Pricing: Compare, Contrast, Decide, Repeat

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

Many of you have been in the position to “do the math” on eDIscovery vendors. It used to be more complicated, then almost everyone went to gigabyte pricing models. But hear us out – it might be worth taking a look at something that falls outside that category.

Subscription pricing is certainly coming into its own in the eDiscovery field, and we’re here for it. But just how to compare? How to set up the math so that it’s easy to figure out which way to go? We’re not saying there’s a right way for everyone, because there isn’t. First, let’s look at some of the models available.

Case-By-Case Model

Pretty easy to understand this one – with each case, you can use a different vendor, a different tool, or any variation you’d like. Everything is separate, it’s logically simple, and you can use whichever vendor you want for each case. This is helpful in a scenario where one case is huge, another is tiny, and there’s just not enough of them to warrant a full-blown system. But it may surprise you (below) that case by case can really add up, especially if they last a long time.

With most per-project models there is no ability to write things off or perform pro bono work without either the firm or the vendor incurring the cost. Also, with per-project pricing, it can be difficult to disable projects and incur no billing. There’s also the issue of mistakes: if a production is created incorrectly, you often pay for it even if you delete it. The case-by-case model tends to be most affordable for projects under 10 gigabytes.

Subscription Model - Month-to-Month

This model has some of the flexibility of case by case but with a bit more consistency. You’re committing to using the same platform, but the usage may not be the same each month. There are no long-term contracts, so the size and use of the system can float.

With most subscription models there is an ability to discount or write off projects as they can be absorbed as costs to the law firm just like owning Microsoft Office or a legal research subscription. Usually, you can disable a project without impacting the total cost of the platform. Subscription tends to be beneficial for large projects over several terabytes.

Subscription Model - Yearly

The yearly subscription model has the ultimate in consistency. You’re on the same platform, you likely have enough cases going at once that it’s much easier to toggle between them than go into different systems. You’re likely moving data in and out regularly and there’s a big benefit to being able to do so in the same place, in the same way over the course of a year. But the cost warrants the larger number of cases going at the same time.

As in the subscription model month-to-month, you can write off projects or disable or suspend them (which can be helpful during settlement discussions or appeal deadlines). Subscription pricing allows you load data or create a production and need to delete, since the billing is based on an allowable size. Mid-sized projects could go either way – subscription or case-by-case but the better cost savings tends to be on the subscription side.

Comparison

In our experience small projects tend to become larger than anticipated with regularity. Law firms are understandably averse to the idea of having a fixed monthly cost for eDiscovery that they aren’t guaranteed to recover form their clients every month. This is why much of the market has shifted to prices between five and twelve dollars a gigabyte for hosting their data in eDiscovery platforms. Possibly the largest variable is the vendor hours for anything you can’t do in your system (loading, productions, etc.) But those actions directly influence the cost if you’re paying per GB per month.

For instance, they might decide to create images of every document at the onset of the loading under the auspices of making it easier to do productions later, but this increases the hosting gigabyte number. Most modern platforms should be able to image data efficiently that it only needs to produce (and not everything). In another example, the OCR process retains high quality images but there aren’t many tools that then go back and delete the images once OCR is complete. This results in paying for temporary work product needed to perform other functions.

So, which way to go? The answer is – it depends (our favorite non-answer!) There are certainly circumstances where project costs are ideal, but in general we find that clients are the happiest with some kind of subscription model, particularly given how prevalent and document-intensive modern litigation has evolved.

Any Way to Make This Simpler?

There is, and we’ve put together a grid to help. These prices are just theoretical, but here’s a way to take a look at what case by base, month to month subscription, and yearly subscription could look like. We’ve included systems with multiple sizes in terms of both users and gigabytes just for a reference point.

Conclusion

Cost may not be the most important thing, so keep in mind that the usability of a system, how easy it is to get support, and other factors may weigh heavier than simply the dollars on the check. It all depends on your particular needs, and remember that those can change from year to year, so be sure to continue an evaluation of what you have and what you need.

What did you think? Any good takeaways? Let us know here.