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Minnesota Journal of Law, Science & TechnologyVolume 12 Issue 12011Accounting for the Costs of Electronic DiscoveryDavid DegnanFollow this and additional works at: http://scholarship.law.umn.edu/mjlstRecommended CitationDavid Degnan, Accounting for the Costs of Electronic Discovery, 12 Minn. J.L. Sci. & Tech. 151 (2011).Available at: he Minnesota Journal of Law, Science & Technology is published by the University of MinnesotaLibraries Publishing.Article 7
121DEGNAN.DOCX (DO NOT DELETE)DegnanD. Accounting for the4/4/2011 8:13 AMCosts of Electronic Discovery. MinnesotaJournal of Law, Science & Technology. 2011;12(1):151-190.Accounting for the Costs of ElectronicDiscoveryDavid Degnan*I.INTRODUCTIONExperts estimate that conducting an electronic discovery(e-discovery) event may cost upwards of 30,000 per gigabyte.1Given the complexity of the subject and the amount of moneyinvolved, many lawyers, litigation support vendors, experts,consultants, and forensic accountants have found e-discovery tobe quite lucrative.2 However, few commentators have offeredguidance to help courts, attorneys, and clients predict and plan3for litigation.4 Despite the lack of research, the civil procedure5and evidence rule6 committees, Congress,7 and courts8 2011 David Degnan.* David Degnan is an associate attorney at Koeller, Nebeker, Carlson, &Haluck, LLP. Author is thankful to Jan Gibson of Baudino Law Group for herthoughtful peer review and Judd Nemiro for his able assistance in editing andresearching this publication.1. Herbert L. Roitblat, Search & Information Retrieval Science, 8SEDONA CONF. J. 192, 192 (Fall 2007).2. See, e.g., In re Fannie Mae Sec. Litig., 552 F.3d 814, 817 (D.C. Cir.2009) (noting that Fannie Mae spent approximately 9% of its total annualbudget of six million dollars on the production of electronically storedinformation for the litigation at issue).3. FED. R. CIV. P. 26 advisory committee note (2006 Amendment) (“Theparticular issues regarding electronically stored information that deserveattention during the discovery planning stage depend on the specifics of thecase.”).4. See Pension Comm. of the Univ. of Montreal Pension Plan v. Banc ofAm. Sec., 685 F. Supp. 2d 456, 472 n.56 (S.D.N.Y. 2010) (relying on how manyhours it took to write the opinion to describe the cost of electronic discovery).5. See generally FED. R. CIV. P. 26 advisory committee’s note (1993Amendment) (“[Parties should] discuss how discovery can be conducted mostefficiently and economically”); FED. R. CIV. P. 26 advisory committee’s note(2006 Amendment) (“[The 26(f) conference and plan] can facilitate prompt andeconomical discovery by reducing delay before the discovering party obtainsaccess to documents, and by reducing the cost and burden of review by theproducing party.”).6. FED. R. EVID. 502 initial advisory committee notes prepared by theJudicial Conference Advisory Committee on Evidence Rules (Revised151
121 DEGNAN.DOCX (DO NOT DELETE)152MINN. J. L. SCI. & TECH.4/4/2011 8:13 AM[Vol. 12:1frequently address the cost of e-discovery. That said, thegeneral consensus is that e-discovery is expensive, timeconsuming, and risky.9First, the discovery of electronic evidence is expensive forclients and the other parties involved. Few seriously debatethis point; however, some argue that the costs of e-discoveryare grossly exaggerated.10 But to make such an accusation (ofexaggerated costs), one must review the process as a whole11and analyze both the external costs of outsourcing and theinternal costs that are borne by the client or insurer inadministering and processing the e-discovery event. Forinstance, the client may hire an expert to help develop internalinformation management protocols, but it still has to train itsemployees on how to use the new email server or softwareprogram.12 These steps require the time, talent, and expertiseof the e-discovery team, which includes upper levelmanagement, in-house counsel, administrative staff, andinformation technology (IT) personnel.Once the information management protocols