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EDISCOVERY INSIGHTS


HOW TO SAVE AT LEAST ONE MILLION DOLLARS IN EDISCOVERY COSTS


FIVE GUIDING PRINCIPLES FOR FINDING THE HIDDEN MONEY IN THE MATTRESS

BY ADAM CHARDUKIAN

Over the last five years, the eDiscovery industry has experienced dramatic
disruptive change. One of the biggest changes has to do with client
expectations. eDiscovery costs have skyrocketed for a variety of reasons. But
clients seem to believe that technology, not people, now do most of this work.
They expect to pay less because they seem to believe that AI and technology
systems have made eDiscovery cheaper. This has produced substantial downward
pressure on eDiscovery hosting and processing fees.

But the reality is quite different. At a time when clients expect to pay less
due to technology advancements, the costs associated with owning and managing
eDiscovery environments are actually going up—substantially. People, process and
technology expenses increase every year. This has led to a gap that can feel
insurmountable. What do you do when clients expect you to charge less but your
costs are going up? My answer? Sharpen your pencil. In this article, I’d like to
present five guiding principles for cutting at least one million dollars in
eDiscovery expenses—without sacrificing performance. These principles arise
directly from what we’ve learned while conducting hundreds of audits of
eDiscovery environments worldwide. If you want to save at least one million
dollars, and possibly a lot more than this, these ideas could be very useful.  


Who Needs These Ideas?

Thousands of organizations worldwide now own and manage eDiscovery environments.
These entities are of several types:

 * Law firms. Many of these organizations are in the business of adjudicating
   client matters soup to nuts. eDiscovery is an essential part of helping
   produce the most favorable outcomes for clients. But eDiscovery is one of
   several types of professional services they offer. Most law firms do not have
   a core competency in managing eDiscovery environments, although they are
   experts in using the systems to find responsive documents and advise clients.
 * Service providers. These organizations specialize in providing eDiscovery
   services to a range of client types: law firms, corporate clients, government
   regulators and others. They are often exclusively in the eDiscovery business.
   Their competencies in managing eDiscovery environments run the gamut.
 * Major accounting firms (Big 4). These professional service providers offer
   eDiscovery services to clients because of their trusted advisor status. Over
   the last several years, many major accounting and consulting firms have begun
   to offer eDiscovery services because their clients already trust them to
   navigate sensitive matters. In nearly every instance where we’ve conducted
   audits, these companies have a deep bench of Forensics & Discovery experts.
   However they typically leave the management of their eDiscovery environments
   to their Global IT teams or, they have created a “Shadow IT” department out
   of pure necessity.
 * Government regulators. These entities bear the responsibility to enforce
   legislation, investigate infractions and hold accountable organizations who
   violate regulations. Regulators operate with a mandate to protect the
   interests of the general public. eDiscovery empowers them to fulfill this
   mission. Regulators often lack the skills to manage eDiscovery environments
   effectively in-house.
 * Corporations. Some corporations, particularly those with a history of
   litigation events, have chosen to bring eDiscovery partially or fully
   in-house. This allows them to control costs and to keep their private data
   more effectively under their purview. Based on the results of our audits, I
   would estimate that most corporations lack the experience to manage
   eDiscovery environments cost-effectively.

All these types of organizations have likely witnessed the rising costs of
owning and managing eDiscovery environments. What’s contributing to these rising
costs? Here are a few of the major drivers:

 * Technology obsolescence. eDiscovery environments are incredibly technology
   intensive: servers, desktops and laptops, storage systems, disaster recovery
   systems and networks. These systems are often pressed into service 24 hours a
   day, 7 days a week for years on end. Because of this hard use, they wear out
   much faster, in many instances, than comparable technology systems in other
   parts of an operation. Many owners of eDiscovery environments now expect to
   refresh their primary systems every three years instead of every
   five-to-seven years.
 * Proliferation of ESI. Electronically stored information (ESI) has grown
   exponentially over the last several years. Have you heard of zettabytes? They
   are equal to a trillion gigabytes. Some analysts predict that the 64
   zettabytes of data generated in 2020 will escalate to 180 zettabytes by 2025.
   Virtually all of this data is subject to review on eDiscovery platforms.
   Data-set size is now a major driver in eDiscovery events, driving up costs.
 * Proliferation of device types. Along with growth in data, we’ve also
   witnessed a tremendous growth in the number and variety of devices producing
   data. iPhones were introduced in 2007 and smartphone technology suddenly
   became affordable for the masses. Every year these devices have become more
   powerful, allowing them to generate more data. Add to this the exponential
   adoption of the Internet of Things (IoT), which some analysts project to be
   more than 20 billion devices. Most of these device types not only produce
   data, they also can store it. Device types are also a driver of eDiscovery
   costs.
 * Technology advancements. Because of these technology advancements, eDiscovery
   application developers have felt the pressure to continually upgrade and
   improve their software. Each update has a potential domino effect,
   necessitating upgrades to other parts of the eDiscovery infrastructure, like
   OS versions for all virtual servers for example. Staying on the cutting edge
   with eDiscovery applications can be an incredibly expensive proposition.
 * Human costs. Because eDiscovery environments have become more complex, the
   human costs associated with architecting, deploying and maintaining these
   systems have also gone up. We estimate that a typical (if there is any such
   thing) eDiscovery environment for the types of organizations I noted above
   require seven highly-paid professionals, at a minimum. Larger organizations
   with round-the-clock requirements can expect to employ many times that
   number. It is true that many companies find ways to do more with less. But
   doing so does not allow them to stay on the cutting edge, putting them at a
   potential disadvantage to competitors.

