eDiscovery Vendors Should Not Charge for Collecting and Preserving Data

Why?

Our clients, as parties to litigation, are often required to collect and preserve all potentially relevant data.  When this happens, they often believe that they have had to pay far more for these services than what was necessary under the circumstances, particularly in the earlier stages of litigation.  As our clients put it, “I’m going to get out of the case before I need to buy all these services,” or, “The other defendants are going to pull the laboring oar in this case so I don't need to buy all these services,” or "Doing things as late as possible (and not paying for anything now) is the right strategy for me, so I'm not going to buy anything now."

eDiscovery vendors have technology that allows them to identify, collect, preserve and store data at little or no cost. Instead of overcharging up front, what the vendors should be doing is giving clients a low or no cost solution, thereby levering far more lucrative processing, review and production work that will be required if the case does not go away, i.e., at that later point in time when clients can better appreciate the need for high quality and more expensive ESI services and are willing to pay accordingly.

The Left Side of the EDRM

eDiscovery services encompass searching for electronically stored information and searching within this information for specific people, places or things. The Electronic Discovery Reference Model (EDRM) breaks out these services as different phases along a chronological spectrum:

The left hand side of the EDRM encompasses early stage litigation activities of identification (locating and determining the scope and breadth of data), preservation (protecting against alteration and destruction), and collection (gathering data), as more fully explained at edrm.net, "EDRM stages."

Left Side EDRM Work Almost Always Needs to Be Done

Most if not all clients use litigation hold notices. While this is the right thing to do, the sad truth is that rarely will a court deciding a discovery dispute deem the litigation hold as having been sufficient to preserve relevant information where the opposing party can show that relevant information was destroyed or lost prior to collection. The courts have the benefit of and are happy to apply 20-20 hindsight (enhanced by carefully highlighted deposition testimony and documents supplied by the challenging party for the purposes of showing the “obvious” and “egregious” omissions in the client’s production).

Clients have businesses to counsel on operating matters, and, particularly early on, tend to be low-informed about, and low-motivated to find, all specific sources of information within the company that may be material to a specific litigation claim.  As the client might say:

You want us to find and save all data on suppliers of power trench MOSFETS before 2005, something we no longer use in our ICs, have no designated file or department that handles, and where the team leader no longer works for the company?  Really?  We don’t have that.

The litigation hold memos and otherwise sincere efforts to implement these holds nonetheless manifest the early stage litigation reality of a lesser informed and low motivated client.

Almost without exception, clients relying solely on preservation via litigation hold, if unable to get themselves out of the case before discovery begins in earnest, find themselves conducting untimely, inefficient, unduly expensive, piecemeal collections, laden with surprise developments, not the least of which is discovering the inadvertent deletion of information that the opposing party NOW says they can’t live without.

The practical insight is that all left side work (through collection and storage, but short of any processing or review) should be performed if the client is reasonably going to avoid the risks and expense of a subsequent determination of noncompliance with their preservation and collection obligations.

The problem is that left side services are so expensive that clients often will defer such things as collecting and preserving data, notwithstanding the high risk of noncompliance with common law discovery obligations. More after the jump.

Vendors Charge Lots of Money for Left Side Services

The problem is that vendor costs for even modest data collections of 30-50 gigabytes are in the tens of thousands of dollars, with average to larger data collections of over 100 gigabytes costing hundreds of thousands of dollars.

Clients Concerned They Will Not Get Their Money's Worth

Clients often feel that they have low exposure in a matter. Quite often they are right. Clients often feel that they can free ride on other defendants’ work product (think NPE patent litigations targeting hundreds of online resellers). Again, quite often they are right. The clients who feel this way, not surprisingly, choose not to collect, preserve and store potentially relevant documents. If they are right, the cost savings far outweigh the risk of playing catch-up later on or a court entering sanctions for noncompliance. Of course, in those situations where they are wrong . . .

Proposal: Vendors Should Do Left Side Work Free-of-Charge

The wins to the clients of not having to pay the vendor cost of collection and preservation are multiple: they don’t pay for something that they may not need; avoid the high cost and risks of non-compliance; create a much more robust and efficient platform from which to process, cull and review data if the case warrants; and better schedule and manage significant vendor discovery costs proportional to the client’s case exposure.

The related win to the court system is that the no-cost solution results in earlier and fuller collection, preservation and storage of data, avoiding prejudicial loss of relevant information and greatly reducing the time and energy the parties and the court spend on discovery compliance or spoliation disputes.

Of course this begs the question whether providing left side eDiscovery services free of charge also is a win for the vendor – as it must be or practically speaking will not occur.

That this is a win for the vendor is demonstrated by eDiscovery vendor Blackstone Discovery offering collection and preservation services free-of-charge exclusively to Confluence’s clients.

Why would Blackstone do this? Why should any eDiscovery vendor do this?

The most likely sources of data, and the greatest potential problem areas, are desktop computers, laptops, personal email accounts and webmail (like Gmail, Yahoo Mail), enterprise systems, cloud and social media sources (like Google Docs, Box.net, Skydrive). Data from these locations can be collected remotely (i.e., with no outside vendor having to come on-site) at relatively low cost of production to the vendor and little or no disruption of the client workforce. Blackstone uses the well-regarded DiscoveryBOT collection application supplied by biaprotect.com.

Blackstone is introduced to the client relationship much earlier in the litigation cycle, and by delighting the client with a creative and no-cost solution and also validating its eDiscovery skills, levers further engagement by the client (on the current case or on future cases) on far more lucrative right side EDRM services: processing, culling, review and production.  Once the client comes to realize that they are not getting out the case or they are a bigger target than previously thought, they much better appreciate the need for high quality and more expensive ESI services and they are  willing to pay Blackstone accordingly. 

As for what is in the fine print – the details will change depending upon the relationship between vendor, outside counsel and client – but the potential variance in these details does not make the solution any less attractive. Blackstone, for example, offers free hosting for up to six months, and hosting of a longer duration at 25% below market. If onsite assistance is required, Blackstone will provide these services at fees 25% below market. Once collected, Blackstone offers Confluence clients further processing, review services at fees 25% below market. And so on.

Providing left side EDRM services for free may sound like heresy to eDiscovery vendors.  Nonetheless, other vendors presumably would have the same motivation as Blackstone for offering such services. This is not just a win for clients and a win for courts and litigants, but also a win for vendors.
 

 

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