Results of Investigation into eDiscovery and Litigation Services Pricing

PricingTransparencyInitially prompted by an online article that appeared on the Forbes site titled, “Abtin Buergari’s Modus Disrupts “Corrupt” eDiscovery Business,”  where Abtin Buergari, CEO of  Modus, stated that Modus provides predictable fixed pricing to address the fact that the entire litigation services and technology business is not only terribly broken, but “corrupt” in the sense that the incentives around the eDiscovery service side of the legal business are at odds with client interests,  I have spent the last few weeks investigating eDiscovery litigation services pricing.    I have been running an open poll via an article that I published on December 20, 2012, titled, “Is there a Litigation Services Pricing Controversy?” and have talked to many of the thought leaders in the industry.   Following are the results of my study.

Results of the Poll on Opinions of Current Pricing

The first poll that we ran asked the question: What do you think of litigation services pricing?  Please note that respondents/voters were allowed to choose multiple answers.

  • Price quotes are confusing = 19.57%
  • Prices quotes are not transparent = 19.57%
  • I believe that my litigation service provider is trustworthy in regards to fair pricing = 16.3%
  • Pricing is about right for my market = 10.87%
  • We consistently get billed additional charges above the quoted price =  9.78%
  • I don’t believe that my litigation service provider is trustworthy in regards to fair pricing = 8%
  • Pricing is too high for my market = 7.61%

It is clear from these results that respondents believe that price quotes are confusing and not transparent.  However, it is also clear that respondents believe that their litigation service provider is trustworthy in regards to fair pricing and that pricing is about right for their market.

Comments from Industry Thought Leaders

“Pricing should always be a detailed and transparent discussion between the client(s) and service provider, with cost estimates based on a pragmatic view of the facts at hand.  Unfortunately, our industry has trended towards overly optimistic – and downright  confusing – pricing models and cost estimates that have left law firms and corporations bewildered while choosing service providers and angry when finding surprises on their invoices,” commented Brad Mixner, President of Global EDD Group.

“While much of these ill feelings can, and should, be avoided through strong communication and project management, we as an industry – law firms, corporations and service providers alike – need to ask ourselves if it is simply time to change how we do business.  The scope of services provided in any given matter has increased exponentially as the volume of discovery data has exploded, yet we still are engaged in a “race to zero” in regards to eDiscovery pricing?  With the understandable pressure to reduce the overall cost of litigation, are value, quality and performance less important than the bottom line on an estimate?, ” Continued Mr. Mixner.

It is interesting to note that Global EDD Group is pushing the envelope on pricing with a $123 per gigabyte flat rate.

“This is an interesting topic. Pricing is an area that has been a source of distress for both service providers and clients for many years. In any industry there can be individuals that act in an unethical manner, but the suggestion in the article that the entire industry is corrupt is a bit of a stretch,” commented Shawn Huston, Litigation Support Consultant at MerlinOne.

“Corruption” can and does take place regardless of pricing model. I have seen poor and unethical practices take place using the flat fee model as well. As with any business partner do your due diligence and ask questions before and after the SOW or contract is signed. If your provider can’t or won’t take the time to answer your questions until you are satisfied with the answers then start evaluating other options,” continued Mr. Huston.

“I have been a service provider for over 17 years. In my experience for the most part most businesses are pretty ethical. The instances of unethical practices are few, but those few color the opinions of the masses. Usually, the unethical don’t last very long in the industry, as bad news travels faster than good news,” stated Vincent Craig, Account Executive at Liquid Litigation Management.

“What I often see (from closer to the client’s perspective) is not necessarily unethical (unless done intentionally), but involves not using the best available methods in handling the data. This can be compounded when a vendor is dealing directly with counsel who (both) might benefit from having someone (in-house or consultant) bridging the gap between law firm and vendor,” commented Ted Brooks, Trial Consultant, Litigation-Tech LLC.

“Things as simple and seemingly mundane as file-naming can present a nightmare when it comes time to prepare for trial. Everything (from all parties and multiple vendors) then has to fit together nicely without database conflicts or errors. The fact that it works just fine in a proprietary hosted environment is of little value if the exhibits, OCR and coding can’t be easily imported into a litigation support or trial presentation database. In order for eDiscovery projects (or any complex process and agreement) to work, both sides must have a clear understanding of all available options, and which are the best for them,” continued Mr. Brooks.

Please note that Mr. Huston’s, Mr. Craig’s and Mr. Brook’s comments were posted on the Litigation Support Professional Networking Board on LinkedIn in response to an article that I had posted titled, “Is there a Litigation Services Pricing Controversy?“.

Results of the Poll on Opinions of How Pricing Should Evolve

The second poll that we ran asked the question: What Type of Pricing Would You Like to See for eDiscovery Services?  Please note that respondents/voters were allowed to choose multiple answers.

  • Fixed price quotes (independent of # of GBs and services) with the option for additional billing as may be required = 25%
  • Fixed price quotes (independent of # of GBs and services) with no additional billing = 23%
  • Per GB pricing on processing and hosting with services listed separately with the option for additional billing = 19.23%

None of these answers were particularly surprising or groundbreaking.  However, they do point to the fact that fixed price bids with the option for additional pricing as may be required seems to be the type of pricing that the respondents would like to see.

Conclusion

Litigation services and eDiscovery pricing is obviously evolving to meet the needs of clients.  With Predictive Technologies moving further to the left in the eDiscovery / Information Governance lifecycle enabling service providers and users to get a much more accurate assessment of how much Electronically Stored Information (ESI) may have to be collected and how much is may cost to process, I believe that the industry is going to be able to address the desires of the respondents from our poll.

 

About Charles Skamser
Charles Skamser is an internationally recognized technology sales, marketing and product management leader with over 25 years of experience in Information Governance, eDiscovery, Machine Learning, Computer Assisted Analytics, Cloud Computing, Big Data Analytics, IT Automation and ITOA. Charles is the founder and Senior Analyst for eDiscovery Solutions Group, a global provider of information management consulting, market intelligence and advisory services specializing in information governance, eDiscovery, Big Data analytics and cloud computing solutions. Previously, Charles served in various executive roles with disruptive technology start ups and well known industry technology providers. Charles is a prolific author and a regular speaker on the technology that the Global 2000 require to manage the accelerating increase in Electronically Stored Information (ESI). Charles holds a BA in Political Science and Economics from Macalester College.