Budgeting, Part 3: E-Discovery Cost Reduction & Recovery (By Carla Bauer, PMP, RCA)
E-discovery costs are a major concern for law firms and their clients. Addressing e-discovery issues such as search terms, date ranges, and production formats with opposing counsel at the onset of the case will lead to reduced costs and higher client satisfaction. When costs are understood and anticipated, all parties can focus on the legal strategy instead of worrying unnecessarily about e-discovery issues. Merging the legal strategy and the e-discovery strategy at the beginning serves to benefit the entire case and team. There are 5 steps that law firms need to take to recover e-discovery costs.
5 Steps for E-Discovery Cost Recovery for Law Firms.
1. Learn about e-discovery or hire a knowledgeable e-discovery consultant. According to the California State Bar Formal Opinion 2015-193, "Electronic document creation and/or storage, and electronic communications, have become commonplace in modern life, and discovery of ESI is now a frequent part of almost any litigated matter." Are you knowledgeable about e-discovery? Are you an expert in e-discovery? If not, then the Opinion advises: (a) learn about e-discovery (b) hire an expert or (c) refuse the client. Every industry and profession has experts, and the field of e-discovery is no exception. These experts can often save money with their breadth of understanding, knowledge, and skill. E-discovery involves many intricate details that can become overwhelming even when working with small cases. Understanding different review strategies and concerns upfront can save hours of time and anguish and keep the law firm in control of the case.
2. Educate clients about e-discovery. As litigation begins, many clients are in the dark about the ESI collection process and the associated costs of preparing data for attorney review. Educating them at the onset makes it easier to understand and to get into their budget. Most clients do not want to incur the costs of e-discovery. Ensure them that (a) it's still discovery, just a different format and (b) the firm is proactively managing these issues so the client can feel more confident and in control. Even clients who have e-discovery experts in-house often need to understand how the firm’s approach may be different from others. Speaking with the in-house e-discovery team can provide valuable information and ensure the data transfer happens in the most efficent manner possible.
3. Budget for e-discovery costs and include in initial case estimate. Law firms often underestimate the costs of e-discovery or do not even consider the costs when the client begins the discussion about their legal matter. Attorney fees and associated costs are generally vaguely provided to clients, but often the e-discovery costs are labeled “To Be Determined.” Addressing these issues upfront and pointing out to the client that this has been included in the initial case budget can be enough to win over some clients. It also provides the firm an opportunity to display technology proficiency and express the value of the processes and procedures the firm has implemented to control costs. (See Budgeting, Part 2: Budgeting for e-Discovery.)
4. Plan and be proactive about e-discovery. In the initial phases of the case, the firm needs to discuss with the clients the potential number of custodians that may be involved and the extent of their involvement. Start with a sample set of the most obvious custodians, collect and review their documents, and work from there. Also, asking a few questions about the client's technology and infrastructure can lead to far more accurate budgeting and securing of needed resources. Waiting until the opposing counsel is upset and disturbed about receiving discovery results in the loss of control over the process and can increase costs tenfold.
5. Implement the plan to control the e-discovery costs of the case. Having followed the advice above and being prepared for the process of e-discovery collection, processing, review and production offers the law firm and client the best chance of understanding the data and being prepared for any curve balls that come. Project management, budget, and cost controls do not have to be painful, but if they are not used in the e-discovery process, the case will easily get out of control.
E-discovery costs can be recovered whether they are in-house or vendor costs IF they are anticipated with planning and included in the case in budget. Education and knowledge about the entire e-discovery process are essential to recovering and controlling the costs for each project.
Carla Bauer, PMP, RCA is Founder and President of e-Discovery IQ. She can be reached at (859) 409-3979 or Carla.Bauer@eDiscoveryiq.com.