Many companies have endured expensive eDiscovery exercises when responding to litigation or regulatory cases or when conducting in-house compliance or forensic investigations. The volume of data (scanned paper documents or electronically stored information) they need to collect, process, and review is the main cost driver in eDiscovery. And the amount of data involved increases every year.
eDiscovery solutions can be tailored to cost-effectively meet the needs of any organization. Having the right strategy, expertise, and technology in place will reduce your company’s eDiscovery costs.
There is no one-size-fits-all solution when building cost-efficient eDiscovery for your organization. You will need to consider the size of your company, the number of cases you expect to handle, the technology used, and many other factors.
eDiscovery infrastructure strategies
Broadly speaking, one may take three different approaches. Some companies decide to outsource all their eDiscovery cases to a law firm or service provider. Some build an on-premise eDiscovery infrastructure and team to handle most of the eDiscovery cases in-house. Others conduct eDiscovery in-house but use externally hosted or cloud infrastructure.
Here is an overview of these eDiscovery infrastructure strategies and their corresponding cost drivers.
Some companies outsource the entire eDiscovery process to external eDiscovery service providers. Many small and midsized companies outsource because they consider it too expensive to build their own eDiscovery infrastructure and capabilities.
Even larger companies that have their own eDiscovery infrastructure and team may outsource some eDiscovery cases for legal reasons.
The cost of outsourcing an eDiscovery case depends on the pricing model of the service provider. Most will charge for working hours plus the volume of data to be collected, processed, hosted, reviewed, and produced. Hosting fees, in particular, accrue over the whole duration of the eDiscovery case.
Conclusion: Such a strategy may typically be adopted for legal reasons and risk considerations. However, it often leads to a relatively tight technical lock-in, as well as long-term legal-side vendor lock-in. If, for example, custodian data is generally encrypted but decryption keys need to leave the house in order to permit external service providers to kick off an eDiscovery, the general risk-lowering argument may quickly vanish. Typically, collected raw data is also never returned – because the external service provider also aims at proper risk management along its services. This quickly raises intellectual property risks and data privacy concerns as well. The company effectively loses control over its own data.
In-house eDiscovery provides the option to select the review partners per case in an environment controlled by the corporation. Separating hosting services and review services is key for an effective legal spend management. Owning the data hosting environment is key for data sovereignty. A corporation has the choice of investing in an on-premise service with related IT costs, as SaaS or as a hybrid architecture. This concerns especially larger companies with heavy litigation workloads that involve large volumes of data. Many of these companies see bringing eDiscovery in house as a way to reduce eDiscovery and consulting costs in the long term.
Implementing on-premise eDiscovery, however, must be carefully planned. The in-house or outsourced IT team will need to build server and storage infrastructure and maintain this environment – 24 hours a day, if necessary – as well as security, disaster recovery planning, etc.
The cost of building an eDiscovery environment depends on the data volume, availability, and security requirements of the infrastructure and the number of IT personnel taking care of the infrastructure. Also, certain kinds of software-related trainings may be required for them in order to carry out these tasks. You will also need to pay license fees and software maintenance costs to the eDiscovery software vendor.
Conclusion: This kind of strategic decision will result in strong vendor-independence, however there is a strong overall trend towards cost-saving in IT areas, especially for such kinds of services, and of course eDiscovery is no exception.
eDiscovery in the cloud
Building your own eDiscovery infrastructure requires dedicated hardware and an IT team to maintain it. In the era of shared platforms and cloud computing, it is debatable if maintaining on-premise infrastructure is still cost-efficient. For example, many companies have given up their internal email servers and migrated their mail to a cloud service such as Microsoft 365.
eDiscovery can also benefit from the advantages of rapidly evolving cloud technology. Many eDiscovery vendors offer their software on cloud platforms such as Amazon Web Services and Microsoft Azure. This allows flexibility and scalability of the solution, for example they can temporarily increase storage space to handle a large case and reduce it again when they do not need it, to save costs.
One disadvantage of a cloud model is that all the data is hosted in the cloud. Given that the filtering and culling processes at the start of an eDiscovery workflow can often reduce data volumes by half or more, you may end up paying for a lot of storage space.
However, adopting a hybrid solution – a mix of on-premise and cloud eDiscovery software – gets around the problem of hosting large volumes of data before culling and helps to securely integrate the cloud solution into a company’s IT ecosystem.
Conclusion: An SaaS-based approach helps to keep initial costs low, if only frequent or small numbers of cases arise. External service providers may easily be permitted to carry out their review on the SaaS platform regardless. If data volume increases, a very cost-efficient hybrid approach may be applied in order to keep hosting fees low. Raw data and data not under active review – also archived data from previous cases – may be hosted internally or in the cloud at much lower rates and can be migrated as needed. As there is no vendor lock-in this can be freely decided and reverted as needed.
Hybrid solutions for handling eDiscovery in-house
Investing in the right technology is only half the job. It is also extremely important to integrate any such technology into your IT ecosystem. Combining both factors will give you a cost-efficient and very effective environment for managing your eDiscovery process.
An end-to-end hybrid solution integrates a company’s eDiscovery cloud platform with its on-premise IT infrastructure using a relatively small and secure eDiscovery lab that connects over dedicated interfaces (APIs), acting as sort of a secure tunnel.
This kind of lab has different, and multiple, functions:
- It connects the on-premises and cloud-hosted data repositories to relevant data sources for each litigation case.
- Data collection software running in the lab can collect data from the relevant data repositories remotely using dedicated interfaces within the intranet (e.g. via Office 365 API or to SharePoint) or directly from file shares.
- The resulting large volumes of collected data are hosted in the eDiscovery lab, using relatively low-cost storage, to keep a snapshot of the data before preprocessing.
- The lab pre-processes the data and eliminates irrelevant items using deduplication, culling and date or keyword filtering (if not already search-termbased filtering).
In this way, your company can keep a large amount of data in a lower-cost environment before transferring a small amount of more relevant data into the cloud environment for review. Following this strategy, your company can reduce the data to be hosted in the cloud by up to 70%, which yields massive cost savings.
A small eDiscovery lab does not require a big IT investment.
Keeping pace with new technology
Investing in new technologies helps you achieve cost efficiency. It pays to regularly reevaluate your solutions because technology evolves very quickly. It is impossible to conceive of the solutions will undoubtedly emerge in the coming years. By staying flexible and keeping tabs on new developments, you can often find new ways to benefit.