Tom O’Conner is an attorney, educator, and well respected electronic evidence expert He's dedicated his career to teaching the bench and bar about eDiscovery technologies and trial tactics. After decades of practicing law, Tom limits his focus to service as a consultant in computer forensics and e-discovery as well as a court-appointed expert on ESI. A prolific contributor to educational programs worldwide--having delivered thousands of presentations and papers—Tom’s articles on electronic discovery frequently appear in the national media. Tom has also written three book on legal technology and worked as a consultant or expert on computer forensics and electronic discovery in some of the most challenging, front page cases in the U.S. http://gulfltc.org/
I’ve written many times about how eDiscovery software is traditionally viewed as only a large case, federal forum issue. Most recently in the 2018 eDiscovery Buyers Guide (Copyright 2018 Burney Consultants & Lex Tech Review) I noted that firms of all sizes must now understand how to handle electronic discovery cost-effectively and successfully. To that end, I discussed the roots of what is now often called “The Small Case Dilemma.”
To begin with, 49 of the 50 states now have their own eDiscovery rule. ( https://www.ediscoverylaw.com/state-district-court-rules/ ) Coast to coast from California to Florida, and from states as populous as New Jersey to mostly rural states such as Louisiana and Alabama, eDiscovery is now a local issue with only South Dakota as the lone holdout. The result of all that state activity is a dramatic increase in e-discovery activity for small local cases.
Second, the states are also pushing technical competence as an ethical requirement. From the famous State Bar of California's "9 Things Every Attorney Needs to Know About E-Discovery" to the Florida CLE requirement for technical training, basic competence in technical issues is now the rule in 31 states.
Third, we have seen an enormous rise in ESI in criminal cases. Given the increase in digital activity by people in all areas of their lives (88% of the US population uses the Internet every day and 91% of the adults use social media regularly) and given that more than 90 percent of all documents created today are generated in electronic format, this is hardly surprising. (CF, Social Media Evidence in Criminal Proceedings: An Uncertain Frontier, (https://www.crowell.com/files/Social-Media-Evidence-in-Criminal-Proceedings-An-Uncertain-Frontier.pdf )
In 2012, the Department of Justice/Administrative Office Joint Working Group on Electronic Technology (JETWG) developed a recommended ESI protocol for use in federal criminal cases called Recommendations for Electronically Stored Information Discovery Production in Federal Criminal Cases.
Since then, attention to ESI has continued to grow and eventually bleed down to state and local criminal cases.
(https://ediscovery.co/ediscoverydaily/electronic-discovery/understanding-ediscovery-criminal-cases-ediscovery-best-practices/ .) Matters as well known as the Amazon Echo case in Arkansas (where voice instructions logged in an Echo were sought by prosecutors to contradict an asserted alibi: the case was eventually dropped for lack of evidence) or the 2017 arrest in Connecticut of a man whose alibi for his wife’s death was contradicted by ESI from a Fitbit, cell phones, and the electronic log of a home alarm system.
eDna and Ernie: From 25GB to 1000GB
My involvement with this small case issue began in 2010 when noted e-discovery consultant Craig Ball wrote a column for Law Technology News called "E-Discovery for Everybody." This article came to be better known as the "EDna Challenge" ( http://www.craigball.com/E-Discovery%20for%20Everybody.pdf )because in it, Craig proposed a scenario with a solo practitioner named Edna who had an eDiscovery budget of $1,000 and asked how she could possibly perform any e-discovery on that amount.
The problem as Craig defined it was simple:
"The vast majority of cases filed, developed and tried in the United States are not multi-million-dollar dust ups between big companies. The evidence in modest cases is digital, too. Solo and small firm counsel like Edna need affordable, user-friendly tools designed for desktop eDiscovery - tools that preserve metadata, offer efficient workflow and ably handle the common file formats that account for nearly all of the ESI seen in day-to-day litigation. “The response to the column was overwhelming with dozens of consultants, attorneys and vendors (myself included) proposing solutions. A large number of people and companies responded, notably Digital WarRoom with an $895 desktop software package designed specifically for Edna. By the next year, the ABA TECHSHOW asked Atty. Bruce Olson (a former TECHSHOW Chair) and I to speak on the subject. We both thought that by then the challenge would have been met by the high number of eDiscovery vendors like Digital WarRoom and resultant stream of conferences, seminars and online training venues, but in fact the room for our presentation was packed with Mr. Ball himself sitting in the front row. It was then that Bruce and I realized the problem had not only persisted but had grown larger.
