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The Three-Legged E-Discovery Model

Inhouse counsel typically provide for their e-discovery needs by having a partnership with a hosting vendor who provides processing and hosting for major cases and who generally bills based on the volume of gigabytes or number of files processed. However, the best way to manage costs is to add a third role – a consultant who can suggest alternative technologies and processes to limit overall costs.

The tripartite model recognizes the inherent conflict of hosting vendors who want to maximize their revenue by maximizing the volume of data they process and host. Their revenues are their corporate clients’ costs – they’re literally two sides to the same coins. When bonuses and commissions for hosting vendor personnel are based on the volume hosted, the natural inclination is to recommend a “collect-everything-and-sort-it-out-in-the-review-platform” approach. 

The bias towards maximizing the volume of data held by the review platform extends beyond just how much data is put into the system and can impact how that data is stored as well. For example, electronic documents like Word, PowerPoint, and Excel can have embedded graphics. Those embedded graphics can be extracted and stored as separate files despite the fact that in many cases they just clutter the review database and needlessly inflate the storage space being billed by the hosting vendor.

Hosting vendors understandably focus their attention on ways to use their existing system and may not take the time to learn of new technologies or new pricing models that could result in lower costs to clients but lower revenue for them. Vendors have finite resources to devote to market research especially if they’ve already made multi-year commitments to pay hefty licensing fees for their current offerings. Furthermore, some software licenses restrict the ability of vendors to share benchmarking data comparing the effectiveness of the primary technology with that obtained from other sources. 


Case Sensitive Searching. We recently conducted a post-action audit of e-discovery for a client and found that the initial selection of files to be reviewed in the final hosting platform involved a key term that was an acronym that appeared in all caps, e.g., ACT. The hosting vendor dutifully collected such files without either knowing or disclosing that the key term search could have specified case sensitivity which would have omitted gathering many files where the lower-case version of the word (“act”) or mixed-case version of the word (“Act”) that were never responsive.

Analytics/Predictive Coding. Hosting vendors often tout the efficiency of their analytics and predictive coding technology in eliminating clutter. And they’re right, analytics and predictive coding/Technology Assisted Review is very effective. However, that type of technology can be licensed on terms other than paying per gigabyte fees. Concept clustering, social network analysis, and other tools can be used iteratively to cull the non-relevant “noise” documents before the data goes to hosting vendors and without paying volume-based fees.

Having a knowledgeable consultant who is not compensated based on primarily volume processed or hosted can result in the selection of more cost-effective e-discovery solutions.