are developedand implemented, employees must consistently use these11/28/2007), available at (“[The purpose of the rule] is to respond[] to the widespread complaint thatlitigation costs necessary to protect against waiver of attorney-client privilegeor work product have become prohibitive due to the concern of that anydisclosure (however innocent or minimal) will operate as a subject matterwaiver of all protected communications or information. This concern isespecially troubling in cases involving electronic discovery.”).7. Because FED. R. EVID. 502 had to go through Congress before passage,it is included in this list.8. See Pension, 685 F. Supp. 2d at 472 n.56 (relying on how many hoursit took to write the opinion to describe the cost of electronic discovery).9. See, e.g., id. at 461 (“In an era where vast amounts of electronicinformation is [sic] available for review, discovery in certain cases has becomeincreasingly complex and expensive.”).10. John B. v. Goetz, No. 3:98-0168, 2010 U.S. Dist LEXIS 8821 (M.D.Tenn. Jan 28, 2010); Spieker, et al. v. Quest Cherokee, LLC., No. 07-1225EFM, 2009 WL 2168892 (D. Kan. July 21, 2009).11. See Columbia Pictures v. Bunnell, No. CV 06-1093FMCJCX, 2007 WL2080419, at *8 n.19 (C.D. Cal. May 29, 2007) (noting that the expert costprojections were not believable because the expert made assumptions aboutthe process).12. Cf. Arthur Andersen LLP v. United States, 544 U.S. 696, 700 n.4(2005) (explaining that Arthur Anderson helped to train some of Enron’semployees on proper document retention procedures when threatened withlitigation, and outlining Arthur Andersen’s document retention policy).
121 DEGNAN.DOCX (DO NOT DELETE)2011]ELECTRONIC DISCOVERY4/4/2011 8:13 AM153protocols until the company reasonably anticipates a lawsuit.13The company’s counsel must then place a litigation hold on allrelevant documents, suspend its document retention systemand procedures, and monitor such hold until the properdocuments are collected.14 This process potentially involvesevery employee that worked on the litigated matter.15After the litigants meet and develop the proper parametersof the electronic document search,16 the data is collected andprocessed.17 Data processing may involve the cost of retainingan outside vendor to erase duplicates and find documentsresponsive to the requests for production within a largerdatabase of collected files.18 The outside vendor(s) then chargesto process, index, host, review, and finally produce the collecteddata in an agreed-upon format.19Unprofessional discovery tactics may contribute to inflatedestimates and costs. Litigation strategies have often utilized ediscovery to force settlement20 or push opposing counsel into anunfavorable negotiating position.21 This tactic is not new, andsome refer to this practice as “blackmail.”22 Before the digitalera, discovery may have consisted of thousands of unorganizedpaper documents produced in warehouses. The high cost anddaunting task of organizing and reviewing all that materialwould often force a party into settlement.23 Today, this practice13. See, e.g., Broccoli v. Echostar Commc’ns Corp., 229 F.R.D. 506, 511 (D.Md. 2005) (“[Defendant] plainly had a duty to preserve employment andtermination documents when its management learned of Broccoli’s potentialTitle VII claim that could result in litigation.”).14. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 220 (S.D.N.Y. 2003).15. Id. at 218.16. FED R. CIV. P. 26(f).17. FED R. CIV. P. 34(b).18. Steven C. Bennett & Marla S.K. Bergman, Managing E-DiscoveryCosts: Mission Possible, 832 PLI/LIT 177, 180–81 (2010) (outlining the servicesthat an e-discovery vendor should provide).19. Id.20. Kenneth J. Withers, Electronically Stored Information: The December2006 Amendments to the Federal Rules of Civil Procedure, 4 NW. J. TECH &INTELL. PROP. 171, 182 (2006) (“Commentators posited that savvy requestingparties could force settlement of cases simply by threatening electronicdiscovery.”).21. Michael R. Arkfeld, ARKFELD ON ELECTRONIC DISCOVERY & EVIDENCE§ 1.3(g) (2d ed. 2008).22. Daniel B. Garrie & Matthew J. Armstrong, Electronic Discovery andthe Challenge Posed by the Sarbanes-Oxley Act, 2005 UCLA J. L. & TECH. 2, 2(2005).23. See, e.g., Howard L. Speight & Lisa C. Kelly, Electronic Discovery: Not
121 DEGNAN.DOCX (DO NOT DELETE)154MINN. J. L. SCI. & TECH.4/4/2011 8:13 AM[Vol. 12:1still exists, but now the material is data-dumped onto therequesting party.24Second, metadata and other electronically storedinformation (ESI) take time to review and understand.25 Thedata processing stage includes finding important records,redacting sensitive information, and coding relevant andprivileged documents.26 These tasks require months or evenyears, even with the help of software vendors, attorneys, andcontract reviewers.27 If protocols for preserving ESI are calledinto question, the time consumed by this peripheral litigationmay mean additional months or years before the parties cancomplete discovery and focus on the merits of the case.Third, e-discovery is risky.28 Judges have tired ofsophisticated corporations trying to disregard, skirt, or ignoretheir obligations to understand, address, and preserve ESI.29Courts readily impose sanctions when parties destroyinformation contained in email accounts.30 However, having anadequate storage system in place before litigation begins cansave time and money. Otherwise counsel and the client riskpaying both the costs (1) to reactively produce discovery byYour Father’s Discovery, 37 ST. MARY’S L. J. 119, 134 n.49 (2005).24. Withers, supra note 20.25. FED. R. CIV. P. 26 advisory committee’s note (2006 Amendment)(acknowledging delay that electronic discovery causes and proposingcompromise as a way to move the case forward).26. Bennett & Bergman, supra note 18.27. See generally Bensel v. Allied Pilots Ass’n, 263 F.R.D. 150, 151 (D.N.J.Dec.17, 2009) (noting that this case has become known for its eight year legalwar).28. Jason Fliegal & Robert Entwisle, Electronic Discovery in law.richmond.edu/jolt/v15i3/article7.pdf (“Access to all this informationmay be helpful to the truth-seeking function of the courts, but severalproblematic side effects result: enhanced discovery compliance costs, enhanceddiscovery burdens, and the need for lawyers and judges to apply the law tohighly technical topics generally beyond the knowledge of laymen.”).29. See, e.g., Order on Motion for Sanctions and Motion to Strike at 1,Maggette v. BL Dev. Corp., No. 2:07CV182-M-A, 2009 WL 4346062 at *1 n.1(N.D. Miss. Nov. 24, 2009) (“The court has already imposed sanctions upondefendants for what it views as a casual, if not arrogant, rebuff to plaintiffs’repeated efforts to obtain information which is ordinarily easily produced inlitigation.”).30. Courts will not, however, impose sanctions if destruction was theresult of “mere negligence.” Swofford v. Eslinger, 671 F. Supp. 2d 1274, 1280(M.D. Fla. 2009).
121 DEGNAN.DOCX (DO NOT DELETE)2011]ELECTRONIC DISCOVERY4/4/2011 8:13 AM155court order31 and (2) for the other side’s attorney’s fees toinvestigate abuses,32 depose custodians,33 inspect opposingcounsel’s computer systems,34 and file motions related to thespoliation of data.35This article endeavors to explain all the moving parts andassumptions necessary to reach a cost estimate proportional tothe litigation. By appreciating the cost assumptions related toe-discovery, the parties, bench, and bar may find ways toimplement and create new cost effective solutions to approache-discovery. In the next section, this article addresses a short,but noteworthy case in which the court found the cost ofpreserving ESI was too great.36 In the third section, this articleexplains what the costs of e-discovery are at each step.37 In thefourth section, this article explains the many tools that eachparty has to reduce costs and advance the case forward.38 Andin the fifth section, this article will discuss ethical issues thatmay impact and increase the client’s budget for e-discovery.39II. COSTS BURDENS: RODRIGUEZ-TORRES V.GOVERNMENT DEVELOPMENT BANK OF PUERTO RICOIn 2006, the Federal Rules of Civil Procedure (FRCP) were31. See, e.g., In re Fannie Mae Sec. Litig., 552 F.3d 814, 817 (D.C. Cir.2009).32. See, e.g., Capellupo v. FMC Corp., 126 F.R.D. 545, 553 (D. Minn. 1989)(ordering the defendant to pay the fees the plaintiff “incurred in investigating,researching, preparing, arguing and presenting all motions touching upon theissue of document destruction.”).33. See, e.g., Arista Records, LLC v. Usenet.com, Inc., 633 F. Supp. 2d124, (S.D.N.Y. 2009) (finding that it is grossly negligent to send custodians toEurope to prevent them from being deposed).34. See, e.g., Eugene J. Strasser, M.D., P.A. v. Bose Yalamanchi, M.D.,P.A., 669 So. 2d 1142, 1143–44 (Fla. Dist. Ct. App. 1996) (stating thatdiscovery rules are broad enough to encompass plaintiff’s request to enterdefendant’s computer system, but declining to allow access in this particularcase). See also FED R. CIV. P. 34 (allowing for inspection of the opposing party’scomputer systems).35. E.g., TR Investors, LLC v. Genger, No. 3994-VCS, 2009 Del. Ch.LEXIS 203, at *63 (Del. Ch. Dec. 9, 2009) (“Finally, because Genger’smisconduct has occasioned great expense, I award the Trump Group theirreasonable attorneys’ fees and expenses related to the motions for contemptand spoliation.”).36. See infra Part II.37. See infra Part III.38. See infra Part IV.39. See infra Part V.
121 DEGNAN.DOCX (DO NOT DELETE)156MINN. J. L. SCI. & TECH.4/4/2011 8:13 AM[Vol. 12:1updated and specifically addressed the preservation andproduction of e-discovery.40 Since that time, courts havebroadly interpreted such rules to allow for expansivepreservation and production of documents.41 With thatbackground, this section will analyze Rodriguez-Torres v.Government Development Bank of Puerto Rico, a noteworthycase where the court found that the costs and time necessary toproduce ESI were too high—and, thus, prohibitive—making theemails and other ESI not reasonably accessible in thecircumstances presented.42 This case, therefore, serves as agood example of proportionality in the production of ESI.Rodriguez-Torres is a case about an employmentdiscrimination dispute where the plaintiff requested thefollowing electronic materials in discovery:For each year 2007, 2008, 2009, produce in native electronic formatwith its original metadata all e-mail communications and calendarentries describing, relating or referring to plaintiff Vicky Rodriguez,both inbound and outbound from co-defendant GDB’s messagingsystem servers. Particular attention to the following definition ofextract key-words needs to be exercised: a) identification of Rodriguezby different variations of her name; b) designation of pejorative andderogatory terms typically used to demean persons according to theirage and gender (including but not limited to phrases such as: vieja,nena, arrugas, años, edad, etc .); c) designation of phrases which couldbe referring to the current and past litigations, and which couldsuggest retaliatory animus or activities (including but not limited tophrases such as: demanda, caso, testigos, demandada, plaintiff, etc.);d) designation of record custodians to include all co-defendants, andother unnamed GDB employees known to tease, insult and tauntRodriguez based on her physical appearance and age (a description ofthe process is further detailed in the ESI Specialist Report).43Predictably, the defendant bank objected to the productionrequest, suggesting that it was “irrelevant, overbroad and notreasonably calculated to lead to the discovery of admissible40. See, e.g., FED. R. CIV. P. 26 advisory committee’s note (2006Amendment) (“Electronic storage systems often make it easier to locate andretrieve information. . . . But some sources of electronically stored informationcan be accessed only with substantial burden and cost.”).41. See, e.g., Columbia Pictures v. Bunnell, No. CV 06-1093FMCJCX,2007 WL 2080419, at *13 (C.D. Cal. May 24, 2007) (according the FederalRules of Civil Procedure broad applicability with regard to E-discovery afterthe 2006 amendments).42. Rodriguez-Torres v. Gov’t Dev. Bank of P.R., 265 F.R.D. 40, 43–44 (D.P.R. 2010).43. Rodriguez-Torres, 265 F.R.D. at 43.