In response we decided to write a book about the issue called eDiscovery for Small Cases, it was released by the ABA in 2012. To drive further data for the book, I drew up the "Ernie Challenge," with advice from Craig Ball and my dear friend, now deceased, DLA Piper senior counsel Browning Marean. Named for another good friend Ernie Svenson, then a solo attorney with a general practice in New Orleans, this challenge covered those "tweener" cases that fall in the range covered by the Edna Challenge and mega cases suitable for the larger brand name products that dominate the EDD world.
The Ernie Challenge posited a case with roughly 1 terabyte of data to collect and a final amount of 200 gigabytes of data to review, the majority of that data being email with the balance being various types of financial data. It asked for some form of web review tool to work with the clients' counsel and contract staff in a separate location.
By the time the book was released, Bruce and I referred to this situation as the "Small Case Dilemma." Because while it is not automatically true that small cases require different tools for managing eDiscovery, the fact is that small cases often mean small technology budgets. Unless your practice is sufficiently mixed with big budget cases, so you already have a full complement of litigation support tools to use, you probably don’t have the tools necessary to handle anything but the smallest e-discovery matter. And the small budget means you can’t engage an outside consultant or vendor.
But the "new" e-discovery rules at both the federal and state level don't apply to just large cases. They force civil litigants into a compliance mode with respect to the retention and management of electronically stored information or ESI. The risks that litigants face because of improper management of ESI can include findings of spoliation of evidence, summary judgment findings and sanctions, including adverse inferences, adverse jury instructions and even complaints filed with state bar associations.
Problem 1: eDiscovery Technology isn’t Designed for Small Data Sets
The first problem we face with this new focus on smaller cases is that most current technology for eDiscovery was developed initially for large cases with large data sets. Companies with revenue streams based on processing or hosting terabytes of data cannot easily adapt to projects consisting of 100GBs or less, much as you cannot expect a jumbo jet to be used as an effective or cost-efficient means of transporting commuters during rush hour traffic.
Moreover, most products that have been designed to work with immense data collections cannot easily scale down to small sets of information. A SQL based product working with terabytes of data on a distributed internet framework needs a certain hardware and software infrastructure to operate. Because investment firm ROI requires high prices, most firms have NOT scaled down their offerings to load on a laptop or server.
The result is that these big products have big prices and both the products and the prices are beyond the scope of most small firms and small case budgets. And while those cases might be small to an international corporate service provider, they are far more meaningful to a person involved in a small business dispute or a divorce.
But if that case is valued at $100,000 or even $500,000 and, after analyzing the case and its budget you believe you cannot spend more than $50,000 to manage eDiscovery, then you have a problem.
Problem 2: eDiscovery Market Pricing
The first problem for small firms is current market pricing. Many, if not most, eDiscovery vendors have their roots in the per unit commodity pricing days of photocopying and imaging. The standard practice for years now has been to charge hundreds of dollars per GB each time data is handled.
In the early days of litigation support, you simply purchased a product such as Summation or Concordance for a flat fee plus annual maintenance and installed it on your computer. With rare exceptions such as Digital WarRoom Pro at $1795/year, this model no longer exists in the world of Internet and cloud subscriptions
Since the early 2000's, complicated service pricing has prevailed, and each step of the ED process needed to be handled separately by different products and clients had to pay separately for each of those steps. $X per GB for processing, $X per page for OCR, $X per document for near duplicate detection, $X per page for Bates numbers, $X per user and per GB to host and so on. And unit pricing for each of those steps were widely different, running from a penny per page for Bates numbering to $500 per GB for hosting.
Given an 800 GB hard drive (the size of the hard drive of one typical computer), a forensically sound collection of that data set might eventually yield 200 GB of reviewable material. Several years ago, a typical eDiscovery company would charge $200 per GB for the processing ($160,000) plus $50 per month per GB ($10,000) and $90 per month per user for the hosting. If the case lasted 18 months, this cost alone would have been just under $350,000.00.
And if we accept the commonly cited statistic that the review process will account for 60-70% of the total project price, then we're looking at a project cost that would eventually be close to $1,000,000.00 for only 200 GB of data.
Certainly it is true that those prices have continued to drop dramatically in the past two years to the point where large eDiscovery firms now charge $50-75/GB for processing and $25-50/GB/Month for hosting. Yet despite these price drops, large eDiscovery vendors have simply not been interested in 200GB cases. The simple fact is they can't support themselves on small jobs. Large companies have large overhead and need large revenue amounts to support that infrastructure. They may have spent millions of dollars developing software or, more commonly, acquiring another company with its already existing software. Private Equity and venture capital firms have noticed the growth in eDiscovery and jumped into the market with an eye only at expanding sales and “flipping” the company to make a profit.
