These absurd vendor invoices show eDiscovery is still stuck in the stone age

Remember back in the 90s when you expected the new millennium to bring flying cars and world peace?

Some things just don’t change as fast as you hope. And one of those things is eDiscovery.

One would think, for instance, that line-item vernacular like “data imaging of produced data“ and “hibernated subcollection” would have worked its way out of the vendor lexicon in the course of the last 20 or so years -- for one, because regular humans don’t talk like this and, two, because… well, haven’t we milked those cows long enough?

But where almost every other professional and personal walk has been dramatically transformed by technology in the past 20 years -- think about how you listen to music, or communicate in the office, or get from point A to point B -- good ol' eDiscovery just keeps doing its thing.

Now, to be fair, there are a lot of companies working hard to trim the fat from this larded system (“20% off after the first five terabytes!”).

But, in the absence of any meaningful innovation (predictive coding is more than a decade old...), most are just trying to get it while the getting’s still good -- record companies marking up CDs on the eve of streaming.

So buyer beware.

Let’s take a look at a basket of vendor invoices and proposals we’ve recently come across to illustrate this point. All fees detailed below are rates that have been published within the last 24 months, with some coming as recently as January.

Spend $20k, Get a Free Hard Drive (A $36 Value!)

Now this is genuinely comical -- vendor markup in its purest, most unadulterated, most “let’s just sneak it in and see if anybody says anything” form.

In other tech-focused industries, the joke would be as simple as, "wow, we’re still using physical media?"

But again, this is eDiscovery, where those 1 TB hard drives you get at Walmart for $13 are leveraged as incentives to get you to sign on the dotted line.

Let’s take a look…

☝️ These guys are listing a hard drive (of indeterminate capacity) for $199. Ah, charm pricing!

☝️ This vendor is charging $300 for a 1 TB hard drive -- which, in addition to being about 1000% more than rack rate, is, in this case, something you might actually want to consider, because, apparently, if your filters change after archiving your data, you’ll most definitely need a backup to restore that data to its desired state.

☝️ Now here’s something you don’t see every day: an “external padlock.” I’ll be honest, I had to do some Googling for this one. Turns out an external padlock is just a hard drive that can be password protected. Basically a digital gym locker. Because, you know, if you’re going to be mailing evidence, the very least -- literally, the VERY least -- you can do to protect that data is to combo lock it. Apparently some come with a “brute force self destruct” feature, which I think means, in a bind, you can crush it with a shovel.

Again, while most vendors specify a rate for physical media, it’s usually just a bargaining chip. So ask that it be thrown in for free. You’re familiar with how the dinner mints at the four-star steakhouse are “complimentary”? Same thing.

Pro Tip: Make sure your burning fire occurs on a weekday

So, usually, litigation is something that you can plan out far in advance, which is why, if you’re reading this post, you’ve probably never had to work on the weekends or during a vacation.

This is why your vendor will likely charge a premium for “off hours” (their off hours -- not yours) -- to deservedly punish you for your inability to predict the dumpster fire that has just fallen into your lap at 4:47 on Friday afternoon.

Now, to be fair, there are reasons to mark up your rates when they fall outside the traditional 9-5. Labor is generally more expensive and less available. And because you have your client over a barrel.

But surge pricing is just the tip of the pro serve iceberg. Generally speaking, you should plan to come out of pocket every time somebody does something (i.e. the task isn’t automated by software). And, as a rule of thumb, those somethings are usually button pushes disguised as value-adds. See, for example, the “consultative and customized support” that, in the instance below, includes “transmittal... of electronically stored information” (this means sending an email).

Other examples of this type of $150+-hour work include...

☝️ In Logikcull, this means clicking "create new project"

☝️ "Drag-n-drop" in Dropbox lingo

☝️Meaning, typing words like “privileged,” “hot,” and “unresponsive” into a computer field.

☝️Question: If punching the delete button is a professional service, why don’t you see more “Sr. Deletion Specialist” titles on LinkedIn? (Bonus points if you caught the $200 hard drive surcharge.)

Also beware the type of catchall language that, in as many words, states: we can charge for anything at our discretion. Examples found above include “including but not limited to” and the tautological definition of professional services as any “billable operations.”

The Tyranny of the Decimal Point

If you’ve ever wondered how many different ways you can divide a billable hour, you’re in fine company.

It’s standard practice for vendors to bill in six-minute increments (.1 hours), which means, if I was making eDiscovery money to write this post, I’d have charged my employer $39 for the last paragraph. You're welcome!

“I’ll Get You, I’ll Get You in the End” ~ John Lennon/Vendors

Among the most nickel-and-diming, and most frustrating, of eDiscovery vestiges is the practice of per-page fees, which generally appear during the production phase -- one last opportunity to extract a proverbial pound of flesh.

These fees appear to be minimal -- usually a couple cents per page for “imaging” (i.e. converting to TIFF or PDF), OCR’ing and/or Bates numbering (the digital version of barcoding) -- but they sneakily add up.

☝️Gives new meaning to “Just my two cents.”

Consider a 100 GB collection that is whittled down to a production volume of 5 GB. And assume each gigabyte consists of 15,000 pages -- a conservative estimate. Now multiply that number by $.02 per page.

That penny charge is now $1500-and-don’t-let-the-door-hit-you-on-the-way-out.

What’s funny (not in the ha-ha sense) about these production fees is that they show eDiscovery’s unmistakable lineage to the days when litigation support still meant printing out reams of email so it could be read and marked up by fleets of attorneys.

For context, Kinko’s went kaput in 2008.

The many flavors of “getting data into our system so you can use it”

Unfortunately, with many eDiscovery companies, the biggest barriers to entry generally pile up around various facets of data processing -- and these typically manifest as tiered per-GB tariffs that build on each other as the amount of data is whittled down.

Here’s a pretty standard breakdown of processes/buzzwords, from least expensive to most expensive. 

• Ingestion: removing system files and duplicates; capturing date ranges; indexing text     
  
• Processing: metadata extraction and indexing; “breaking” of password-protected files; handling of “native files” (or basically anything that’s not a PDF or scanned file)  
  
• Promoted for review: This is another way of saying that you’re going to pay extra for the stuff that you actually need to look at.
  

Typically, you’ll encounter additional fees should you have to deal with discovery files that have been exported from another vendor database (joke’s on you plaintiffs counsel), or otherwise derive from a proprietary system. And yes, in addition to the per-GB rate you’ll pay, you should also expect to be tagged with pro serve fees for handling of said database.

Together, you’re looking at somewhere between $175 to $300 per GB just to get data into the vendor’s system -- before monthly hosting fees, user fees, analytics fees, fees to perform “complex” or “custom” searches, we just feel like it fees, and so forth.

Luckily, you should expect bulk discounts, which may resemble the schedule below.

Now, granted, these price breaks might not look very attractive on the surface -- given that they don’t kick in till the **fifth terabyte.** 

But look at it this way: after you’ve burned through more than 3x the average lifetime savings of a US household, $20 a gig is going to feel like sweet, sweet relief.