While custodial costs and volume metrics are essential to understanding and controlling overall discovery costs, the recently concluded survey shows that you may not be alone having difficulty tracking the metrics.
The Huron IMPACT Benchmarking Survey provided some insight into discovery costs and the associated metrics when participants were asked their average discovery cost per custodian in 2009 and the average volume of custodian data. Just a minority of provided, or may have been able to provide, the metric information. The responses collected spanned a wide range in both custodian cost and data per custodian.
Custodial costs and volume metrics are difficult to track, given that components of discovery costs are not standard in most e-billing systems, and therefore it is not surprising that a majority of participants did not respond to these questions. Creating meaningful metrics can be even more complicated.
Custodial cost and volume metrics are highly variable by industry, company, and types of matters. When establishing metrics to control custodial costs and volume, consider the following leading practices:
Tracking or being knowledgeable about what data is included in the metric
The type of data being collected has an impact on discovery cost. We recommend segmenting data into four categories: network email, hard drives and hard drive email, group shares, and home share.
Clearly defining “custodian” and the types of custodian
Understanding the average volume of data and cost per custodian is only useful if you clearly define the custodians. Most companies have different types of custodians with different volumes for each type of data (e.g. network email, local email/hard drive home share, and group shares). Managing discovery cost requires knowledge of the different types of custodian and their data volumes.
Identifying the costs and type of activities to be included in the calculation and how they are measured
There are five major activities within the discovery process: collection, processing, hosting, reviewing, and production. Cost is variable across all five activities and can be controlled with various levers including how the cost is incurred. For example, hosting cost can be fixed fee, variable based on GB per month, or captured as part of processing cost. Review cost can be either hourly or per GB. It may include first pass, second pass and/or redactions. More and more legal departments are using bundled services that incorporate multiple activities together. Understanding the current cost of each activities will help determine the right price to pay for bundled services or manage spend better as separate activities.
As e-discovery costs continue to escalate many law departments recognize the importance of having discovery management processes in place. Companies should create models so that they can get a meaningful estimate based on number custodians, volume of data, and cost per activities performed. The biggest challenge is that components of discovery cost are not standard in most e-billing systems.
Huron has extensive experience in helping its clients develop discovery management programs and establish meaningful, productive metrics to measure success. Huron’s results-based IMPACT™ solution approaches cost control in a systematic way using drivers, enablers and calibrators to address costs, and then measures the impact of these cost control measures.
For more information, or to obtain a full copy of the Huron IMPACT™ Benchmarking Survey, please contact: