How Data Minimization Reduces the “Data Tax”

Data visibility is a prerequisite for effective governance, but it is not the end goal – data minimization is. According to an Exterro blog post, data minimization reduces the “data tax” and is the real return on investment (ROI) of data governance. For legal ops professionals, the value becomes evident when organizations move from simply knowing what data they have to intentionally reducing what they no longer need.

Data accumulation is often treated as a default safeguard in reactive environments, resulting in a data tax consisting of spiraling storage costs, heightened breach exposure, and inflated eDiscovery spend. Proactive organizations take a different approach. By leveraging a data catalog to identify information that no longer serves a legal, regulatory, or business purpose, they eliminate redundant, obsolete, and trivial (ROT) data before it becomes a liability. The end result is a data ecosystem that is smaller, more defensible, and far easier to manage under pressure.

The financial impact of this shift is most visible in legal and investigative budgets. Reducing data volumes early permanently lowers future spend since document review drives the majority of eDiscovery costs. Minimization also curbs over-preservation and over-collection, practices that often arise from uncertainty and lead to unnecessary processing and hosting expenses. Over time, this improves budget predictability, enabling organizations to redirect resources from emergency discovery efforts to strategic initiatives. 

Data minimization also functions as a core cybersecurity control. A smaller data footprint reduces the extent of damage from a breach and limits regulatory exposure when an incident occurs. Organizations that actively eliminate data they should not retain are better positioned to detect threats faster, respond more decisively, and demonstrate good-faith compliance with retention and privacy obligations. 

When minimization is systematic, auditable, and legally defensible, it transforms governance from a defensive necessity into a source of operational resilience and competitive strength. For legal ops professionals, data minimization is the real ROI of data governance.