At the end of the day, but before advising attorneys and staff on the best solutions to handle their discovery demands, the ultimate question is, “How much will this cost?” Litigation has always been a cost/risk assessment question. Attorneys look at the claims and the facts of the case presented in order to make a determination of how much money it is worth spending defending the matter before them. The level of risk dictates every aspect of the case.

If a claimant is seeking $10,000 in damages, the cost an attorney is willing to spend defending the claim is going to be rather small; in most cases. If a claimant is seeking $1,000,000 in damages with the possibility of punitive damages on top of that and if the case looks very favorable in light of the risk assessment, then the budget to defend will increase. If the facts present a poor case for the defense, then the budget for the $1,000,000 case is going to shrink.

This is an important backdrop to understand for the Litigation Support Manager before advising their attorneys and staff on the best solutions for litigation support for a given case especially when the case involves electronically stored information (ESI). Understanding this leads to better communication. Better communication leads to better budgeting.

Discussion will often times center on the discovery demand itself and the budget gets lost in the talk. When the budget gets lost and the monthly cost bill is being prepared, all too often the Litigation Support Department gets called into question. Why? Internal law firm litigation support costs are not always accepted as a legitimate cost that can be passed on to the client and equally important is that attorneys are in the dark as to how much it costs to handle the electronic discovery portion of the case.

In my early career, I would all too often be brought into a discussion to answer, “What should we do?”, or “How should we best handle this request?” I would give my advice, proceed to perform the tasks agreed upon, and then present the outside vendor bill and my hours to the attorneys. Sometimes my hours would be written off to the client and the vendor bill would languish forever on someone’s desk and I would have to answer the vendor’s request for payment. Other times, I would be called in to explain the bill. I would say, “You asked me to perform this task and I did.” The attorneys would answer back with, “I had no idea how much this was going to cost.” Why? Budget was not brought up during the discussions.

After these type of experiences, I have made it a point when asked to handle the processing of ESI to run initial cost analysis even if I am not asked to. I do this, because I know that the issue is too important to ignore and unless I raise it, it may never be asked until it is too late. There are other times where I have had experiences, as many of us have, where I hear about a partner or associate calling up a vendor, independent of talking to me, to print out all the emails from a 1 GB PST file so they could review the documents in hard copy. One month and 100 billable hours later, I find out about it. I explain to the attorney that had they sought my advice in the beginning they could have saved about $2,500 in upfront processing costs and about 90 billable hours to the client in review time. I would get sheepish grins, or sometimes very red faces.

Today, many Litigation Support Managers use a formula-based spreadsheet to calculate the cost of handling ESI and other litigation support tasks. This has grown into a very powerful tool to help communicate the cost impacts of pursuing a certain line of litigation support to attorneys. It is also a very powerful tool that Litigation Support Managers can use to evaluate offerings among a variety of support vendors. Whether it’s formulae in spreadsheets, or budgeting software, the goal is to provide information to the litigation team early on so they can factor in the price of handling ESI into the cost analysis of defending their case.

There are several ways that Litigation Support Managers can better interface with the litigation team to ensure that budgeting goals are achieved when a case involves ESI.

1. Integrate the Litigation Support department with the legal department rather than have it stand as a separate entity. Often times, Litigation Support exists as a separate department just as IT. The role of Litigation Support spans across both legal and IT, but in practical terms Litigation Support serves to increase the ability to effectively handle the discovery and trial presentation aspects of the case; a legal function. Bringing Litigation Support directly into the legal department immediately enhances the quality of communication.

2. Initiate discussions early on concerning cost with the litigation team handling the case. All too often a case team meets with Litigation Support weeks after receiving a case and about half way through the discovery process to discuss budget. This is often too late in the process to be helpful and often ends up costing the client more. Early talk about costs can have a profound impact on early case negotiations depending on the volume of data to be processed.

3. Use budget tools to help calculate costs. Formulae based spreadsheets, or budgeting software can drastically increase the accuracy of the electronic discovery budget for Litigation Support. It is important to factor in not only the amount of data to process, but also the impact that amount of data has on the review time. The greater the amount of data to review, the greater the cost to review is going to be. Budgetary tools also force the entire team to get to know that data.

4. Immediately notify the litigation team anything that might affect the budget throughout the lifecycle of the case. Often the volume of data or the complexity of the data will increase the cost of the case. Litigation budgets are based on assumptions. As the case proceeds, hard facts gathered through the discovery process impact these assumptions.

In conclusion, the best defense is the best offense. Start the communication on cost of e-Discovery as early as possible with your case team. This will trigger a more thorough discussion of risk assessment of engaging in defense of a case. Your input on the budgetary considerations of e-Discovery can have a dramatic influence how the case is litigated.

Jeff Steve, Esq., is based on Los Angeles, California where he works for eClairs, Inc., an e-Discovery and computer forensic consultancy and service provider dedicated to helping law firms and corporations classify, process and review electronically stored data. Jeff has over 18 years of experience in litigation technology. He can be reached at +1.213.270.1465, jsteve@eclaris.com or through www.eclaris.com.

NB: This article appears in the January 2010 issue of the Association of Litigation Support Professionals