121 DEGNAN.DOCX (DO NOT DELETE)2011]ELECTRONIC DISCOVERY4/4/2011 8:13 AM157evidence.”44 Moreover, the defendant bank argued that theplaintiff’s request would result in the production of thousandsof documents that its counsel must review for responsivenessand privilege, resulting in costs that well exceed the matter incontroversy.45 The plaintiff responded by filing two motions,one to compel discovery and one for sanctions relating to thefailure to preserve and produce ESI, including emails.46 Afterthese motions were filed, the court requested that both partiesfile a joint informative motion, detailing the cost of e-discoveryand time needed for production.47The parties’ joint informative motion advised the court ofthe anticipated costs of the requested discovery.48 Based on anIT consulting group that prepared a cost report, the itemized49expenses totaled 35,000 to retrieve the requested information.Without divulging the amount in controversy, the courtruled that the requested ESI was “not reasonably accessible”under 26(b)(2)(B) because of the undue burden and cost.50 TheCourt reasoned that “ 35,000 is too high of a cost for theproduction of the requested ESI in this discrimination action.”51However, even if the data is not reasonably accessible, therequesting party may still be able to obtain the sameinformation upon a showing of good cause.52 To that end, theplaintiffs argued that based on three articles, they “expect tofind more relevant information than that which they havefound from the hard copies of documents requested in theinitial request for production of documents.”53 Moreover,“[p]laintiffs anticipate finding communications showingdiscriminatory animus such as derogatory and demeaningreferences, exclusion from meetings, communications and workactivities, and general disregard for Plaintiff Rodriguez’s44. Id.45. Id.46. Id. at 42.47. Id.48. Id. at 44.49. Id. (“(1) 5,000.00 for the configuration and creation of theConcordance Database; (2) 20,000.00 to import the twenty-four MicrosoftOutlook mailboxes that were requested by the plaintiffs; and (3) 10,000 forthe database search and retrieval, and the final ESI report.”).50. Id.51. Id.52. FED. R. CIV. P. 26(b)(2)(B).53. Rodriguez-Torres, 265 F.R.D. at 44.
121 DEGNAN.DOCX (DO NOT DELETE)158MINN. J. L. SCI. & TECH.4/4/2011 8:13 AM[Vol. 12:1abilities.”54 The court noted that the plaintiffs must “provide[the court] with the basis of their belief specifically because theCourt wanted to prevent Plaintiffs from requesting the ESI forthe sole purpose of conducting a fishing expedition.”55 Indeed,the plaintiffs failed to show good cause under Rule 26(b)(2)(B)of the FRCP to attain much of what they requested.56Rodriguez is one of a few cases that discuss the undue costof ESI under FRCP 26(B)(2)(B).57 As such, this casereintroduces the cost consideration into the discovery of ESI. Italso allows judges and producing parties to determine if therequested amount of discovery would be proportional to thematter in controversy or the novelty of the issues. Armed withsuch information, counsel can properly suggest that a requestfor ESI be denied when the matter is of low value or when thediscovery requests seek to do more than fully understand theapplicable claims or defenses.58 Moreover, this case provides anice introduction and a springboard to discuss the costs ofretrieving and producing ESI.III. ADDRESSING THE COST OF PRESERVING AND THENPRODUCING ELECTRONICALLY STORED INFORMATIONEvaluating the cost of e-discovery is complex.Additionally, lawyers, consultants, and litigation supportprofessionals can easily inflate or marginalize the same costdata to their benefit in an attempt to impress the client or thecourt.59 The problem is that it is difficult to predict andunderstand how many documents are in a gigabyte of data,how fast the contract reviewers will review the documents, or54. Id.55. Id.56. See id. (describing the plaintiffs’ request for documents as no morethan a fishing expedition, devoid of the requisite good cause).57. FED. R. CIV. P. 26(b)(2)(B).58. Cf. Aguilar v. Immigration & Customs Enforcement Div. of the U.S.Dep’t of Homeland Sec., 255 F.R.D. 350, 356–57 (S.D.N.Y. 2008) (describingthe test for requirement of metadata as consisting of two primaryconsiderations: the need for and probative value of the metadata, and theextent to which the metadata will make the electronic information moreuseful).59. Cf. Columbia Pictures v. Bunnell, No. CV 06-1093FMCJCX, 2007 WL2080419, at *8 (C.D. Cal. May 29, 2007) (noting that one defendant’s estimateof space required to store daily Server Log Data was “significantlyoverstated.”).
