August 4th

Getting Predictable: 5 Little Known Hidden eDiscovery Costs

Matthew Miller
Matthew Miller

Getting Predictable: 5 Little Known Hidden eDiscovery Costs

Like it or not, embracing the digital era has created a wealth of opportunity for law firms to find and leverage electronically stored information (ESI). However, not all law firms are processing data for multi-million dollar cases. Electronic discovery service providers are in a similar situation with document review projects being of varying sizes. The challenge then becomes managing the cost associated with document review, and providers have come up with a few pricing model variations. For law firms and corporate legal departments utilizing eDiscovery software, the key to controlling total eDiscovery costs is being aware of hidden fees.

Vendor Fees

When it comes to transparency in eDiscovery costs, service providers definitely have some room for improvement. Asking to see your eDiscovery invoice in detail is a good way to gauge what pricing info isn’t immediately accessible to you. In some cases, this is also a good way to see the origin of the costs you weren’t expecting. You’ll get a good look at what is driving up costs, and most of the time it is various vendor fees.

Many firms are in for a surprise on their first eDiscovery bill because the hours for project management and processing costs weren’t explained to them from the onset. This is especially true in the case of project management. Although prices vary widely based on experience and skills, these hours are generally billed at a higher rate. This is because PMs usually have valuable knowledge in eDiscovery and play an important role in processing.

Processing is one of the main charges in an eDiscovery bill, but some providers divide this service into multiple categories like ECA, OCR, and Native so they can bill more hours. In addition, many providers charge consulting hour rates for answering simple support inquiries.

Opportunity Cost

Have you ever thought about what you could be losing in opportunity cost? What if your current litigation support service is costing you extra when there’s a better alternative out there? Consider the difference in cost between an eDiscovery software that charges extra for add-on tools or other hidden fees and an all-in-one solution with tools included.

Users tend to save time when they leverage an all-in-one solution with every tool seamlessly integrated. Eliminating the interruptions of switching to add-on tools or jumping through other hoops creates a more efficient workflow. The financial benefit of a platform where every tool is consolidated can be exponential, especially with large cases. Reveal’s case studies even indicate that clients have saved more than six-figures from quotes provided to them by other service providers.

Case Termination Fees

The fees for a case termination and taking data offline can vary, depending on the vendor and the size of the case. For a smaller case, it may not be much but a large matter could mean thousands of dollars in case termination fees. Too often, this hidden cost is not disclosed upfront and tends to come up only when a firm needs to delete data at the conclusion of a case. One should inquire at the beginning of a project whether there are “termination fees” and/or the costs of migrating data to “cold storage” in the event a matter is delayed for a significant period of time.

Unpredictable Vendor eDiscovery Pricing

Predictability is integral when developing a budget, so it’s important to be able to rely on the prices you are quoted. Unfortunately in eDiscovery, pricing can be unpredictable when dealing with some service providers. Most of the unpredictability comes from camouflaged costs like processing and consulting charges.

Per gigabyte pricing is a well-known pricing model in eDiscovery that is still common in the industry. In some cases, per gigabyte pricing is an easy way for vendors to sneak in hidden fees because it’s generally charged as an itemized list of services. Salespeople will skim over the services that are accompanied by extra fees in the interest of not discouraging a potential client.

Reveal approaches this differently, with a more transparent price model based on data volumes.  Data volumes control the majority of our cost because we do not charge user or license fees. Instead, clients are only charged for the data hosted every month. To make big cases affordable, our ECA tool helps reduce data volumes, which in turn reduces the total cost.

Compare this pricing model to the so-called “Freemium” tactic, another model that complicates predictability and doesn’t really live up to its name. This strategy markets certain tools or services as low-cost or free to attract customers, while the vendor actually charges more for other services. Essentially, you end up paying for the supposedly free service in other ways, and just like that you’ve fallen for the freemium gimmick.

User Fees

For many law firms and legal teams, the number of users you allow on the platform will drive up the total cost. This is because eDiscovery companies like to charge user fees, a fixed monthly cost for each user who has access to the software.

To put the true cost of these fees into perspective, imagine your firm hires a group of contract attorneys for a large case. Some user fees can be as costly as $120 per user, per month, so paying these fees for a review phase lasting several months can end up being an exorbitant amount. In the long run, this may not be that much compared to the overall review cost, but there are eDiscovery providers like Reveal that don’t charge user fees. This is where user fees circle back around to opportunity cost; how much are you losing by not opting for an alternative solution that doesn’t charge per user?

What does a better price model look like?

A new pricing model has emerged in the industry and it’s simpler than the eDiscovery bills of the past. The goal is simplicity and predictability with a subscription-based or matter-based pricing model. The ability to predict your budget for a project or depend on a regular subscription bill is the best way to stay within your eDiscovery budget.

With a simplified price model like Reveal’s, gone are the days of arguing with your service provider each month about whether the charges on your bill are valid. Attorneys appreciate the minimal number of line items on an invoice and can rest assured they’re receiving a fair price and high-quality services.

Our advice is to conduct research on the various pricing models before signing on to a new eDiscovery solution. There’s more electronic data than ever used in the legal industry today, so an eDiscovery cost you can control and depend on is a necessity.

If your organization is interested in benefiting from our simplified price model and world-class eDiscovery services, contact Reveal to learn more. We’ll be happy to show you how we deliver more than traditional eDiscovery companies, with our AI-powered, end-to-end document review platform.