Updated: Nov 19, 2018
[This is Part 4 of a 5-part blog series. To read the whole series, start with Part 1 here.]
Corporate legal departments are under pressure to cut legal spend, and for many, the first big budget line item that comes under scrutiny is outsourcing, particularly for ediscovery services. Unfortunately, in-sourcing ediscovery comes with a long list of expenses that legal departments are unlikely to consider until it’s too late. In an earlier post, I dug into the acquisition process for a new ediscovery software, which includes the time and money spent researching, negotiating, purchasing, and setting up infrastructure for an in-house tool. Then I moved onto the lengthy, risky implementation process, when you’re migrating your data, building processes, training, and doing everything you need to do to keep your new software from becoming “shelf-ware.”
If there isn’t already smoke coming out of your ears – and your calculators – there’s one more area that you should consider when looking at the real cost of bringing ediscovery in-house: maintenance. After you’ve rolled out your new ediscovery software and everyone’s using it, you still have to make sure it continuously meet your organizational needs and stays up-to-date, both of which can rack up some hefty bills.
Support & Customizations Ediscovery platforms, like the ediscovery process itself, can be complex and technically confusing, and because the stakes are so high, any issues need to be addressed right away. If you previously worked with a third-party ediscovery services vendor, they likely had a dedicated Project Management team to address process, workflow, and technical issues that arose on your cases. After bringing ediscovery in-house, many organizations designate staff members to act as that first line of support – and larger organizations will even hire and train additional staff to build out an in-house support team. But even if you have a dedicated resource responsible for troubleshooting your ediscovery software and supporting internal teams, you’re still going to need support from your software provider – and you’re likely going to need it ASAP.
While many ediscovery platforms offer support as part of their contract agreements, the level of support will vary (see Capterra’s ediscovery software comparison or this older ABA comparison chart for some examples) and some even charge a yearly maintenance/support fee. Many established, on-premises ediscovery platforms offer 24/7 phone/chat support or will handle support requests through online ticketing systems, but these function more like triage systems. Resolving issues requires multiple touchpoints and more in-depth conversations with support engineers during regular business hours, potentially leaving you in the lurch. Some ediscovery software providers offer on-site technical support, but that usually comes at an additional cost. Whichever level of support you think you need, be sure to read the fine print of your contract and plan for any additional support costs so you aren’t left high and dry when an issue arises.
Also, keep in mind that whatever your contract says about support costs will likely not apply to customizations that you need to get the most out of your software, such as integrations with third-party tools for case management, reporting, etc. There might be small tweaks your software vendor will help you with (creating a new field, for example), but anything beyond that will be paid for separately – either through the software provider themselves or through a consultant. For example, up until recently, kCura had a Relativity Custom Development team that worked on small projects and customizations for clients, but now that the platform is expanding, they’re handing off that work to a network of developer partners (Milyli included) who all charge varying rates for their services. Depending on the platform and the level of experience of the developers you’re working with, you might be paying around $100-200/hour for any customizations you want to make.
Scalability Based on your industry, the countries you work with, and the locations of your offices, there’s a good chance that the policies governing the way you store, review, and produce information for litigation will change in the next few years – if they haven’t already. You might find that your department needs to load significantly more data into your ediscovery platform or that the scope of what is considered PII (personally identifiable information), PHI (protected health information), or privileged information widens, leaving you with a much greater redaction workload. Either of these common situations requires more out of your ediscovery platform – more data, more reviewers, more functionality – and that means scaling up. When you were reviewing pricing tiers during the acquisition process, you probably didn’t look twice at the next tier up (of users, data, etc.), but scaling up your data or your users will cost you. And keep in mind that different platforms have different requirements for hardware and software to support the platform, so scaling up to the next tier could also require more servers, more licenses for operating software, etc.
Upgrades & Updates Any ediscovery software company looking to stay on the cutting-edge and serve their customers is going to be constantly developing and improving their software. While that’s a good thing, it also means that you’ll need to account for the cost (in both time and resources) associated with frequent updates and upgrades to your platform. To give you some insider insight, at Milyli we primarily work with Relativity and have helped many of kCura’s customers with their upgrades over the past 9 years. According to Jed Cassinelli, our VP of Services, “kCura releases new versions of Relativity just about every month. Some Relativity customers update their instances with every new version, but on average, the Relativity customers we work with upgrade at least a couple of times a year.”
The typical upgrade process for a company hosting their own ediscovery software starts with updating a completely separate test environment to ensure your usual processes all work within that test environment, and then testing any customizations or applications. Some upgrades can be done smoothly in that test environment without bringing in outside help, but those that involve bigger changes can get messy. “That’s usually where we come in,” says Cassinelli. “When a Relativity customer reaches out to us because they need help with an update, we run through quick tests to let them know what needs to be updated to support the new version, and because we work directly with kCura, we always have insight into likely points where things could break. From there, we give them an estimate of how much time it’d take to make the required changes and ensure everything works smoothly on the new version.” Updates are relatively painless when you have the assistance of a dedicated team of experts to assess and fix any issues, but that does cost money. On the other hand, choosing to handle upgrades yourself comes with its own costs – lik hiring/training resources on testing and rolling out the updates – and also comes with certain risks, since the last thing you want is for an active case to be jeopardized because an update unexpectedly broke something.
And lastly, if you’re working with an on-premises ediscovery platform, remember that your hardware also has a life expectancy, and replacing servers every few years can end up costing you more than your ediscovery software!
CONCLUSION Bringing ediscovery in-house is a popular topic in the corporate legal world these days, with most people assuming that in-sourcing ediscovery is maybe a bigger upfront cost, but will save corporations big in the long-run. Unfortunately, as I’ve tried to demonstrate in this series, the true cost of ownership – from acquisition to implementation to maintenance – includes a long list of big budget items and potential pitfalls that aren’t factored into the decision-making process and often aren’t considered at all under it’s far too late.
So where does that leave the legal department that has business stakeholders holding them to the fire to reduce legal spend and outsourcing? The responsible corporate legal department must do two things:
Research all of the areas of cost mentioned in this series and make an informed decision on the ROI of bringing ediscovery in-house.Evaluate your relationship with your current ediscovery service provider(s) or outside counsel, and come up with ways of leveraging that that relationship to meet your strategic business objectives and budget requirements.
In the next and final post of this series, I’ll discuss the second option above in detail, using our nine years’ experience working with service providers and law firms to give you some insight into how to turn your ediscovery vendor into your partner.