Like an octopus and its 8 legs, covered in suction cups to grab and hold its prey, trying to get a grip on the estimated costs of eDiscovery is an important aspect that any organization and its Litigation Response Team (LRT) need to understand.
There have been a number of articles that have been published that look at the costs from a generalized or high level perspective:
- Degnan D. Accounting for the Costs of Electronic Discovery. Minnesota Journal of Law, Science & Technology. 2011;12(1):151-190.
- The Rand Corporation: Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery
- Nicholas J. Wagoner: Will E‐Discovery Cost Recovery Catch The Supreme Court’s Eye?
In these articles they calculate an overall cost per GB of source data. The range in pricing is wide, but is so for good reasons. No matter is exactly the same. So, what can you do to help put a more realistic calculation together?
Here are 8 metrics that you should consider figuring out to help you get a grip.
- Number of custodians.
- Historical averages of key data types for previous matters. E.g. Mail and network file sizes.
- A summary of services and costs from vendors previously engaged. If you have more than one vendor for different service offerings, you may consider using the average of the costs. For example, some services to consider including would be Processing, Consulting rates, Reviewer rates, Data storage fees, Production fees, and Coding fees.
- A summary of review metrics for previous matters. E.g. Average # of documents reviewed per reviewer per hour.
- Average number of documents per GB of data based on previous matters. If you don’t know there are a few industry standards out there, but the best one that I have found indicates 3000 to 4000. So use 3500 as a starting point. (How Many Documents in a Gigabyte: 2016 Edition)
- Average responsive rate for previous matters. The standard relevancy rate that gets used seems to be 20%. (The Most Important E-Discovery Metric: The Responsive Rate)
- Average labor hours and rates for data collection specialists. Such as IT Teams, Consultants, Forensic Services and Data Restoration.
- Average labor hours and rates for any Data Transformation Services for Legacy Systems and Structured Data Systems, etc.
So, here is a quick collection of formulas that would use these numbers above to give you a bare bones estimate:
Estimated Email Volume = # of Custodians x Average Mail File Size (you may need to adjust to GB)
Estimated Network Volume = # of Custodians x Average Network File Size (you may need to adjust to GB)
Total Estimated Volume (GB) = Estimated Email + Estimated Network
Estimated Cost for Processing = Total Estimated Volume (GB) x Processing Rate
Estimated Number of Documents = Total Estimated Volume (GB) x Average # of docs per GB
Estimated Hours of Review for First Level Review (Worst Case) = Estimated Number of Documents / # of Docs Reviewed per hour average
Estimated Cost for First Level Review = Estimated Hours of Review for First Level x Reviewer’s Hourly Rate Average
Estimated Number of Documents for Second Level Review (i.e. Responsive or Relevant) = Responsive Rate x Estimated Number of Documents
Estimated Hours of Review for Second Level Review = Estimated Number of documents for Second Level Review / #of Docs Reviewed Per Hour Average
Estimated Cost for Second Level Review = Estimated Hours of Review for Second Level x Reviewer’s Hourly Rate Average
Total Estimated Cost = Estimated Cost for Processing + Estimated Cost for First Level Review + Estimated Cost for Second Level Review
You might think that there is more to this. There could be. Depending on the matter, and the scope of the collection, you will end up having more services that would be added into the overall cost.
Here is a good presentation that shows a number of the metrics that can be used or tracked: It’s a Numbers Game: The Value of eDiscovery Metrics. It contains some metrics I have mentioned above and others that you may want to consider.
The point in the end is that the LRT and Legal Counsel need to have a realistic understanding of what the costs could be up front, to help them grapple (asses and decide) on a number of questions that they may have when developing their initial responses or plans to meet the requirements of the matter in question.
For more information about how we can help you, check out our eDiscovery Services and service details.