eDiscovery Daily Blog

eDiscovery for the Rest of Us: eDiscovery Best Practices, Part Three

Editor’s Note: Tom O’Connor is a nationally known consultant, speaker, and writer in the field of computerized litigation support systems.  He has also been a great addition to our webinar program, participating with me on several recent webinars.  Tom has also written several terrific informational overview series for CloudNine, including eDiscovery and the GDPR: Ready or Not, Here it Comes (which we covered as a webcast), Understanding eDiscovery in Criminal Cases (which we also covered as a webcast), ALSP – Not Just Your Daddy’s LPO and Why Is TAR Like a Bag of M&M’s?. Now, Tom has written another terrific overview regarding eDiscovery for the smaller cases titled eDiscovery for the Rest of Us that we’re happy to share on the eDiscovery Daily blog (and will cover later this month in a webcast).  Enjoy! – Doug

Tom’s overview is split into four parts, so we’ll cover each part separately.  Part One was published last Tuesday and Part Two was published last Thursday.  Here’s Part Three.

The Ernie Challenge

To answer the question of what to do for the cases larger than $1,000 but less than the major litigation cases, I drew up the “Ernie Challenge,” with advice from Craig Ball and DLA Piper senior counsel Browning Marean.  Named for my good friend Ernie Svenson, then a solo attorney with a general practice in New Orleans, it was posted on its own blog site at  https://theerniechallenge.wordpress.com/ .

Ernie is very tech savvy and often calls me when he has an EDD question involving what we call the “tweener” cases, those that fit in between the range covered by the Edna Challenge and mega cases suitable for the larger brand name products that dominate the EDD world.

The Ernie Challenge posited a case with roughly 1 terabyte of data to collect and a final amount of 200 gigabytes of data to review, most of that e-mail with the balance being various types of financial data. We also asked for some form of web review tool to work with the clients’ counsel and contract staff in a separate location.

There were several problems in meeting this challenge. First of course was pricing. Many, if not most, eDiscovery vendors at that time had their roots in the per unit commodity pricing days of photocopying and imaging. The standard practice was to charge hundreds of dollars per GB to process the data (which included culling, deduping, and de-nisting of the data set then preparing it for loading into a review software); then charging again — by both GB and user — on a monthly basis to review the data.

As a result, a simple license plus annual maintenance or a monthly subscription fee model for eDiscovery products didn’t exist. Instead, we had to sort through hundreds of products priced by varying and often widely divergent methods.

$X per GB for processing, $X per page for OCR, $X per document for near duplicate detection, $X per page for Bates numbers, $X per user and per GB to host and so on. Each is performed for different units with different unit pricing that can run from a penny to $500 per unit

For example, if a client paid for a forensically sound data collection of 800 GB (the size of the hard drive of one typical computer) and that data set eventually yields 200 GB of reviewable material, a typical eDiscovery company would charge $200 per GB for the processing ($160,000) plus $50 per month per GB ($10,000) and $90 per month per user for the hosting. If the case were to last 18 months, this cost alone would be just under $350,000.00. And if we accept the commonly cited statistic that the review process will account for 60-70% of the total project price, then we’re looking at a project cost that will eventually be close to $1,000,000.00.

For 200 GB of data!

To avoid the shock of those costs being immediately apparent, vendors often using pricing sheets in response to an eDiscovery RFP that looked like the menu in a Chinese restaurant … without English subtitles. And very few people had the experience, let alone the patience, to sort through those sheets. I myself was often called by clients to help them in that process because the separate bids they receive to an RFP don’t even appear to respond to the same proposal!

So, if your case was only worth $400,000 and after analysis and discussion with your client, you believe you cannot spend more than $10,000 for ESI processing and hosting services over the anticipated 18-month life of the case, you had a problem.

And if your case fell within the scope of the EDna Challenge, a small case with an eDiscovery budget of less than $1,000, you had an enormous problem.

By 2011, the question was paramount but we began to see some glimmer of hope. Craig Ball, in an interview at Legal Tech New York with Doug Austin ( https://cloudnine.com/eDiscoverydaily/electronic-discovery/eDiscovery-trends-craig-ball-of-craig-d-ball-pc-2/) said “…  I’m seeing some behind the firewall products, even desktop products, that are going to be able to allow lawyers and people with relatively little technical expertise to handle small and medium sized cases.”

And that is the essence of our Small Case Dilemma. Where are those programs? Are there really applications that attorneys can use themselves to process and host data? Is there really a way to process and review a couple of hundred GB of data for a reasonable price?

By 2012, the products Craig Ball mentioned had materialized. In the book we wrote as a follow up to our ABA TechShow session (Electronic Discovery for Small Cases (ABA, 2012), Bruce Olson and I listed several, including:

And at the same time, pricing began to drop substantially. Not only did unit pricing lower dramatically but we also began to see drop a trend away from the unit pricing model towards a flat fee or “all in” pricing. These sort of bundled flat rate prices, whether it be “per gigabyte,” “per drive,” or even “per case,” cover all the variables currently priced by the big boys as separate line items.

This development stemmed from two factors: (1) increased pricing competition among vendors and (2) newer cheaper technology. Faster processing products were being sold directly to corporate legal departments and law firms while the cost of hosting is being driven down by non-legal services such as Amazon and Microsoft. These developments give clients the option of using an in-house solution that cost far less than the prices stated above which then caused vendors to drop their prices accordingly.

We’ll publish Part 4 – The EDna Challenge, 2016, What’s Next and Conclusion – on Thursday.

So, what do you think?  Do smaller litigation cases get shortchanged when it comes to eDiscovery technology?  As always, please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.