Introduction

For organizations involved in complex litigation, the cost of e-Discovery may outweigh the settlement value of the dispute. To accurately weigh the cost of litigation vs. the cost of settlement, parties must first understand the potential volume of relevant documents within their enterprise and the rates that will be charged to collect, process, review, and produce the documents to the opposing party; as well as the volume of documents to be received and reviewed from the opposing party.

The two biggest cost drivers in e-Discovery are: (1) processing e-files into a searchable database; and (2) document review by the legal team for privilege and relevance. Lawyers who approach e-discovery with the familiar mantra, “preserve broadly and produce narrowly” will be shocked at the cost and time required to acquire, review, and produce a population of electronically stored information (ESI) for opposing counsel, which is in compliance with the amended Federal Rules of Civil Procedure. This article will discuss how organizations can assess their potential costs of e-Discovery for a particular matter before beginning the costly process.

• Internal costs – While perhaps harder to quantify, complex litigation eats up internal resources within the law department, IT Department, Records Department, and productivity from key employees involved in the matter;
• Vendor costs – E-Discovery vendors will often be utilized to ensure that the collection process was conducted in accordance with forensically sound methodology. In addition, vendors will be utilized to normalize data from disparate systems, de-duplicate files, and cull files based upon certain meta-data criteria and key words. The cost for vendor services is normally a factor of the per gigabyte volume and it is not uncommon for vendors to charge $750-$1,200 per gigabyte for their services;
• Cost of legal review – The cost for lawyers to review the document population for documents that might be privileged, confidential, or not relevant to the dispute can be staggering. For example, if a lawyer’s bill rate for document review is just $100 per hour and their review rate is 30 documents per hour, the review cost is just $3.00 per document. While this may not seem like an unreasonable rate, a single CD of 650 MB could hold up to 10,000 documents. To put things into perspective, 10,000 documents equates to 70 reams of paper, almost 6 feet high when printed. If the 650 MB were PST files, the volume could be 5,500 emails and 1,600 attachments. Using the assumed rates above the cost to process and cull the e-files would be less than $1,000 but the cost to review the 650 MB of email files on a single CD would cost over $21,000.

Lower the Volume, Lower the Cost

The obvious rule in discovery is, the greater the volume, the greater the cost. Lawyers are often shocked by the volume of electronically stored information because they lack an appreciation of the volume of pages various e-media can be yield.

Considering the benchmark of a ream of paper is 500 sheets and approximately 2 inches thick and 3,000 characters (50 lines each with 60 characters per line) = 3 KB = 1 page of information; the following estimates are quite real:

• A single CD = 650 MB = 681,574,400 KB = 221,887 pages = 444 reams of paper (almost 74 feet when printed)

• A single DVD = 4.7 GB = 4,928,307,200 KB = 1,604,267 pages = 3209 reams of paper (over 535 feet when printed) over 1 ½ football fields of paper from one single DVD filled with e-documents.

The following data (Table 1) are estimates. Remember that many variables will affect ALL of the actual numbers below. When working with mail stores such as Microsoft PST or Lotus Notes NSF files, the estimating process becomes more complicated.  These file types compress data within themselves and are actually a sort of database.  You could potentially yield a significant amount of data depending upon how the user or corporation utilizes the email environment.  On average you can expect that a PST or NSF file will yield 1 - 1.5 times more data per GB then a normal e-File population.  That also equates to potentially 1 - 1.5 times more pages of information.

 Assessing the Potentially Relevant Data before Collection     

ESI OnDemand, Inc. has created a Litigation Data Assessment Methodology for organizations wanting to understand the potential volume and costs of e-discovery for a particular matter. The process utilizes structured interviews with personnel from the client’s Law Department, IT Department, and Records Department; along with an automated sweep of key employee PC’s, network email servers, home directories, file shares and other networked data sources at very high rate of speed.

The Data Assessment Report includes a detailed inventory of the potentially relevant electronically stored documents by: key employee custodian, location searched, file type, and date range. The project is performed with the input from counsel regarding the potentially relevant date range and names of key employees who are likely to have potentially relevant documents pertaining to the matter; and the project materials are likely to be protected as attorney work product in contemplation of litigation, and are likely to be strictly confidential.

Insights from the Assessment Process

• Volume and sources of potentially relevant “active” electronically stored information
  1. Sub-totals by key employee
  2. Sub-totals by source
  3. Subtotals by date range
  4. Subtotals by file types
• Volume and sources of potentially relevant inaccessible media
  1. Disaster Recovery Tape inventory
     1. Sub-totals by date and media type
• Estimated volume of potentially relevant paper documents
  1. Active files on-site
  2. Achieved files off-site
• Costs estimate spreadsheet for fees and expenses:
  1. Preservation and collection of potentially relevant electronic and paper documents
  2. Processing documents into a searchable database
  3. Culling the database for key documents
  4. Hosting the documents on a review platform
  5. Attorney Review time