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 selected:
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 smaller matters:
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
Monthly 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 account.
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
A 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:
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.