So if you were wondering why that eDiscovery line item on your budget keeps
growing every year, there’s your answer, at least in part. But the question
remains: what do you do about it? I have some good news here. My organization
has conducted hundreds of eDiscovery assessments and we consistently find ways
to cut costs. Not one of our suggestions degrade performance, puts you at
security risks or defers necessary upgrades. These ideas are about working
smarter and practicing good stewardship of our clients’ resources. Here are five
guiding principles:

 1. Leverage automation.
 2. Practice judicious outsourcing.
 3. Rationalize your operating environment against your actual needs.
 4. Improve data lifecycle management.
 5. Document application and environment performance benchmarks.

If you’re wondering just how much money these strategies can actually save you,
please allow me to relate a quick story. We recently applied these principles
for a global consulting organization. Our audit uncovered numerous areas where
they could apply these principles. The net-result for them is that their annual
eDiscovery operating costs dropped from $20 million to around $8 million. Will
every organization that applies these principles realize a 60% reduction in
costs? That’s hard to say. But I think it’s important to note that our average
“found money” per company is over one million dollars. For many clients, the
savings are far greater.



KEY TAKE AWAY
“We consistently find that clients who leverage automation cut Processing costs
by 60%-70%.“


Leverage Automation

There are several workflows and operations that can be automated within most
eDiscovery environments. This can yield substantial savings, while increasing
your productivity and billable activity. For instance, have you heard of
Rampiva? This company provides a workflow automation tool that can both speed up
Processing—allowing you to begin Review much faster—and reduce the number of
people dedicated to Processing, or conversely increase the number of projects
and volume of data your processing team can support in a given timeframe.

For example, we recently worked closely with a client to implement Rampiva. This
organization had 12 full-time (well-paid) people handling Processing on a
consistent basis. After the implementation, they only needed four people to
handle routine Processing. This allowed their people to focus on complex jobs
and work on higher-level and usually billable tasks, which empowered the client
to earn more revenue from existing staff. This initiative also impacted
productivity. Whereas before the implementation, only 20% of cases were
available for review within 24 hours, after the implementation nearly 80% of
cases were ready for review within 24 hours.

We estimate that this client saved at least $500,000 annually. While there is a
cost to deploying the software, the savings that can be realized over several
quarters far outweigh the up-front costs. What might this look like for your
organization? That all depends on the number of matters you are handling and the
staff you’ve dedicated to Processing today. But let me give you a fairly common
scenario. Let’s assume:

 * You have three people completing various tasks including staging of
   data-sets, project setup, initiation and monitoring.
 * You have one or more eDiscovery application experts involved in QA of the
   processed data-sets.
 * You have a governance expert overseeing the operations to ensure compliance
   to standard operating procedures.

Let’s also assume the cost of these five highly paid employees is somewhere
around $750,000. Automation could help you reduce the costs associated with
Processing down to around $250,000. With an automation tool like Rampiva, you
could quite possibly re-assign three of these five people to more profitable
tasks, rather than trying to hire additional staff in today’s tight market for
eDiscovery talent. Meanwhile, you get happier clients. Because Rampiva breaks up
your data processing into smaller units, processed data is available on review
platforms much faster than the traditional manual way.

The human costs of your operations might not look exactly like this. You may
have a lot more or a lot fewer people involved in data Processing and staging.
But my point still holds. If you haven’t yet figured out how automation can
improve your operating environment, I would advise you to carefully think about
this. In my experience, automation can cut aggregate Processing costs by
60%-70%. It can also free up staff to work on projects that can make you money
or expand your service offering portfolio.

