eDiscovery costs HOW MUCH!?
by John Patchett
June 10th, 2014
It’s time to take out the digital trash
Recently I’d been engaged by a major energy company to try and understand why their latest legal hold was costing the IT department so much money and resources, and to provide suggestions on reducing costs and operational impacts. They had just grown their tape library by 400% and were buying trays of disks by the Terabyte to stay ahead of the growing volume of held documents.
Knowing how little time and energy I put into managing my personal email inbox and computer hard drive full of documents from eleventy billion years ago, I thought this was going to be a straight forward engagement. It was going to be about hunting for massively duplicated documents, old useless emails and lost backup tapes.
Once I got into this engagement, I quickly figured out that I was wrong, and that legal holds on data are just the start of a HUGE opportunity for saving MASSIVE amounts of money for this company.
What's discoverable?
The digital world is divided up into structured and non-structured information.
- Structured information is the world of machine generated information. This includes anything recorded in databases or generated as logs.
- Human generated information is considered unstructured. Here we see emails, documents, spreadsheets. It is the unstructured documents that are ‘discoverable’ in a legal proceeding.
Once an organization is subjected to an eDiscovery request, the legal hold on discoverable data extends into the past as well as the future. Which means that all requested documents must be retained and not destroyed as well as all future generated documents, until the legal hold is discharged.
30% Growth:
Organizations have been facing growth of data storage volume and the trend is accelerating. As of 2013 average storage volumes have been growing at a rate of 30 per cent year over year (yoy). That is a doubling of data footprint every 2.5 years. This translates directly into a doubling of discoverable data, and its associated management, risk and cost to business, every 2.5 years.
The Costs of eDiscovery...This is not a cost of storage problem
Increased IT storage consumption and operational impact is where most organizations first detect the effects of an eDiscovery event. This is where my energy client felt the impacts, and what ultimately motivated them to try and understand what they could do differently.
After careful examination of the Capital and Operational expenses related to enterprise storage it was revealed that although data utilization was increasing 30 per cent (yoy), the associated aggregate infrastructure costs were only increasing 2 per cent (yoy). This was explainable due to Moore’s Law. Basically the cost per unit of storage was lowering at about the same rate as the rise in consumption of those same units.
This blows the value equation of trying to justify eDiscovery solutions as an IT Storage opportunity out of the water. Since the lowering cost of storage capacity keeps pace with increased utilization. …and yet there must be more to this…what actually goes on during a litigation hold?
We spent how much money?
Below is a diagram (credit edrm.com) which outlines the internal processes that occur during the execution of an eDiscovery request. Note the yellow triangle indicating reducing volume of relevant data. This volume is reduced through an exhaustive search->identification->preservation process.
Reference: http://www.edrm.net/resources/guides/edrm-framework-guides
It turns out that legal department’s contract external service providers to ‘sift’ through the entire corporation’s discoverable footprint. This is billed on a volume basis - the input volume - of the entire discoverable footprint. If you have about 100 – 300 terabytes of discoverable data, this service could cost you as much as $7.5 -$22.5 Million!
Now we have an effective ROI equation – reduction of discoverable data footprint has a 1:1 relationship to reduction of costs associated with executing the eDiscovery process. The ROI benefits of a reduced discoverable footprint are realized by the legal department in the form of avoided volume related fees during each eDiscovery event.
Call to Action: What can you do?
Efforts should be focused on locating unstructured documents that can be removed from the environment. This can be as mundane as eliminating old emails from the Exchange mailboxes to utilizing elaborate software suites to managed retention policies. But the message should be clear the best way to avoid substantial eDiscovery costs is to have as small of a discoverable document footprint as possible. Here are some core areas to address at an enterprise level:
- Enforce limits – Manage electronic resources to force people towards better information management by enforcing limits on how much, and how long they can store information.
- Change behaviors – Encourage a culture of not letting digital trash build up. Let divisions and individuals see how much they are consuming and the average age of documents. Encourage clean email inboxes, and managed document repositories.
- Purchased solutions – An entire industry has formed around eDiscovery and data management. Companies like Symantec and Varonis are industry leaders. These out-of-the-box solutions can scan and report on the state of information vulnerability and risk. These solutions are also valuable for governance, audit and regulatory compliance.
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