E-Discovery: Price vs. Cost. A Case for Fixed-Fee, Unit-Based Pricing

http://ow.ly/bNLDM

An article by Marc Zamsky posted on the eDiscovery Roundtable Blogspot.

This article discusses eDiscovery pricing models, and examines a traditional volume based pricing model as opposed to a fixed-fee alternative.

The article states, "...e-discovery cost calculation is, however, not without difficulty. This is due, in large part, to the fact that e-discovery services tend to be purchased in many phases, sometimes from multiple providers, with varying price points for such services, ultimately complicating your ability to determine total cost.

More difficult is “normalizing” that cost—i.e., finding a common measurement between cases to which all costs can be associated—i.e., cost per document reviewed, cost per document produced, cost per gigabyte processed. Notwithstanding, this ability to create a benchmark measurement, giving buyers a barometer with which to measure their service providers and future buying decisions, is critically important to ensuring cost-efficiency and accountability."

The article mentions metrics that can be used to help gauge costs, such as the number of documents reviewed per hour.  Past experience on similar projects can help serve as useful guides.

The article further states, "For purchasers of e-discovery services, using a fixed price per unit methodology for engaging service providers and measuring cost gives you the objective data to help you set the bar. Using data and metrics to determine cost is a powerful tool that exists within the hands of every law firm and corporate legal department today. It should beget a paradigm shift away from nebulous pricing schemes and negotiation purely on price, and engender a ground-swell movement toward cost-based, capped unit price bids that bring certainty, transparency and accountability to the process."