121 DEGNAN.DOCX (DO NOT DELETE)2011]ELECTRONIC DISCOVERY4/4/2011 8:13 AM159how much information will be culled out. This section will serveas a starting point in understanding the costs of conducting ediscovery. As a result of this uncertainty, professionals andexperts take advantage of this ignorance when producinginflated bids and estimates for e-discovery.60 This next sectionbreaks down the variables of producing ESI (before attorneys’fees) and explains how those variables may be adjusted toconduct ESI discovery in the most proportional way possible forall parties involved.A. THE COSTS OF PRESERVING AND PRODUCINGELECTRONICALLY STORED INFORMATIONLitigation support is a lucrative industry.61 Before the daysof ESI, the client would rent and retrofit warehouses to storemass quantities of paper for litigation.62 Now, everything maybe stored on a mainframe, personal digital assistant (PDA), orother computer device.63 Vendors’ jobs, therefore, have changedto meet the need of this emerging niche.64 A recent studysuggested litigation support industry would be worth 4.5billion by 2009.65 This is not shocking, given the amount of60. See, e.g., id. (noting that the defendants’ cost projections were notbelievable); Oracle Corp. v. SAP AG, No. C-07-01658 PJH (EDL), 2008 U.S.Dist. LEXIS 88319, at *3–6 (N.D. Cal. 2008) (holding that an additional 5million for electronic discovery on top of an existing cost of 11.5 millionoutweighs the benefits that additional discovery may provide, according toproportionality).61. See generally Charles Skamser, The Cost of eDiscovery, t-of-ediscovery.html(describing the changes to electronic discovery and the confusion in itsapplication since the FRCP change in 2006, especially regarding the increasein commercial expenditures).62. Cf. Withers, supra note 20, at 181–82 (noting that in the past, themain costs were storing and copying documents, while today those costs arenon-factors as other considerations, such as inaccessibility and custodianship,have become the significant cost factors).63. Cf. Garrie & Armstrong, supra note 22, at 16 (“Although courts haveextrapolated traditional discovery principles from paper documents to digitalones, courts have also been challenged by production costs differences betweenpaper and digital documents.”).64. See generally Skamser, supra note 61 (describing several vendors whohave emerged to support demand for specialized electronic discovery services).65. See George Socha & Thomas Gelbmann, EDD Showcase: EDD Hits 2Billion, L. TECH. NEWS (Aug. 2007), http://sochaconsulting.com/2007 SochaGelbmann ED Survey Public Report.pdf (predicting growth in the electronicdiscovery market based on consumer and provider expectations).
121 DEGNAN.DOCX (DO NOT DELETE)160MINN. J. L. SCI. & TECH.4/4/2011 8:13 AM[Vol. 12:1information that must be screened and reviewed before trial.66This section discusses the variables of ESI discovery andexplains how those variables may impact e-discovery costcalculations. For purposes of this article, the costs of ediscovery will be based on 100 gigabytes of information unlesssuggested otherwise. Speaking in terms of paper documents,100 gigabytes is the equivalent to 100 truckloads ofdocuments.67 And when that much information is in play, theclient should expect to pay for culling, organizing, andreviewing of the data, unless it has the capabilities and theknow-how to conduct such services in-house.68Aside from ESI and trial counsel’s fees, there are severalother outsourced processing costs to consider (see Table 1).Table 1 is particularly helpful because it shows where themoney is spent in a hypothetical litigation scenario. Manualcollection costs 250 to 500 per hour, depending on thecomplexity.69 But with 94 percent of the ESI costs spent onprocessing and review, the processing and review costs receivemost—if not all—the attention in literature and practice.70Bringing various elements of discovery in-house may save someof these costs, but the client must also factor in the time andopportunity cost when employees are performing e-discoveryinstead of their normal job duties.7166. Cf. Craig Ball, Worst Case Scenario, L. TECH. NEWS (Oct. 1, ArticleLTNC.jsp?id 1202435547745 (describing how delegating electronic discovery to vendors and outsideexperts can blur the line between lawyer and service