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12 Ways to Improve Your Discovery Cost Recovery Process

June 27, 2019  |  15 min read

Dataand Money

If you're passing discovery costs through to your clients—and the vast majority of law firms are—you're also probably getting pushback on discovery costs, at least occasionally. In a recent Logikcull survey, 89 percent of law firms experienced client pushback on discovery costs, with 68 percent receiving pushback sometimes, usually, or always.

That pushback was also the number one reason attorneys wrote off discovery costs, cited by nearly 60 percent of law firm respondents. Those write-offs can quickly add up, leading to nonnegligible declines in revenue and preventing full cost recovery of a law firm's discovery expenditure. 

Write Off Causes graph

Improving your billing process is not impossible, and a implementing a few best practices can help reduce write-offs, improve cost recovery, and, ultimately, lead to more satisfied clients and attorneys.

Those strategies were recently laid out in a webinar on eDiscovery cost recovery, hosted by Logikcull and the Association of Certified eDiscovery Specialists. Featuring Jennifer Williams, Director of Practice Support at Vinson & Elkins, Ricky Brooman, Litigation Support Project Manager at Saul Ewing Arnstein & Lehr, and Aaron Crockett, eDiscovery Counsel at Harrang Long Gary Rudnick, the presentation surveyed a host of strategies and best practices that these leading legal professionals have employed with great success. Watch the webinar on demand today or read on for some of the key takeaways, taken directly from the presentation.




Tips for Reducing Client Objections to Discovery Costs

Scope out the Discovery Process & Set Clear Expectations

One of the keys to minimizing friction when recovering the costs of discovery from clients is by properly evaluating and conveying the likely scope of discovery and associated costs as early into an engagement as possible. By understanding the road ahead, you can set clear expectations with the client, helping reduce any surprises or objections that might arise later on.



Jennifer Williams

Jennifer Williams, Vinson & Elkins: All of our projects begin with a really in-depth scoping. The project managers on our team will talk to the legal team in-house as well as the actual client to figure out where they are in sophistication, as well as where they are in their understanding of eDiscovery in general, and the size and complexity of the matter. We also consider the size and complexity of the client themselves. All of those factors impact the decisions that we make for how we structure the services that we provide and who actually provides those services.

Ricky Brooman

Ricky Brooman, Saul Ewing Arnstein & Lehr: We always have an initial scoping call, especially when we're getting into the preservation and collection review portion of the EDRM, and we have calls with the internal case team as well as our client and any other folks that need to be involved with the process. We understand what data we have at play, estimate the cost upfront as to how much it will be to process and host the data on a monthly basis and how much we anticipate the review will cost.

Quick tips for scoping out discovery early on:

  • Meeting with internal team and client
  • Assess client sophistication
  • Assess size and complexity of a matter
  • Estimate costs of discovery software and review
  • Convey these estimates to the client



Set Clear Expectations to Help Reduce Discovery Write-offs

Ricky Brooman

Brooman: Setting clear expectations upfront is really powerful, and it makes it so that you're showing the client that you're communicating to them what you anticipate the bills to be, and you can put in place a budget.

By doing this, when the bills do show up down the line, it's not a surprise. They still might have some sticker shock at the price, but at least you've gotten in front of the ball, you've talked about it with them and you've educated them on where they will be seeing costs along the EDRM lifecycle for these services.

"You've gotten in front of the ball, you've talked about it with them and you've educated them on where they will be seeing costs along the EDRM lifecycle for these services."



Understand Clients to Help Reduce Cost Objections

Client education is often at the heart of any effort to reduce cost objections. But to successfully educate a client, you need to understand where they are coming from: How familiar are they with litigation and discovery? What is their acceptable cost threshold? Do they understand the benefits of the services you're performing? Answer these questions and you'll be well equipped to provide your client with the information they need to understand the benefits of your process. 



Know Your Clients' Processes in Order to Reduce Cost Objections

Jennifer Williams

Williams: Since my team does a huge amount of consultation-level support for our legal teams, it's really important for us to understand the outside counsel guidelines

When we're engaging in a matter, I encourage all of the project managers to talk to both the billing attorney or their billing contact as well as the billing coordinator, who is usually the one who knows the details about the client. Those details include things like their specific billing instructions. Do you have to bill in tenth-of-an-hour or quarter-of-an-hour increments? Are there words that we need to avoid when submitting things? Sometimes e-billing systems, which a lot of our clients utilize, will flag things if you use certain words and immediately kick them back, because a lot of times they're structured for excluding some things that they consider administrative, so we want to be very cognizant of all of those details.

