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Where the Money Goes

Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery

Nicholas M. Pace
Laura Zakaras
Copyright Date: 2012
Published by: RAND Corporation
Pages: 158
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  • Book Info
    Where the Money Goes
    Book Description:

    This monograph provides a richly detailed account of the resources required by a diverse set of very large companies operating in different industries to comply with what they described as typical electronic-discovery requests and suggests ways to reduce those costs, as well as address concerns about duties to preserve data in anticipation of litigation.

    eISBN: 978-0-8330-7774-5
    Subjects: Law, Technology

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-viii)
  4. Figures
    (pp. ix-x)
  5. Tables
    (pp. xi-xii)
  6. Summary
    (pp. xiii-xxii)

    Pretrial discovery procedures are designed to encourage an exchange of information that will help narrow the issues being litigated, eliminate surprise at trial, and achieve substantial justice. But, in recent years, claims have been made that the societal shift from paper documents to electronically stored information (ESI) has led to sharper increases in discovery costs than in the overall cost of litigation.

    In response, the Federal Rules of Civil Procedure have been amended several times in the past five years, and most states have adopted or amended rules of procedure or evidence to address a range of challenges posed by...

  7. Acknowledgments
    (pp. xxiii-xxiv)
  8. Abbreviations
    (pp. xxv-xxvi)
  9. CHAPTER ONE Introduction
    (pp. 1-16)

    The process by which a party in a civil lawsuit can demand that an opponent produce documents, answer written questions under oath, give sworn testimony, and even submit to a medical examination is one of the defining features of the U.S. civil justice system. Such pretrial discovery procedures, often conducted with little supervision from the judge overseeing the litigation, are designed to help narrow the issues, eliminate surprise at trial, and achieve substantial justice. But, although various issues related to the discovery process have been long been the subject of discussion and debate by lawyers, judges, policymakers, and academics, the...

  10. CHAPTER TWO Production Expenditures, by Task
    (pp. 17-32)

    In this chapter, we examine how production costs in our sample cases break out by collection, processing, and review.

    Though it is not possible to assess the extent to which the cases included in our data collection actually reflect typical e-discovery production in the participating companies as we had requested, total expenditures do range from a seemingly modest $17,000 (in an intellectual property matter) to $27 million (in a product-liability case), with a median value of $1.8 million (see Table 2.1). Note that we were able to calculate total spend for ESI production in only 45 of the 57 cases...

  11. CHAPTER THREE Sources of Expenditures
    (pp. 33-40)

    In this chapter, we present our findings on the costs of producing e-discovery by the source of expenditure, such as internal organizational resources, vendors, or outside counsel. At the end of the chapter, we explore the roles these sources may play in performing various e-discovery tasks and discuss how the current relationships may change in the future.

    Though we took steps to help participating companies describe the extent to which internal resources, such as law department counsel and IT department staff members, played a role in the e-discovery production cycle, we were frequently told that the organization’s employees’ contributions to...

  12. CHAPTER FOUR Reducing the Cost of Traditional Eyes-On Review
    (pp. 41-58)

    In this chapter, we describe two possibilities for reducing the costs of traditional review practices—reducing the cost of labor and increasing the speed at which lawyers can review documents—and we estimate the maximum savings that can be achieved through these means. We conclude the chapter by addressing the quality of review conducted by attorneys, which is currently considered the gold standard for assessing relevance, responsiveness, and privilege.

    With more than half of our cases reporting that review consumed at least 70 percent of the total costs of document production, this single area, described by one participant in our...

  13. CHAPTER FIVE Moving Beyond Eyes-On Review: The Promise of Computer-Categorized Review
    (pp. 59-70)

    We have shown that it will be difficult to achieve substantial cost savings in review solely by future reductions in the cost of labor or future increases in the rates of review. Litigant expenditures for review are unlikely to decline to levels approaching those incurred for processing if review continues to be based on visual inspection of individual documents. If e-discovery production costs are ever to be addressed in any meaningful way, then the legal community must move beyond its current reliance on eyes-on review.

    Our assessment of the published research in this area suggests that computer-categorized document review has...

  14. CHAPTER SIX Barriers to Computer-Categorized Reviews
    (pp. 71-84)

    We have shown that predictive coding in large-scale discovery review has the potential to yield significant cost savings without compromising quality as compared with that provided by a human review. If this is indeed the case, it is reasonable to ask why it is not being adopted by more litigants. None of the companies participating in our data collection, for example, employed a computer-categorized review strategy, despite having firsthand knowledge of how expensive review can be. Although some reported taking aggressive steps to reduce their production expenditures, such as setting up their own review shops in-house, farming work out to...

  15. CHAPTER SEVEN The Challenges of Preservation
    (pp. 85-96)

    In our initial interviews about production costs, we often heard concerns about the challenges of preserving electronic information long before a demand for production was received. These concerns went well beyond the cases included in our study: They extended to litigation that never reached the discovery stage and even to situations in which no complaint was ever filed. In fact, some in-house counsel expressed more concern about the challenges and costs of preservation than about the costs of responding to requests for document production.

    To understand these issues, we conducted a separate set of interviews that focused on these questions:...

  16. CHAPTER EIGHT Conclusions and Recommendations
    (pp. 97-102)

    It will come as no surprise to experienced litigants that the costs associated with large-scale document reviews dominate total production expenditures—$0.73 of every dollar spent on electronic production in our set of 57 cases was spent on review. As the volume of digital information grows every year, the problem becomes more urgent: How can the costs of review be addressed?

    We found little room for improvement in these costs if litigants continue to use linear processes that require eyes-on inspection of every document. The costs of attorney services in the United States for large-scale reviews, if current practices continue,...

  17. APPENDIX A Supplemental Tables
    (pp. 103-116)
  18. APPENDIX B Recall, Precision, and Other Performance Measures
    (pp. 117-120)
  19. References
    (pp. 121-132)