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How to Manage Your Total Cost of Review: Every Percent Matters

Published on April 27, 2021

Zef Deda

Zef Deda is a business development manager at Acorn Legal Solutions. An e-discovery thought leader working with Am Law 100 firms and corporate legal departments, Zef plays a key role in leveraging his knowledge of advanced technology and phased project plans in helping clients solve complex issues. Zef positions himself as a collaborative thought partner to ensure the best outcomes through his understanding of his client’s problems, their end goals, and working closely with them to identify and ensure the best possible outcomes.

As I discussed in my previous article, budget concerns were a prominent concern in 2020 and continue to be so through this year. With review being the greatest cost driver, any opportunity we have to reduce the scope, and in turn costs, of it should be seized. In order to do that, we first need to realize where these opportunities exist throughout the process.

The working question we will continue to use to guide this exercise is: How do our choices prior to review affect our total cost?

Establishing the Numbers

Let’s recap the assumptions we will continue to work off of. In this scenario, we have 6 devices with costs of $500 per device and each device has 50 gigabytes of data. Assume each gigabyte contains 1,000 documents, and our reviewers work at a rate of 50 documents per hour at $50 an hour. Lastly, our processing rate will be $35 per gigabyte, and hosting will be $25 per gigabyte per month. We will also be using 4-month longevity for this case.

In my previous article, How to Manage Your Total Cost of Review: Keeping Collections on Target, we also took this scenario and presented the choice of collecting broadly or collecting narrowly. We found that through targeting our collection we were able to not only reduce monthly recurring fees but significantly reduce our total costs of review by up to $25,000.

Now that we are caught up, let’s move on from the collection stage. So, the second question: For the custodians you collected, would you spend $5,000 upfront to increase the cull rate from 80% to 85%?

Upfront Investment to Increase Cull Rate 5%?

$5,000 may seem like a lot when the total cost throughout the matter is about $50,000. One could look at this as, since we already have such a high cull rate at 80%, why would I spend 10% of the budget for what seems like a minuscule increase of 5%.

Well, let’s look at what the numbers say. You’re collecting and processing the same amount of data, so those costs will remain unchanged. However, in month three is where we will start to notice the costs shift, where we make this extra investment in an early case assessment (ECA) or early data assessment (EDA) to increase our cull rate.

In the graph below you’ll notice the hosting sizes might appear similar but I assure you, they’re actually different and we’ve reduced our monthly hosting costs by $400. But let’s be honest, it’s nothing notable and we also had to spend $5,000 for those results. If we stopped right here, it would take us about a year to break even. At this point, you’re probably feeling pretty good if you chose to not to go with the ECA or EDA.



Looking at the Big Picture

But eDiscovery doesn’t stop there. When we start thinking about this not in terms of hosting sizes but in terms of the number of documents that will be reviewed, the real costs savings start to show. And so even though you’ve spent that additional $5,000 in month three, we’ve actually saved $11,000 over the life of the matter.

These savings are coming from two things. First, as we mentioned your hosting costs have been reduced, not significantly, but it does compound over the life of the case. And second, our biggest expense by far is the number of documents that are being reviewed. And so, if $5,000 saves us at least 5000 documents from being reviewed, then that $5,000 has paid for itself. If that $5,000 saves you more than 5,000 documents from being reviewed, then we were able to come out ahead and reduce our total costs.

How You Can Apply This

Utilizing an ECA can be an ambiguous concept, which varying approaches to it. There are a variety of tools out there that can assist with the process as well, all of which can be found in RelativityOne. An example of a basic workflow we could use to improve our culling rate is to take 1 to 2 key custodians and put them into an ECA database. From here we can run communication visualization and produce a search term report. Then we can put together a brief timeline utilizing case dynamics as well. Through using a combination of these applications, we are able to confidentially limit the date range and pinpoint the key area of our matter.

Now, this is just a simple example of a workflow and the tools you could utilize. These tools can be accessible but to really extract the full value of them and produce the best possible outcomes, finding a partner with the expertise to apply the tools on a granular level is essential.

It’s Always Worth Taking a Look

This scenario is one that we encounter quite often but is usually an even smaller percentage increase in the cull rate, something like 80% to 80.5%. Even at a difference that small, depending on how much data you’re working within your matter, that 0.5% can pay for itself very quickly.

But I do have to acknowledge, these scenarios are not a one size fits all. There are plenty of times when these additional upfront costs are not justifiable. If you expect to settle before review or if you’re working with a very small set of data. There’s little incentive to invest when you don’t expect to realize the returns of this investment. However, in most scenarios, this investment will produce significant total cost savings throughout the life of the case and in all scenarios, it is beneficial to at least evaluate this investment at the onset of the matter.

Stay tuned for next month as I continue this exercise and examine how we can leverage advanced technologies to further streamline our review and further reduce our total costs.

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About Acorn 

Acorn is a legal data consulting firm that specializes in AI and Advanced Analytics for litigation applications, while providing rigorous customer service to the eDiscovery industry. Acorn primarily works with large regional, midsize national and boutique litigation firms. Acorn provides a high-touch, customized litigation support services with a heavy emphasis on seamless communications. For more information, please visit www.acornls.com.