eDiscovery can be an expensive aspect of any legal case — it accounts for 20-50% of all litigation expenses. As organizations, firms, and service providers look to bring eDiscovery entirely in-house, they must consider the costs associated with it to ensure it meets their budget. How much should you spend on eDiscovery software?

Several factors contribute to costs, and each eDiscovery platform charges differently. Understanding how each of these will impact your expenses can help you better plan your budget. Ultimately, you want to reduce your total spend compared to what you’re paying now, without any compromise in quality, speed, or functionality.

eDiscovery Costs Vary Without Industry Standards.

How do you currently calculate eDiscovery costs? For most of the legal community, it’s a guess with little data to back up the estimate. Benchmarks for eDiscovery costs have been hard to come by, but a new project is hoping to change that. The GW Proportionality Initiative is a collaboration of stakeholders working to create a framework that would include a cost calculator that factors in custodians, burden of retrieving information, and data volume.

That could be helpful going forward. However, the determination of actual costs lies within the price structure of your eDiscovery software. So, what are those specific costs?

What Are the Top eDiscovery Cost Drivers?

Here are the categories of expenses that will determine eDiscovery software costs.

Data Management

Even the smallest case will have a significant volume of data to manage. Larger ones could have millions of pages. While eDiscovery platforms help you reduce the data through the phases and before processing, you still need to ingest it, extract it, and remove duplicates.

Most vendors charge by the gigabyte; keep in mind that there are typically hundreds of gigabytes of data for a case.

Some platforms tack on additional fees for project management. Be sure to understand each add-on charge for extra features.

When considering budgeting for data management, understand what the costs are when comparing eDiscovery platforms to ensure you’re not overpaying.

Processing Data

The processing stage of eDiscovery can be time-intensive and costly. The speed of processing often comes with a steep price tag.

Does fast processing have to equate to high costs? That’s not always the case. Discuss with potential vendors how speed correlates to cost.

Training Expenses

When implementing an eDiscovery platform, your staff may need certification to work with the software. They may also need intensive training, which will add costs to your budget.

However, not all systems are this complex. A user-friendly platform with an intuitive interface and alignment with your current workflows won’t require weeks of learning to adopt.

How You Host

Some eDiscovery software solutions are only available as an on-premises installation. In that scenario, you’ll be responsible for the servers, other equipment, security protocols, energy costs, and more. It’s an initial capital investment. Then, it will become an operating expense for ongoing maintenance and upkeep.

Alternatively, you can choose a cloud-based eDiscovery platform with provider hosting. Thus, you won’t have any expenses related to physical equipment. Such a setup also offers easy, quick deployment and advanced security.

Licensing Fees

There are various models for licensing fees. For example, you may pay per line item, user, case, or gigabyte. Additionally, there may be more costs for third-party tools.

With many vendors charging fluctuating fees, it can be difficult to budget because of the unpredictability of costs. Instead, seek out a project-based model. Flexible licensing might also be an option, so you can increase the number of licenses when you’re ready to grow.

Number of Features

When it comes to processing data, most eDiscovery platforms have standard functionality across the board, though the difference in throughput, scalability, and ability to handle the breadth of technologies and file types could vary across different solutions. More advanced features, such as artificial intelligence-assisted review, in-place indexing, intelligent error handling, tagging, native redaction, and more could be line items.

You may have to pick and choose in these situations, which means you won’t have the key features to drive efficiency and accuracy. Get the details on feature costs before you formulate a final budget.

Hidden Cost of Integrations

One of the biggest problems with eDiscovery today is the technology vendor’s claim that its solution is end-to-end. Unfortunately, our research shows that this isn’t always true. While every vendor may have some features and functionality that span across the entire electronic discovery reference model (EDRM), very few deliver anything more than bare minimum capabilities across all phases of eDiscovery.

Vendors with competent processing solutions often have anemic review features while the largest review vendors have poor processing capabilities. Nearly all have a fragmented platform that requires you to export and import data as you move from left to right in EDRM. (Moving from right to left and reprocessing data in these cases is often impossible or prohibitively expensive.)

As a result, the actual price you pay for eDiscovery software may be much greater than the rate in your agreement. Vendors often raise costs above the agreed-upon price for integrations. That’s most likely to happen in the volume of data and processing speeds. The language may include things such as “up to” when defining costs. When considering options, be sure to get clarification on how the overall system works. Include the cost of data management by your staff, data loss or rework required during or as a result of export and import, and any other conditions that change the fee structure.

Cheap Solutions Will Cost You More in the End.

If you’re looking at all these numbers and beginning to ponder alternatives, you could end up in an unfavorable position. Some legal industry professionals have attempted to drive down eDiscovery expenses by using unproven approaches. It may seem like a bargain in the beginning, but it quickly becomes unsustainable because those systems don’t enable automation or use AI tools to identify content. Eventually, you’ll be unable to scale, and the results won’t be reliable. You’ll be back at square one.

Your eDiscovery Needs Will Impact Your Spend.

Your budget will need to reflect your organization’s eDiscovery goals. You may not be ready to implement a complete eDiscovery solution. You can start with early case assessment and expand as you become comfortable.

What’s important is to align this road map to eDiscovery with the expected costs. By doing that early in the process and being transparent with providers, you’ll find the best fit and price. As a result, it won’t be prohibitive to start your new eDiscovery success story.

You can get started today by requesting a free trial of Venio Cloud, an end-to-end eDiscovery SaaS solution.

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