Last week, an article I wrote on controlling eDiscovery costs was published in the Business Leader Post. If you missed it, a link to the article is here.
When writing as an industry expert, I work to maintain objectivity in my articles. However, as the president of The Lorenzi Group, I have some additional points I’d like to address that were necessary to leave out of the original article.
I don’t think anyone is going to argue that eDiscovery has altered the landscape of litigation. Almost every litigious matter today has the potential to need digital forensics and eDiscovery. From the complex IP theft or embezzlement scheme to simple slip and falls, electronic devices are EVERYWHERE… and the information those devices capture, could be valuable… even in a simple slip and fall there can be video camera, cell phones, emails, and more.
This being said, one thing that I believe has happened is that eDiscovery costs have spun out of control! We have a presentation explaining this and why we are in a “bubble” here.
Lawyers, clients, CFO’s… and soon shareholders, are all struggling with understanding WHY eDiscovery is so expensive. It is not an easy question to answer or problem to solve. In fact, answering the question and developing a fix is both complex and difficult.
However, there is one area that we believe can be addressed: eDiscovery pricing.
I believe that clients are paying TOO much for Digital Forensics and eDiscovery services!
Clients have been paying fees based on the “per GB” (gigabyte) and “per doc” (document) model for too long. This model worked when data was relatively small. However, data collection sizes are HUGE – in the terabytes (TB) and approaching petabytes (PB). Even if your vendor concedes and offers to charge by TB or PB, instead of by GB, you (the client) are still paying too much!
Here is a graphic image showing typical eDiscovery pricing:
As you can see, there are a lot of “pay” points.
After spending hundreds of hours meeting with CFO’s, clients, and attorneys, we have come to realize that most buyers have no understanding of what they are paying for. They agree to the terms so as not to feel foolish, but struggle to understand the impact of the “per GB” cost structure.
This brings us to Lorenzi SHIELD.
Lorenzi SHIELD is a new pricing model for the industry. Our comparison studies show that Lorenzi SHIELD reduces the costs of Digital Forensics and eDiscovery services by 30-50%… or more. The concept is simple: We charge by device or project. For greater savings, we offer subscriptions.
Data sizes, shifting hourly rates, search term fees, ingestion & exportation fees are done away with. It no longer matters if you have 2GB of data or 2TB of data. The fee is the same. With Lorenzi SHIELD, we have analyzed the typical need requirements, created streamlined processes around tasks, and built staging for success.
Here is a graphic image explaining the Lorenzi SHIELD pricing model:
The idea is simple:
Instead of paying by data size, which is nearly impossible for clients to estimate or understand, pay by the piece or project… and pay it once, avoiding death by one thousand cuts.
Let me give an example:
Everyone today, it seems, has a smartphone, and often a tablet. The Lorenzi Group handles a bunch of mobile device forensics and eDiscovery for clients. We have been offering this service for almost 10 years, back when BitPim & Paraben were the 2 primary tools for cell phones.
We know mobile forensics. We have billing metrics for mobile forensics. We track the profitability of our mobile device work. From all these metrics, we know that Lorenzi SHIELD can offer mobile device forensic services for $1,500…. regardless of data size. However, if we were charging by GB, the forensic image could be $1,000 and my 128GB SD card (at 25% full) could add $9,600 (32GB * $300/GB)!!
Based on the traditionally accepted pricing model, this price is acceptable. Right?? Or should you be looking for a more cost effective, cost favorable pricing model?
Do I know where eDiscovery pricing is going to end up? No. However, I do believe that we are at a point in the business that a significant amount of the eDiscovery work done today can be commoditized forcing eDiscovery pricing to drop rather significantly.
What do you think? Do we need a new pricing model? Do you think eDiscovery prices are too high? Are you comfortable paying the rate your paying? Why or why not? Let me know your thoughts.