Why bargain-priced e-discovery is a false economy

September 2017 | EXPERT BRIEFING | LITIGATION & DISPUTE RESOLUTION

financierworldwide.com

Every organisation is looking for ways to be more efficient and to save costs, so it is no surprise that many are interested in finding an electronic discovery partner which is offering a low price for electronic discovery services. What those offering lower prices for e-discovery often fail to convey, however, is the final and true cost of a project. Unforeseen coverage gaps, less than robust security practices, ignorance of global requirements and delayed deliverables can all add up to a sum that is much higher than that promised at the outset.

So what are the main risks that organisations run when they sacrifice quality for cost-savings?

Lack of scale, lack of expertise

Small-scale or basement-rate e-discovery providers are often unprepared for the types of complications that regularly arise in litigation, forcing clients to hire additional providers at extra cost.

Smaller providers that end up missing the mark on estimating the true cost of a project often do so because halfway through the project they realise that they must pay for the outside expertise that they lack internally.

Many firms are starting to realise that they can consolidate by engaging one managed services provider for various needs, solving the multiple-vendor problem. Rather than juggling standard transactional relationships, organisations are often looking to larger vendors to meet all of their needs, from consulting providers, to software providers, to document review providers. The continuity of working with one partner to meet each of these needs streamlines operations, increases efficiency and, in the long run, reduces costs.

Data security

Another key consideration is whether the e-discovery provider has the resources necessary to ensure proper data security. It is ultimately a question of infrastructure, rather than of expense: a provider cannot believably claim to offer both state-of-the-art data safeguards and bottom-of-the market pricing at the same time. When a vendor boasts of a low per-gigabyte quote, it is revealing that it probably lacks the size and buying power to afford the necessary protections for the data with which it is asking to be entrusted. For a corporate client, a breach of any data related to its legal disputes could cost it far more than any e-discovery vendor would charge.

Therein lies a double standard in how security is valued. Most companies would never consider having a start-up host their email, yet e-discovery hosting is ultimately the same thing, with a potentially higher risk profile. The data involved is not random, it is extremely valuable data that should be highly protected.

The ‘just say yes’ mentality

These data security issues were far less of a concern in the days when document review required little technology beyond a printer at the neighbourhood copy shop. In that era, it was easy for vendors to meet clients’ needs at low cost, with little risk. As a result, the mindset of ‘just say yes’ was established regarding clients’ requests, as even modest vendors could handle clients’ needs without much technological savvy or equipment.

This ‘just say yes’ mentality is one of the biggest reasons for e-discovery price compression. The downstream change is that vendors and organisations alike underestimate security, compliance and regulatory obligations. Along with this underestimation comes a great deal of hidden risk.

Global reach

Vendors with a ‘cost first’ mentality also underestimate the realities of globalisation and its impact on the e-discovery industry. As the borders for business continue to expand, discovery efforts are more likely to require knowledge of multiple legal systems. For example, when a European company manufactures its products in Asia and sells them in the US, a lawsuit can easily involve documents from three continents. These documents are often in a variety of languages, and are subject to a different set of regulations in each country. Often, cases appear to be based locally can end up needing data sourced from places like Hong Kong or Tokyo.

When this discovery need arises, clients partnered with global e-discovery providers with multi-lingual staff and deep local jurisdictional knowledge will be able to move forward much more seamlessly.

Contingency planning

Perhaps the most common cause behind the hidden costs of low-budget e-discovery is also the simplest: poor planning. Unexpected setbacks can happen in the course of any project, but small, cost focused vendors may not have the resources in place to adjust and recover, leading to extended timelines and expensive final projects. Small providers often need to prioritise certain projects, meaning others will fall off-course.

A good rule of thumb is to look for a provider that can manage unexpected project surges and extraordinary requests. This ability, along with cross-border coverage, security safeguards, managed services and other benefits often comes with a large, global and diversified provider. When under priced projects ultimately fall through, they can wreak havoc on the client and the project. Those considering bargain priced options should be mindful of these risks as they assess their partnerships in the e-discovery space.

Lianne Goddard is director of sales, Europe at Epiq.

Lianne Goddard

Epiq