This is part two of a two-part discussion on the impact of eDiscovery costs during an economic crisis. Read the first installment, on how the current economic climate is impacting law firms and accelerating discovery pricing trends, here.
If you’re facing increased pressure to cut costs, we understand—and here’s how we can help. For law firms looking to migrate active matters off high-priced platforms, Logikcull is currently waiving some processing fees and offering free migration support. That means that, after your first month, a migrated matter costs only $295 a month, whether you have 10GB or 1,000. Contact us for details.
And if you’re currently facing financial hardship, let us know. We may be able to provide financial assistance to support your usage of our product. Contact us here to discuss.
eDiscovery pricing is broken. In a world of rapidly increasing data sizes, legal professionals are faced with a constant signal-to-noise problem: separate the information that matters (the signal) from that which does not (the noise). But there is so much more noise than signal.
Separating the valuable data from the junk, though, is only part of the problem—and it’s a problem all eDiscovery companies are working furiously to solve.
But technology alone isn’t enough—particularly in today’s economic climate.
When that technology is prohibitively expensive, the benefits it brings can be significantly undermined.
After all, what’s the benefit of technology that's so expensive clients won’t approve its use? What’s the benefit of technology that can handle immense data sizes in litigation—but at a cost that’s equivalent to, sometimes even in excess of, antiquated, eyes-on linear review?
Take, for example, the paralegal who loves a platform but rarely gets the chance to put it work, because clients and partners don’t want to face the five-figure monthly costs. Or take the TAR dispute that reveals a discovery process that moves no faster than traditional, manual review—while costing millions of dollars.
This isn’t solving the problem of eDiscovery; it’s making it worse.
That’s because the pricing models behind discovery technology make three enormous mistakes:
It’s a bit cliche these days to point out the skyrocketing growth in data sizes. If you’ve ever used a computer in the last few decades, you’ve seen it first hand—the evolution from the 8-inch floppy disk capable of holding less than a megabyte to today’s multiple-terabyte, solid-state drives to the truly unfathomable amount of data held in the cloud.
It’s not just data size that’s growing, though. It’s data sources. All these Zoom conferences, Slack workspaces, Microsoft Teams, and the like that businesses are moving to today are also going to be the source of discovery data tomorrow.
“Hosting fees punish you for data. The more data you have, the higher the bill, no matter what. In a world of exponentially growing data sizes, that’s simply unsustainable.”
Here’s one thing you can be sure of with new data sources: as with data of old, most of it will be junk.
In the near future, discovery platforms will be as chock full of irrelevant videos and meaningless Slack eDiscovery data as they are with duplicate docs and spam emails today. For the typical Logikcull user, for example, only a tiny sliver of data added to the system is shared out to requesting parties. A recent case study on corporate in-housing found that 43 percent of a company’s data uploaded to Logikcull was duplicative. The fact is, when it comes to discovery, there’s just not a lot of responsive data out there.
You still have to deal with unresponsive data, though—and there’s plenty of it. For platforms that charge based on per-GB hosting fees, every new addition of data comes with a cost—a potentially significant one.
Those costs are even more pronounced with data types, such as video recordings, that are much larger than your traditional emails and word processing documents. A recording of a single meeting can easily be one gigabyte of data alone. That’s the rough equivalent, in data size, of about 20,000 pages. Multiply that by dozens of meetings across dozens of people and you’re easily looking at multiple terabytes of data in even routine matters.
Hosting fees punish you for data. The more data you have, the higher the bill, no matter what. In a world of exponentially growing data sizes, that’s simply unsustainable.
“The most you can pay for a gigabyte of storage on AWS today is 2.3 cents per GB. Yet it’s still industry standard for discovery providers to charge $30 per GB, per month in hosting fees—a 1300X markup.”
But here’s the kicker: data hosting is cheap. Dirt cheap. So cheap that, when you actually look at the difference between the rate to host data on the cloud and the price end users pay, it’s hard not to be shocked.
Cloud storage has been commoditized, with major cloud providers like Amazon Web Services charging pennies per GB.
The most you can pay for a gigabyte of storage on AWS today, the most, is 2.3 cents per GB.
Yet it’s still industry standard for discovery providers to charge $30 per GB, per month in hosting fees. Fees up to $60 per GB aren’t even uncommon.
Compared to that 2.3 cents, $30/GB is a 1300X markup.
It’s no wonder clients find such prices hard to swallow and firms find them hard to justify—particularly in today’s climate.
During the typical lifecycle of litigation or investigations, it’s not uncommon for projects to undergo significant periods of dormancy. This is particularly true for the discovery process, when an intense period of work may be followed by months of inactivity as the matter proceeds.
But any pricing model that applies a hefty monthly rate during downtimes ends up punishing its users for that inactivity.
“Legal professionals shouldn’t have to choose between maintaining a discovery database or maintaining their client relationships.”
That 100-GB matter referenced earlier? At $30 per GB it will cost users $3,000 per month, whether you’re in the heyday of review or simply waiting for litigation to advance down the road. When active review subsides, legal teams may choose to delete the matter in order to eliminate the high monthly costs of hosting it—and hosting costs remain the main source of client push-back on discovery costs, according to the 2019 eDiscovery Billing and Cost Recovery Survey.
But pulling down a matter also typically means losing important work product, whether it be document coding, review notes, or timelines—not to mention the benefit of being able to search across your entire document corpus.
Legal professionals shouldn’t have to choose between maintaining a discovery database or maintaining their client relationships.
The perverse corollary to pricing models that punish users for inactivity are those that punish them for activity as well. And both models can be used by a single platform, to make sure they get you coming and going, as they say.
Any pricing model that limits access to the platform would fall into this bucket. Think user licenses and seat fees, which can skyrocket during an active review.
“Legal professionals shouldn’t have to choose between doing it right or doing it affordably, but that’s often the position such pricing models leave them in.”
Similarly, charges for support time (sometimes masked as “project management”) not only rack up the bill, they disincentivize users from seeking help—which can lead to inefficiency at best, or project crippling mistakes at worse.
So-called “data manipulation” teams and the like would also fit into this category. (They’re the ones who help create load files—often for $250 an hour or so.)
As with charging for support, these approaches to discovery pricing allow the platform to profit off its complexity and lack of ease of use, while pushing users away from resources that could be quite beneficial in the long run. Legal professionals shouldn’t have to choose between doing it right or doing it affordably, but that’s often the position such pricing models leave them in.
We’re in the midst of unsettling times. Admittedly, thinking about discovery pricing models probably isn’t the most urgent matter most people face today. But for those forced to deal with these issues—those looking to cut costs, maintain continuity, and continue supporting their clients—finding discovery pricing that works for today’s reality is an incredibly pressing project.
What does that look like?
It’s pricing that is 100 percent predictable. In the midst of uncertainty, predictability is more valuable than ever.
It’s pricing that is sustainable, as well. Given the crunch we’re all facing, pricing models that punish you for data, downtime, or activity just aren’t tenable anymore.
Find a solution that provides both predictable and sustainable pricing and you’re well ahead of the curve.
If this crisis is a catalyst for anything, let it be a catalyst for a more sane approach to discovery.