eDiscovery Budgeting: Understanding Confident Pricing Models.
When a new case is eminent and the document collection for discovery is voluminous, sometimes it just makes sense to bring in an outside Litigation Support team. Why? Consider internal storage, security, and a guaranteed SLA on any assistance you need. Consider the defensible tools and workflows a team of experts can employ to reduce irrelevant content and identify privileged records instantly. A good LitSupport team can increase your review speed and reduce irrelevant volume dramatically while supporting every request you make in real time.
But how to choose a vendor? With so many options on the market today, a simple Google search can produce thousands of choices.
It’s typical for our clients to seek bids from a qualified, vetted handful of teams from across the country, but proposals generally only cover the cost of standing up services for the first month. A smart move is to request written estimates on a typical full years’ expenses before the first project is started. These can vary based on extraordinary events in the case – like the introduction of new data stores, new users of the review platform, multiple productions, and of course, determination of trial exhibits. However, a rough estimate at the current rate of performance is always possible and should always be modeled out just in case the project runs longer than expected.
Determining what resources you’ll need.
Not all reviews are the same. Some review projects serve as a quick and dirty privilege screen and production. Some are intense, complex, issue-driven data mining exercises requiring lots of expert help and automation. Some review projects involve long-term data repositories that need practically no support at all. A good LitSupport team should be able to help you assess what kind of resources you’ll need based on your mission objectives and particularities of each case and its universe of data. This is critical in the eDiscovery budgeting process.
Depending on the cost schedule you negotiate with your vendors, many of these billable resources could be incident, size, or time-based. This is why understanding your cost over the period of the case needs to be modeled and estimated systematically. A good vendor should be able to stay within 10% of the original estimate presented, barring extraordinary events changing the project scope. Even where these extraordinary events occur, your vendor should be able to accurately determine how these events change the scope and estimate, provide clear and useful information and adjust accordingly.
A somewhat incomplete list of available pricing models.
Somewhat incomplete? We told you there’s a lot of vendors out there right? Today the pressure to find the perfect fit for every budget has forced service providers to build increasingly flexible service models, which has resulted in a variety of options. Your vendors should be able to offer different competitive pricing schedules that work for you. Let’s cover a couple of different methodologies that you might encounter.
Traditional – A La carte service model
This is where it all began. This service model charges a low cost for each service performed such as OCR, Branding, Data Ingestion, Processing, User Fees, and per gigabyte Hosting. Technical time is generally charged for comprehensive tasks like exhibit creation and stamping to keep line items of each individual service down to a minimum.
- Customers who have an existing review project that need to control costs or improve service levels.
- Customers who have a long term repository style case who won’t need to make many productions or trial exhibits.
- Big and/or long term data collections that won’t need a consistent number of reviewers every month.
- Because it’s a long term project, the vendor has a longer term to rely on residual revenue which is pure gold to a service provider. Negotiate a low per-GB hosting fee and try to get a couple of user licenses included for a low monthly fee.
- Understand the cost to increase your user licenses over time in case the project heats up. Also take the time to consider what kind of ancillary services you might consume over the lifecycle of the case. (Printing, Productions, PDFs for expert witnesses, etc.).
- Ensure you can switch to other service models if the case objectives change.
- Never get locked into a contract with this service model.
All-inclusive – Bundled service model
This is a more recent service model that was created to control costs when you’re going to need a lot of resources like data processing, hosting, gigabytes and productions. With an all inclusive model, everything is included. Popular variations of this model are measured in gigabytes of data on a monthly basis. Greater discounts can often be had for quarterly or yearly commitments. Guardrails are usually established around paper and other tangible consumables like hard drives.
- Customers who are starting a new review initiative with raw eDiscovery data with short deadlines, lots of productions, and a big potential for trial exhibits.
- All-inclusive pricing can offer a flat cost with little to no variation from month to month. The end client benefits because budgeting is more reliable.
- All-inclusive pricing is likely more cost effective on new matters than a la carte models. It’s worth considering and modeling.
- With a la carte models, you pay the bulk of the project cost in the first month, which can be strategically challenging for a client starting a new litigation initiative. With all-inclusive pricing, you’ll likely be charged the same fee every month.
- Use it when you need all of the resources a Litigation Support vendor has to offer.
- Most vendors offer an allotment of free users based on the size of the matter. Negotiate as many as possible even if you’re not going to end up using them. Over time, you may need to add additional reviewers to the case.
- Understand any limitations of the offering to help your client understand when the monthly bill might expand to accommodate additional resources not covered by your plan.
- Beware of all-inclusive models that don’t include productions, technical time, and exhibits. This is commonly overlooked and can represent tens of thousands of dollars, your own labor, and missed deadlines.
As you can see, there’s a bit of complexity between the two models. It’s important to take the time to fully understand the model you’re entering into and to be able to change to another model if costs are out of control.
You can always spend some time with one of our team members to fully explore these options, and of course we’d be happy to provide a comparative bid to help understand the long-term benefits of choosing the right model. eDiscovery budgeting isn’t rocket science. We can help.