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How to Budget for eDiscovery Costs

By Neetal Parekh | Last updated on

Law firms big and small face a similar difficulty with legal technology--estimating its costs.  At early stages of a case it often proves to be a challenge to consider the scope of discovery as a whole--especially when trying to account for the looming variable of eDiscovery costs.  Mining discoverable evidence including email, web-based documents, audio files, photographs, software, and other tech-related evidence is only the beginning of eDiscovery expenditure.  There is also the sorting and analyzing the data and metadata into information that can be used in preparing the case, and finally, finding ways to present the collected and sorted materials in coherent form. 

So, how does a law firm attempt to budget for their legal technology expenditures?  Here are some tips.

1. Think big, work backwards.  Sit down with your client to determine a maximum potential expenditure amount.  Consider the amount the data, types of data, and infrastructure of legal technology that will be implicated in the eDiscovery process.  Use the amount in controversy as a guiding dollar amount in considering where to cap discovery costs.  What are the client's objectives?  The answer to that will help clarify for the firm, and the client, the purpose and goals of discovery.  Once you have the big number, work backwards to subtract out excess costs and over-budget expenditures to settle on a range that is reasonable in light of the case and client needs.

2. Identify outside vendors that will be engaged.  No man is an island, and neither is a law firm or its client.  Once you have a grasp of the breadth of data that will be involved in eDiscovery, consider the types of vendors that will be engaged.  If the client has a records management policy and strong IT team, some of the data collection and data review may be able to be done in-house.  However, it is more likely that the firm and client will opt to use outside software and support in mining and culling the data and metadata.  Use recommendations based on past experience and reviews to select suitable vendors.  You can meet with the potential computer forensics, data processors, electronic evidence experts, and other legal technology providers regarding their estimated costs for the amount of data anticipated in the eDiscovery process.

3. Be flexible to modify, but be ready to give and take.  Just as with any project, once the eDiscovery actually kicks off you will likely want to add on discovery queries and searching and analysis methodologies for more relevant and refined data.  That kind of critical thinking and assessment is key in building a case.  But  it can also make your discovery costs skyrocket beyond your projections.  The solution?  Build in flexibility to your projection, but also be amenable to cutting or modifying aspects of discovery process to cut costs in certain areas to balance any late add-on requests.  Once the process gets underway, seek efficiencies that can help keep control costs. 

Though it can prove a formidable challenge, through planning, communication, and adjustment, you can chalk out a budget for eDiscovery--one that will enable you access to the data you need and will stay within the client's bottom line.

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