There’s yet another reason to consider automation—better ROI on your eDiscovery
application licensing fees. Here’s what I mean. Many organizations pay an annual
license fee for their primary eDiscovery application. But not all of these
companies get value out of that license 24 hours a day. The reason that many
companies don’t utilize their licenses around the clock is because they operate
on traditional business hours because staffing across three shifts is
cost-prohibitive.

However, if an automation tool can be working on your behalf, without the need
for human intervention, you are getting better value for the dollar. Your
eDiscovery license can be working for you while you’re asleep. This can produce
a lot of benefits including hitting deadlines with greater ease, lower pressure
on staff during working hours and better utilization of resources. That’s the
power of automation.

Practice Judicious Outsourcing

eDiscovery is an industry where there are very specific and unique skillsets
required to architect, deploy and maintain environments. But the need for those
skillsets is rarely full-time. We find that the skillsets needed to keep
eDiscovery environments operating at peak efficiency include:

 1. eDiscovery application experts. These applications have become increasingly
    more complex. The newest versions of the software often come with some great
    new features. But getting the most out of these applications requires expert
    guidance from people who really understand them.
 2. Data architecture experts. Data architects handle a wide range of
    requirements for managing data effectively. This includes translating
    business requirements into database and data repository specs, defining data
    frameworks and best practices for data handling across the EDRM, designing
    reference architectures and data flows and collaborating with all
    stakeholders for data-intensive processes.
 3. Workflow experts. All eDiscovery operations follow a phased and sequential
    workflow. The ability to hit hard deadlines is often a function of precise
    and effective workflows. These experts design standard operating procedures
    that expedite productivity, while also understanding how certain workflow
    operations will affect the underlying platform.
 4. SQL DBAs. These experts enact the policies of data architects and solve
    real-time performance problems, including load balancing, running database
    integrity checks, clearing database logs, preparing data sets for
    Processing, migrating large volumes of data and unclogging data “pipes” in
    your environment.
 5. Networking experts. These professionals ensure that systems are fully
    connected and that speed, uptime and configuration policies are closely
    observed. When networks go down, so do review platforms. They are also
    experts in internet service providers to ensure adequate bandwidth and
    performance based on environment load.
 6. Security experts. These individuals protect the integrity of data on review
    platforms and throughout the EDRM lifecycle. They are experts in
    understanding where an organization is at-risk of breaches and they
    consistently train and monitor staff to ensure data integrity. They are
    responsible for setting and maintaining security architecture standards,
    encryption methodologies, perimeter controls, and IAM policies. As a
    differentiator, these security experts must inherently understand how the
    implementation of standard security policies and controls can specifically
    impact the performance of an eDiscovery environment.
 7. IT experts. Virtualized systems have become the norm for eDiscovery
    environments. This means IT professionals must now demonstrate a mastery of
    how to do more with less, how to tune and manage these systems for optimum
    up-time and how to prevent catastrophic system failures.

All of these skillsets are available to “rent” versus to “own.” After conducting
hundreds of audits of eDiscovery environments, I’ve come to believe that there
are much better economies of scale available to renters than owners. Why would
you own, as a full-time employee, a security expert, data architect, application
expert or the like when you really only derive benefit from their work a few
days out of the month?

Most people I’ve spoken to answer that question this way. “I want full-time
employees because I never know when I might need them and when I need them, I
need them right now.” I understand this mindset. I believe it’s more about peace
of mind, believing you have talent standing by and ready, than it is about the
reality of the performance of these people. I say that for two reasons:

 1. These professionals will get sick, need vacations, have family emergencies
    and the like. This means that they, in fact, may not be available when you
    actually need them.
 2. These professionals, as much as they have training, are probably limited in
    their problem-solving skills to the experiences of working for just a
    handful of companies. This means they may not be performing for you more
    effectively than other professionals who solve those same problems for
    hundreds of organizations.

Let me give you a comparator. Let’s assume that this team of seven professionals
costs you 1.5 million dollars a year, all-in (salary, benefits, office space,
etc.). By comparison, you can rent those same skills for about half that cost.
Better yet, a great managed services provider with technology expertise in this
space will give you actual availability of skillsets, not just perceived
availability, by offering service level agreements (SLAs) with guaranteed
response times, target resolution times and potentially even service level
credits against your monthly fee for missed SLAs.

For example, a great managed services provider can guarantee a response within
15 minutes to support calls. These organization also typically have a large
number of professionals on their bench who can be called in to resolve problems
quickly. These professionals usually have worked with hundreds of other
companies, not just a few, so they know how to solve problems quickly and
thoroughly. In my experience, a great managed services provider can give you
better results for far less money than you’re likely paying today.