provider and can be bothsensible due to the amount of information that must be reviewed and riskybecause it wrests control away from the lawyer and can adversely affect theclient and the case).67. Cf. E-DISCOVERY TEAM, www.e-discoveryteam.com (last visited July 5,2010) (describing in a sidebar on the site’s landing page that 1 gigabyte of datais equivalent to about 75,000 pages of documents, which would fill a pickuptruck).68. See generally Jason Krause, Don’t Try This at Home: Doing EDiscovery is Best Left to Outside Experts, ABA J., Mar. 2005, at 59, 59–60(describing one law firm that does in-house electronic discovery tasks, notingthat it is a rarity and that for more complicated cases, the firm relies onoutside consultants).69. See Skamser, supra note 61.70. See, e.g., Predictive Pricing Estimator, ORANGE LEGAL TECH.,http://orangelt.us/estimator/pricing1.html (last visited Mar. 11, 2010)(providing a cost estimator for electronic discovery services focusing on thecost to process and review the data).71. Withers, supra note 20, at 182 (“Organizations without state-of-the-
121 DEGNAN.DOCX (DO NOT DELETE)2011]4/4/2011 8:13 AMELECTRONIC DISCOVERY161Table 1: Expenses from E-Discovery for 25 Gigabytes(GB) of Information72EDRM l for Processingand ReviewHard Dollar Costs . WHERE IS THE MONEY GOING?Client, counsel, and the court must understand the costs ofe-discovery to make informed decisions about litigation supportvendors and the scope of litigation. There are also several typesof litigation support vendors to consider. Specifically, somevendors are helpful in front-end analysis and review; others arehelpful copying, scanning, warehousing, or managingdocuments online in a document repository; and still others arehelpful at cumulating and packaging all this information in amanner that will ensure the proper presentation of documentsfor deposition, witnesses, and trial.73 By calculating thetangible cost of outsourcing segments of the review andaccounting for the intangible costs of company employees’ time,in-house counsel may evaluate the real costs associated with atypical review and make the appropriate staffing decisions.Using the industry averages outlined by others as baselinesand reasonable ranges to articulate highs and lows, this articleextrapolates those numbers to provide costs analysis for 100gigabytes of data. Therefore, the following sections outline thevariables that are used to calculate costs of document reviewersart electronic information management programs in place, which classifyinformation and routinely cull outdated or duplicative, data face enormous(often self-inflicted) costs and burdens.”).72. Will Uppington, E-Discovery 911: Reducing Enterprise ElectronicDiscovery Costs in a Recession, E-DISCOVERY 2.0, (Feb. 20, 2009, 4:40 lectronic-discovery-costs-in-a-recession/.73. While acknowledging that such companies exist, it is beyond the scopeof this article to recommend any such vendor or service. The author willmerely note that he has used several of these companies with success.
121 DEGNAN.DOCX (DO NOT DELETE)1624/4/2011 8:13 AMMINN. J. L. SCI. & TECH.[Vol. 12:1and litigation support vendors.1. Litigation Support Vendor ServicesLitigation support vendors help with data deduplication,culling, processing, and analyzing the information before thecontract document reviewers see the documents.Table 2: Expected Vendor Fees for 100 Gigabytes(GB) of Information74PriceGB100TotalTotalperGB GB (high) 750 1000 1200 1800 75,000.00 100,000.00 120,000.00 180,000.00perGBThe process of outsourcing to litigation support vendors toload and cull data in its proprietary software program rangesin cost from 350 to 500 per gigabyte.75 The end cost of cullingis typically 750 to 1800 per gigabyte for the vendor services,considering all the extra fees for hosting, software licensing,advanced culling, consulting services, and technical support.76Industry average is approximately 1000 per gigabyte forhosting and processing.7774. There is information to support the in
Accounting for the Cost s of Electronic Discovery David Degnan* I. INTRODUCTION Experts estimate that conducting an electronic discovery (e-discovery) event may cost upwards of 30,000 per gigabyte.1 Given the complexity of the subject and the amount of money involved, many lawyers, litigation support vendors, experts,