When these factors are added to the typical large vendor mind set of unitized pricing noted above, they are locked into a system of fixed monthly costs and simply cannot, from their perspective, give away their services to small firms with small cases by lowering prices.
The Good News: We Now Have A Solution
The good news is that not only have costs dropped significantly but the calculation of costs, the unit pricing mind set, has finally changed.
Traditional eDiscovery processing prices have dropped from $500-600 per GB to $100 per GB or less while monthly fees have dropped from several hundred dollars per GB to $15-20 per GB and $30-40 per user.
More importantly, some companies are changing to a combined monthly fee incorporating both user and per GB charges. Logikcull, for example, has a simple hosted product with a flat fee of $40/GB/month which includes processing, productions and users. Digital WarRoom offers a similar, more robust, hosted solution for $10/GB/month which includes 1 user with a minimum of 25GBs or $250/month. Additional simultaneous users who log in the same month are $50/month.
For larger cases, DWR provides a flat fee for the first 500GB of $2000/month with an incremental fee of only $1/Gb over 500. And the DWR Private Cloud fee of $2000/month fee includes unlimited users and database size.
What makes DWR really stand out is their offering both a desktop version with this type of pricing. That product is $150/month or $1795/year with a highest all in per GB fee of $10/month, which drops as the matter or matters get bigger as well as free training. Given that prices of other service are commoditizing, many people are doing tasks such as processing, ECA filtering or productions themselves so that the actual bottom line cost price can actually drop below $10/GB.
One attorney with whom I spoke is a commercial litigator who speaks fluent ESI. He told me that he settled on DWR after using several major review platforms. His thought process on selection was as follows:
First, he had to look at “all in” costs. DWR’s per GB price was the best he found; however, DWR also offered project management in fifteen-minute maximum increments at no added cost, a big savings. He also told me that the company was extremely responsive when he had questions.
Second, he looked at features provided. This involved both end-to-end capability and review features. On the first, DWR handles everything from processing through review and production. While other more expensive processing software, such as Nuix, has more features, DWR does the job quickly and provides solid exception reports.
Regarding review, while other more expensive programs provide more feature-rich review options, that also often necessitates more extensive set-up costs and reviewer training. He told me that DWR has the features he needs: privilege tagging, tagging as responsive or not, issue coding, keyword searching, generating hit reports, and redacting.
Finally, because the law firm controls the platform, it can quickly modify issues and make other changes without relying on a third-person. He has used DWR on small projects involving only one PST and on large lawsuits approaching a million documents. User feedback and his experiences have all been positive.
These types of pricing structure, which bundle flat rate prices, whether it be as a "per drive," “per case” or even "per firm" rate, cover all the variables currently priced as separate line items. To me, this signals a real price war for eDiscovery and we are seeing other companies investigate a move away from the unit pricing model towards this type of flat fee or "all in" pricing.
This development in eDiscovery pricing stems from two factors:
1. Increased pricing competition among vendors and
2. Newer cheaper technology.
In the past year, many commentators have remarked that per-GB pricing cannot continue to maintain its stranglehold on the eDiscovery process. Indeed, in one E-Discovery Journal interview, Craig Ball said, "Some of the hosting services are putting together pricing where [they] are starting to sound rational and less frightening."
Regardless of the product you choose, there are several basic considerations for working with eDiscovery in small cases. They are:
1. Work with data in its native format. The types of files you will be dealing with are likely typical or standard files created by common programs used for email, word processing and other office functions.
2. Host the data yourself. There are many good Internet based hosted solutions that can fill your needs, but the typical storage fees charged for a case that exists for any length of time can bust a modest technology budget. So small cases work best with programs that can be installed on one computer for processing and review.
3. Keep the data sets manageable. This means getting agreements to dedupe and cull data down BEFORE you receive it, whenever possible.
4. Agree on exchange protocols. The single most effective way to keep eDiscovery costs low is to work with your opposition in a cooperative manner so you can stipulate to the use of low-cost solutions.
This last issue is paramount because the fact is that technology is not the key to successful management of e-discovery in small cases. Rather, in our estimation, it is the process. We all must change to the new paradigm of working in the digital world.
I’ve quoted many times the words of The Hon. Lee Rosenthal of the United States District Court for the Southern District of Texas and past Chair of the Judicial Conference Committee on Rules of Practice and Procedure, who once said, "Litigation habits and customs learned in the days of paper must be revisited and revised. The culture of bench and bar must adjust.”
It seems to me the type of low cost, multi feature pricing that DWR has brought to the table is exactly the type of adjustment we need.