And I want to say this for the record. I do not believe it is wise to bring in
managed services providers and then fire your employees. Great employees are
hard to find and it’s not a good idea to simply sack them. Instead, I recommend
that you find better roles for them that allow them to make an economic impact
on your business. I have lots of ideas about how to do this, but that’s not what
this article is about. If you want to know more about my ideas, just reach out
to me.


KEY TAKE AWAY
“A great managed services provider can guarantee 15-minute response times to
emergency requests.“

Rationalize Your Operating Environment Against Your Actual Needs

If you want to save at least one million dollars in eDiscovery costs, I
recommend that you carefully analyze your actual technology needs. Why do I say
this? In the vast majority of environments we’ve audited, we’ve found two
things:

 1. Most environments are over-built. This happens for a variety of reasons.
    Sometimes, technology was purchased to provide for future, but
    not-yet-needed, capacity. Sometimes it’s purchased because budgets are
    use-it or lose-it. Some purchases are made because people are not aware of
    better options or because they were given erroneous recommendations.
 2. Most companies had never conducted a full-blown total-cost-of-ownership
    analysis. This means that no one can actually tell, in real dollars, how
    much the organization is spending annually on eDiscovery management.

How much can this exercise save you? Let me give you some examples.

 * Some people seem to believe that eDiscovery works best on Solid State Drives
   (SSDs). These types of drives, while very fast, are also very expensive. We
   believe they should be reserved for I/O-intensive operations. We recommend
   that no more than 10-20% of your storage environment should be on SSDs. This
   alone can save hundreds of thousands of dollars in unnecessary expenditures.
 * SQL servers are another area to closely examine. We recommend RAM over Cores.
   Why? Microsoft licensing is based on Cores. But due to eDiscovery workflow,
   which is heavy data operations versus complex SQL operations, additional
   Cores offer little upgrade in performance while driving up costs. In the
   eDiscovery realm, a 32 Core system with 512 GB RAM performs nearly the same
   as an 8 Core system with 512 GB RAM. But 32 Cores versus 8 Cores represents
   about $6,000 per month in additional and unnecessary SQL licensing expense.
 * Speaking of SQL licenses, we continuously see SQL servers incorrectly
   licensed based on their Core & RAM allocation and the associated workload and
   tasks being performed. SQL Standard licenses usually cost hundreds of dollars
   a month while SQL Enterprise licenses cost thousands of dollars a month. In
   our experience, SQL Standard is more than capable of handling many jobs. We
   find that many organizations overpay by up to tens of thousands of dollars
   per month for SQL licenses.
 * Disaster Recovery (DR) is another place to examine. In the majority of cases,
   we believe DR environments should be specified to meet approximately 25% to
   50% of your production environment’s compute facilities. We often find that
   companies make unnecessary promises to their clients and these increase
   costs. For example, they build an environment to be 1:1 specified against
   their production, when 75% of their production environment consists of
   inactive matters that have not been touched for months, sometimes even years.
   Intelligently designing your DR environment to effectively handle the
   percentage of active matters and reviews at any given point in time, as
   opposed to the maximum possible load, could save you hundreds of thousands of
   dollars a year.

These are just a few areas that we routinely identify as major cost drivers. I
did not dive into the selected technology stack, as this is usually a foregone
decision once we are brought in. But the tech stack also has a dramatic impact
on cost and can be gradually remediated as you scale your eDiscovery environment
over time. For more information on this topic, I recommend our CTO’s whitepaper
on The Case Against Hyper-converged Infrastructure in eDiscovery.

Improve Data Lifecycle Management

Data storage is expensive. Our audits show that many companies have 90+ day old
case data sitting idle on costly storage units, wasting space and diminishing
performance. Or they pay a service provider $5 per gigabyte per month to store
it. A data lifecycle management plan can deliver huge savings, as low as $.04
per gigabyte per month. We recommend that storage plans should be tiered and
based upon business requirements, with SLAs that clearly define restore
policies, timelines and pricing. What might this look like?

 * Premium hosting for active matters ($$)
 * Long-term storage for inactive matters ($)
 * Cold storage for archived/completed matters ($)
 * Removal of matters that are no longer viable

How much can this actually save you? We recently conducted an audit for a client
and discovered that they had 63 terabytes of data with a service provider. They
were paying the provider $5 per month per gigabyte. Our analysis indicated that
20 terabytes had not been touched in years. That data could have been deleted.
Instead, that company was paying $100,000 per month for valueless data and had
been doing so for months on end.