Review OC Guidelines and Billing Procedures for:

  • Billing instructions
  • eBilling systems in place
  • Phrases that will be automatically flagged
  • Items considered "administrative" or "overhead"


Craft Your Approach to Match Your Client's Sophistication and Cost Sensitivity

Aaron Crockett, Discovery Guru

Aaron Crockett, Harrang Long Gary Rudnick: I have a privileged position in my practice of working with both very large and very small clients, and so I really see a range. The Client Cost-Sensitivity Matrix represents, in a very non-scientific way, the general breakdown of how I categorize clients and prepare myself to have the conversation with them as to what the bill is going to look like.

Cost Sensitivity Matrix for Evaluating Client Sensitivity to Discovery Costs

The sophisticated client is going to want a lot of information explaining how the bill is broken down, how you're planning to control that bill, and what it's going to cost down the road. They like the predictability.

With the less sophisticated, that's primarily an education matter. They're going to be new to eDiscovery and they're going to be new to the billing models in eDiscovery. It's going to be a bit of a hurdle to explain why all this stuff is valuable and ultimately saves them money, but that's what you're looking at with those clients, is in education.

At the opposite corner are the unsophisticated and very cost-sensitive clients. These are the clients where really getting creative in your billing, rather than how you explain your billing, is what's going to move that relationship forward. We can do that with a number of things, whether it be alternative billing models, different billing rates, and other strategies we have.


Practice Empathy in Your Approach to Clients

Ricky Brooman

Brooman: Empathy is really important. Not every client is a serial litigator, and some are new to the litigation vertical, so understanding where they are and walking them through what this looks like, what the process looks like, and what the various stages of the EDRM are is important. Having empathy as you work through those items is critical.

You need to be mindful that clients are cost-sensitive, just like we are in our personal lives. They need to be walked through the billing structure to understand what they're getting for their money and where they're going to see costs and when they're going to see costs.

We all are emailing a lot day in and day out. Sometimes it makes sense to just pick up the phone and have a human conversation and make sure that you're on the same page and you understand their needs and their wants, and help them understand that you're working toward the common goal of winning their litigation or representing them in an investigation properly.


Convey the Value of Discovery Services

For a client to accept discovery costs, they need to understand the value of the discovery process and the services you provide throughout that process. Imparting this information can be essential to reducing objections and write-offs, especially when dealing with parties who do not frequently engage in discovery. This is true not only with external clients, but also internal clients—the billing attorneys who will be responsible for communicating directly with the clients and justifying the costs associated with their matter.

Use Language That Shows Project Progression

Jennifer Williams

Williams: Show progression. You want to make sure that when you're actually billing for tasks that can seem repetitive, like loading data or QCing data or preparing productions, you make sure that you know what that client will tolerate in terms of how repetitive it can be, and really adjust your billing for that.

Instead of just, "Hey, we are QCing data for a production," phrase it as "We're performing a quality control check of production number four to the DOJ regarding custodian—insert the custodian name—and Bates ranges X to Y." That way, they can see that the next time you do it, because you're on the 15th production, that you're not doing exactly the same thing. You're doing the next stage or the next piece of that project.

"They can see that the next time you do it, because you're on the 15th production, that you're not doing exactly the same thing. You're doing the next stage or the next piece of that project."

Empower Internal Clients to Convey the Value of Discovery

Jennifer Williams

Williams: For us, we have our internal legal team client—that's our attorneys—and then we have the external client who we're serving, right? When we're dealing with this discussion about education, we do it on two levels. We explain to our attorneys: this is what's happening with this client; these are the processes we recommend; this is the approach that we recommend for this particular project, here's why, here's the language that we can give to you to help explain this to the client. Then, oftentimes, the project managers will participate in that discussion with the clients. 

If my attorneys can't really understand the process, then that really kind of falls on me. I'm the one who is supposed to give them the language that they need to message effectively to the clients. You have to give them the terminology, you have to help them gain a deep enough understanding so that they can feel comfortable talking about these things with the client, and helping the client understand that there is value to this work, there is value to these services, and that if we can do a good job in these things, that we can actually reduce their costs and reduce their effort and increase the efficiency of the entire discovery process.

Aaron Crockett, Discovery Guru

Crockett: What I find is most helpful are anecdotal war stories, cases that turned on being able to identify a critically important piece of evidence in a production very quickly, like the day before a deposition, and being able to turn that into leverage in a deposition very quickly. That is a story they can attach to.

