero for your firm or corporation, and the industry will be better for it.
Interested in Learning More? This topic was addressed in a live webinar,
“A Look Inside Hosted e-Discovery”, by Bill Gallivan in May 2012. Readers are invited to download the presentation and FAQ documents on the Digital WarRoom website.