eDiscovery Pricing: How to Avoid Getting Stuck with a 'Lemon'

This article was posted as original content on the ACEDS Blog, and written by Gavin W. Manes.

How do you find the right pricing solution for your eDiscovery projects? It's not always the easiest topic of discussion but using the wrong pricing can drive up costs substantially over time. A flat fee approach may work well in some cases, per gigabyte in/out or per month may suit others, and user-based pricing may benefit certain matters. And hourly rates for assistance add yet another variable to consider. Even seasoned eDiscovery veterans can struggle to sort through all the options and determine the most advantageous strategy.

This article covers current pricing models to help you examine if you're taking the best approach. There are questions to ask an eDiscovery provider, alternative pricing models to evaluate, and factors and trends impacting the industry – all to arm you with recommendations for selecting a pricing plan.

Cloud-Based Platforms

Over the past decade, eDiscovery has shifted from on-premises to the cloud. These DIY solutions have automated many steps in the EDRM process delivering significant efficiency for users.

The benefits of cloud platforms and offsite data include segregation of data and protection through significant security measures. The provider is responsible for updating software versions and hardware, taking these notable responsibilities off the client's hands.

Cloud-based platforms have grown so popular because they are easy to use and easy to get started. There is a lower footprint that is very conducive to today's remote work.

Standard Pricing Models

Pricing can generally be categorized into three types – pay-as-you-go, subscription, or user fees. Pay as you go models tend to be higher per gigabyte, while subscription tends to have a lower per gigabyte rate. Additional questions include asking about fees for near-line or offline access, the inclusion of analytics, how project management hours are calculated, and hardware fees.

Many providers offer alternative pricing models such as per-matter, flat rate, or bundled services. Per-matter finds a way to combine the services needed on a particular project – for example, a charge for ingestion in the month that occurred and then monthly user fees thereafter. Flat rates are rising in popularity and indicate which services are included for a fixed period of time. Another option on the market is a DIY model combined with some project management time or other white glove services. Subscription and DIY are drivers in the generation of alternative pricing models.

What's in a Gigabyte?

The most common model charges per gigabyte per month. But what does that gigabyte mean? It may not be obvious until you receive the monthly invoice.

In almost every case, you begin by uploading some information that expands upon processing (for example, a .PST file). Once processed, it can increase in size with near-native, text files, and attachments. Some vendors may charge for the original .PST, the processed .MSG, and its attachments, such as an Excel spreadsheet; in a case like this, an attachment would be stored three times. Text is fairly expensive to store because it has to be inside a database and index to make it searchable. A rule of thumb is that ten percent of the data being processed will go into text storage. Note that a processed gigabyte also includes metadata stored in a searchable database.

The review process adds more data to storage by images added during review, redaction, and production. TIFF files are the most common image format, and they can be quite large. At the conclusion of the review, creating a production with Bates labels or endorsements adds storage of the document image and metadata again. Production sets are typically large because they contain images and native files.

It is critical to ask questions about what comprises the gigabyte fee when evaluating or choosing an eDiscovery platform or vendor – is it on compressed gigabytes coming in? Expanded gigabytes once processed? Are production gigabytes charged at a different rate?

Also, be sure to inquire whether analytics and predictive coding are included. Some vendors provide an all-in-one rate, and others charge separately for analytics.

Example Case Scenarios

Pricing considerations are different by the type of case. Small or medium-sized matters tend to be one-off, from a few gigabytes to about a hundred, and this is where per-matter pricing makes the most sense. If a client had several of this type of case, a subscription model could also be a viable possibility.

If a client has a collection of ten to fifteen matters, the subscription model makes the most sense. If the cases don't get too large, this tends to be the most economical way to go. Subscription is also a sound consideration for a client migrating platforms.

Large cases have enough unique qualities that pricing per matter is the best route to go. If there are many large productions, like in an MDL scenario, there might be a need for additional outside expert help or a vendor that can help train on the particularities of a custom workflow.

Long-term cases work with any model, but the biggest key is what to do when the case winds down for a few months. If there aren't as many users needed for a period of time, questions about near-line or cold storage are essential as are discussions about how to bring it out of storage from both a pricing and timing perspective.

Questions to Ask Your eDiscovery Providers

• How do you calculate gigabytes online? – Understand what's in the gigabyte each time and when the gigabytes are calculated.
• Is there an additional charge for analytics or predictive coding? – Either flat fee, per gigabyte, or hours for an expert to assist.
• Are there additional user fees if I want to share access with other users? – Will you want to share access to the platform.
• Are there any additional fees? – For example, getting all the data out of the system.
• Do you offer a "near-line" option if the case is paused? – If the case may be inactive for some time.
• Can I get a free trial period or proof of concept before committing? – Most any vendor will let you do this; use it to your advantage to see how easy the tool is to use for your purposes.

Recommendations for Choosing a Plan

Be sure to consider your case workload – how often you start a new case, how big those cases are, and more – and exactly how you use eDiscovery software. It's also important to understand what you're paying for, what the platform's capabilities are, how gigabytes are calculated, and if there are any additional fees. Consider working through a service provider to ensure you have all the capabilities you need for your projects.

And for more information, watch the on-demand webinar with expert insight from Doug Austin of eDiscovery Today.