Other situations resonate as well, like being able to get a production out in a quick time frame, which you can only do with the proper tool.

It's key for me to explain this value-add in stories and ways that senior attorneys can digest it, because often they're the ones on point for getting clients to pay their bill.


Find Discovery Approaches that Work for Clients

Sometimes, you will need to tailor your discovery process to fit a client's cost tolerances. This can require creative thinking, but a few sacrifices up front can lead to greater rewards later.



Embrace Task-Based Rates to Reduce Overall Cost

Aaron Crockett, Discovery Guru

Crockett: One of my particular favorites is task-based rates, where an attorney charges a lower rate for a particular kind of task. The value here, and really the key value in document review, is that the person doing the review has the most intimate knowledge of the evidence, its relationship to other evidence, and who's talking to who. That is invaluable familiarity with the client's problem that you lose if you try to outsource things like review.

"The key value in document review, is that the person doing the review has the most intimate knowledge of the evidence, its relationship to other evidence, and who's talking to who."

So to keep as much of that work in-house as possible, I'll propose things like a much-reduced rate for review so that the attorneys that are on the team and solving the client's problem are also the ones knee-deep in the evidence from start to finish without the client eating that enormous hourly rate for a boutique firm on something like review.

I like to tier that out as the stages go, so an initial review is going to be a much lower rate, and maybe deposition prep and exhibit prep materials at a slightly higher rate, and then of course, motions to compel are at your straight attorney rate.

That keeps everyone working towards the goal of making more money without the combined risk of sending work out-of-house to save money for the client, or otherwise kind of undermining your shared goal of making money and doing great work.

Keep your discovery process in house with task-based rates for:

  • Data preparation and quality control
  • Performing initial document review and culling
  • Preparing for depositions and exhibits
  • Motions to compel


Use Alternative Fee Arrangements When Appropriate

Ricky Brooman

Brooman: I do see more and more clients, especially when we have those initial scoping calls, where they express some pain points about the financial model and the bill-back model that we have. We can enter into negotiations on what's going to work for that client, and understanding how we can adjust our billing system to reach an alternative fee agreement that's going to work for them. This kind of runs the gamut. It can be for small matters, large matters, you name it. It could be pro bono work.

Alternative fee agreements are becoming more acceptable, and clients are asking about them more upfront because when you scope the matter, sometimes the billing model just doesn't fit the mold for that particular project.



Don't Forget the Benefits of a Process—and Tools—That Just Make Sense

Never overlook the KISS method of discovery: keep it simple, stupid. With tools that are powerful yet straight-forward and processes that allow you to control discovery in-house, justifying discovery and improving cost recovery can be significantly easier.

Aaron Crockett, Discovery Guru

Crockett: For me, coming from a small practice perspective, I think it is critically important to find tools that are easy enough for you and your staff to use effectively, so that you can bring as much of the discovery process as possible in-house and your people have the expertise in the matter that comes with it.

Hopefully, that tool going to come with a simple billing. It's going to be really easy to explain to clients.

Having processes that are straightforward, easily repeated, easily documented means you're not grinding away a lot of staff hours trying to generate the documentation that you're going to need down the road. If you can find client-friendly, firm-friendly tools and processes, then you're well prepared to highlight the value of discovery services.

"If you can find client-friendly, firm-friendly tools and processes, then you're well prepared to highlight the value of discovery services."


About Our Experts

Jennifer Williams, Director of Practice Support, Vinson & Elkins

At Vinson and Elkins, Jennifer Williams directs all aspects of litigation support technology and electronic discovery. With two decade's worth of experience at Vinson and Elkins, Jennifer coordinates the use of the firm’s practice support technology for electronic discovery, data analysis and management, database support and design, and trial presentation.

Ricky Brooman, Litigation Support Project Manager, Saul Ewing Arnstein & Lehr

As Litigation Support Project Manager at Saul Ewing Arnstein & Lehr LLP, Ricky Brooman consults internal and external clients on best practices for eDiscovery and information governance, and manages all phases of the EDRM for litigation matters.

Aaron Crockett, eDiscovery Counsel, Harrang Long Gary Rudnick

Aaron Crockett is eDiscovery Counsel at Harrang Long Gary Rudnick in Portland, Oregon. There, his practice focuses on the management, analysis, and production of digital evidence in civil litigation and other contexts.



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