In E-Discovery, It's Not About The Hourly Rate

The billable hour has received a lot of attention in recent months as it relates to associate salaries and the value the client receives, among other issues. But it has been especially relevant in the e-discovery field in recent years, as more in-house departments have realized that much of their discovery work can be done for under $65 an hour versus the $200-400 they were accustomed to paying.

So now that this is the norm in our profession – paying $45-65 an hour for e-discovery work – the real question becomes, ‘What am I really getting for that money?’

Once you’ve driven down costs to the $45-65 per hour level for e-discovery, I would argue that the hourly rate makes little, if no difference, on your bottom line. The most important factor is the review rate of the attorneys. In fact, it’s really very simple math.

Let’s take a medium-sized matter: 30 gigabytes of data, or 400,000 e-mails.

Using a traditional (linear) review tool, an average review rate would be approximately 50 document decisions per hour for an attorney. By increasing the attorney review rate by 20 decisions per hour, the cost savings over the life of the project would amount to $125,000 and cut the project’s time by 25-40%. That more than compensates for a $20 per hour difference in an attorney's hourly rate, too.

That’s also a very conservative answer, because many companies now utilize a content analytic review tool that clusters documents together by topic versus a linear tool that only organizes data chronologically. Using the content analytic tool is likely to produce a 300-500% increase in the review rates, which saves in excess of $300,000 and 70% in time on that same 30GB of data. Content analytic tools cost more, but you can see where that difference can be accounted for.

So if you can accept this concept, it truly becomes a question of what you’re getting for your money. Many in-house departments have $48 an hour attorneys handle their e-discovery work, but ultimately the work is re-reviewed by outside counsel, there’s no fluid process in place and the client has no idea what kind of productivity the attorneys are generating. How would they know if they could be doing it better?

The question really becomes about how to increase review rates and thus productivity. There are many ways to do this, but it starts with experienced attorneys who know e-discovery and the technology. It’s supported by proven processes and talented project managers. Everything must be transparent: work closely tracked, benchmarked and learned from. It’s a collaborative, highly communicative process with outside counsel. And it can be repeated from matter to matter, creating more opportunities for learning and efficiency.

Focusing on the process and maximizing productivity -- not the hourly rate -- is where money is truly saved in e-discovery. The math really will speak for itself; all a client has to do is ask for it.
 

LegalTech NY: Review Less Data - and Do It Faster

Themes from 2008 and before: Review data faster
Theme for 2009: Review less data

After a jam-packed three days of meetings, panel discussions, and visiting with software vendors from across the country at LegalTech New York, it wasn't difficult to discern the two primary objectives for cost savings in the e-discovery realm: (1) Review the data faster and (2) Review less data. These topics aren't new, of course, but in particular the level of discussion about reviewing less data has clearly reached a new level. 

Reviewing Data Faster

For the past few years, the latest technology trends were utilizing content analytic tools when reviewing data. Leaders in this area include Attenex, Stratify, Metalincs, and Cataphora. In our experience, content analytical tools have proven to be three to five times faster than traditional linear tools. The result: hundreds or thousands of attorney hours saved and thousands or millions of dollars saved in performing the review of electronic data.

The benefits of content analytical tools is now well accepted, so much so that traditional linear software tools have upgraded their platforms to include content analytical capabalities. Indeed, over the past year Content Analyst Company has announced strategic alliances with KCura's Relativity, Onsite's eView, and most recently iCONECTnXT.

Why is this so important, other than the obvious benefits of getting the review done faster? Because it makes the hourly rate of the attorneys less relevant. For a company deciding to conduct a review with an LPO and its low hourly rate, it doesn't necessarily mean it's going to be less expensive if an onshore company's attorneys can produce review rates that are two or three times faster, even if the hourly rate is double. So when considering this type of work, it's always good to ask the e-discovery company about the review rates their attorneys typically achieve -- it makes it easier to compare apples to apples. 

Reviewing Less Data

In addition to software platforms adding content analytical capacity to their arsenal, the major players are also focusing on the next-largest cost associated with e-discovery: the amount of data collected for review. In the majority of our visits with software review vendors, the common theme was that either their tool now had early case assessment features or they were in the process of adding to their platform. To that end, we had a chance to visit with representatives of Clearwell, Metalincs, Planet Data, and Inference, just to name a few.

In utilizing the technology for our corporate clients, we have seen the benefits first-hand. We have found that by processing through an Early Case Assessment tool that one or two attorneys can quickly and dramatically cull down the data to be reviewed (see our previous posts). In an instant, you can eliminate all e-mails that do not fall within the relevant time periods by performing advanced date searches and filtering those results.

The next step is to identify all sender and recipient domains related to the particular custodian’s files that you are reviewing. With this feature, the attorney reviewer can eliminate thousands of e-mails that clearly have no relevance to a particular matter based upon the sender or recipient information. For example, all e-mails sent from eBay, Travelocity, newspapers and other subscription-type services provide fertile ground to eliminate thousands of irrelevant e-mails across all custodians collected. The ability to search across all data, based upon domain names, also provides opportunity to quickly and comprehensively identify all communications to and from legal counsel. With one click of the button, a single reviewer can segregate as “potentially privileged” all of the documents originating from or involving legal counsel into a separate workflow for a second-level determination of privilege. In addition, by typing in the law firm name you can quickly and comprehensively identify all attorneys associated with that law firm and all e-mail accounts associated with that attorney that have been collected. This feature adds an extra layer of confidence that you are capturing all attorneys involved in a particular matter.

By spending a small amount of time on the front end with these early case assessment tools, it is very achievable to reduce the amount of data that requires review by an additional 25-50% over the initial 20-30% filtered through traditional automated culling processes (de-duplication, file-type suppression). The net result – huge savings with a potential total reduction of 50-80% of files that require review.

One of the most popular drivers of visitors to this blog are searches for 'early case assessment tools,' which on a much smaller scale illustrates how much this issue is in the collective consciousness of the profession. And why wouldn't it be? If there's less data to review -- and we can review it faster -- it's going to make achieving significant cost savings a lot more realistic.