Document Application And Environment Performance Benchmarks

eDiscovery application vendors publish performance benchmarks based on
laboratory operating conditions. These benchmarks are usually derived from
best-case-scenarios and everyone knows this and doesn’t expect to realize that
same performance in-house. However, our assessments have shown the many clients
are actually seeing performance rates that are so far below the benchmarks that
something is definitely wrong. In more than one instance, we have seen actual
performance at 50% to 75% of the promised benchmarks.

If you are not tracking your application performance against the benchmarks, I
recommend that you begin to do so right away. I say this for three reasons:

 1. In some instances, application vendors can show you how to modify your
    practices to improve your results. But you won’t know you need to do this if
    you don’t document your performance.
 2. The preferred solution for under-performance often seems to be—throw more
    hardware at the problem or purchase more licensing from the application
    vendor themselves. That’s often an unnecessary expense. Before you buy more
    hardware, document your application performance and engage your application
    vendor.
 3. You can gain leverage in negotiating your licensing fees if you can show
    substantial differences between the benchmark and your actual performance
    and this can save you a lot of money.

Let me give you an example. Let’s say your vendor states that one worker can
process 5GB of data per hour per worker. Let’s also assume that your actual
performance is 2.5GB per hour per worker. Let’s also assume that you have
contacted the application vendor and followed their counsel and yet performance
has not improved. What can you do? This puts you in an excellent position to
negotiate licensing fees to be in line with the promised benchmarks. Depending
on your annual licensing fees, the savings from this could be measured in the
hundreds of thousands of dollars.

Finally, I recommend that you benchmark application utilization and environment
throughput around the clock, whether or not you run a 24×7 operation. This can
give you insights into where you can increase operating leverage. How so?

 * If you identify times of heavy and lighter load from reviewers, you can
   adjust internal Processing and administrative operations to ensure minimal
   impact on system responsiveness.
 * This can help you track and understand individual staff productivity across
   shifts.
 * To prevent the unnecessary purchase of expensive new hardware, you can better
   balance workloads 24×7 with automation tools or additional staff resourcing.

A 24×7 utilization benchmark gives you the full picture of your environment’s
operating capability. Then, and only then, can you make fully informed and
data-driven decisions as it relates to future investment.

Next Steps
The five Principles I’ve discussed here—automation, outsourcing, rightsizing,
archiving and benchmarking—have saved our clients, on average, one million
dollars per year. As you can tell, I love helping our clients save money! My
door is always open to discuss these important cost-saving measures. I am
passionate about helping clients work smarter and get more out of their
eDiscovery environment, especially as downward pressure on fees has become the
norm in our industry. Prior to your next budget review, I would advise you to
leverage the expertise of an objective, third-party consultant to provide a
full-blown assessment. This will help identify, catalog, and rationalize your
eDiscovery expenditures while providing recommendations on cost-saving
strategies, customized and rightsized to your business needs.
About the Author


ADAM CHARDUKIAN

CHIEF OPERATING OFFICER, GEORGE JON

Adam is the Chief Operating Officer of George Jon, Inc. As the primary author of
GJ’s Strategic Roadmap, he ensures that the organization’s value propositions
are aligned with market needs and are positioned for continuous growth. Adam
delivers industry-specific knowledge gained over 10+ years of management
consulting experience – directing multiple large, digital transformations;
establishing enterprise-wide operating models; and conducting due diligence for
technology platform selection – to clients around the world. His expertise is
rooted in target operating model design, business strategy development,
financial analysis, product management, and Lean Six Sigma implementation.


About George Jon

George Jon (GJ) is an eDiscovery infrastructure, product and process specialist,
delivering performant, scalable, fault tolerant environments for users
worldwide. GJ works with global corporations, leading law firms, government
agencies, and independent resellers/hosting companies to quickly and
strategically implement large-scale eDiscovery platforms, troubleshoot and
perfect existing systems, and provide unprecedented 24/7 core services to ensure
optimal performance and uptime. 

George Jon’s (GJ) conclusions are informed by fifteen-plus years of conducting
enterprise-class eDiscovery platform assessments, application implementations
and infrastructure benchmark testing for a global client base. GJ has compiled
extensive quantitative and qualitative insights from the research and
implementation of these real-world environments, from single users to
multinational corporations, and is a leading authority on eDiscovery
infrastructure.

eDiscovery security questions? Let’s talk.

George Jon is the global leader in scalable, performant, and secure eDiscovery
platforms, processes, and services.
Your data never sleeps. You should.


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