E-Discovery Cost Drivers

The discovery phase can represent more than fifty percent of total litigation costs. These costs are driven up by the volume of a company’s electronic data, and also by the strategies that are implemented by in-house and outside legal counsel to preserve, collect, review, and produce documents.

In general, parties tend to over-preserve information. This may reduce spoliation risk, but it has its own costs. Shifting from a “preserve everything” to a more targeted preservation strategy can comply with the good faith and reasonableness requirements. Courts have recognized the costs associated with having to maintain large amounts of data and often refuse to require parties to preserve all data.

A company considering a targeted preservation approach should involve members of legal, IT, and records management, and it should plan and document all aspects of the process to enhance defensibility. Keep in mind that releasing a legal hold is just as important as issuing one. Accumulation of unneeded data increases data storage costs and creates litigation risk.

Data processing typically includes reducing the volume of ESI for review through techniques such as de-duplication, converting ESI to a more suitable format for review and production, and using contextual analytics to group or categorize the ESI. To decrease these expenses, organizations can look at different ways to staff document reviews using lower cost options (e.g., contract resources, LPOs, or a hybrid law firm-contract attorney model) and considering whether technology assisted review is appropriate.