Ride the Lightning
Cybersecurity and Future of Law Practice Blog
by Sharon D. Nelson Esq., President of Sensei Enterprises, Inc.
How "Dark" is E-Discovery Pricing?
November 10, 2011
I read a thoughtful article by Evan Koblentz on Law Technology News entitled, "The Dark Side of E-Discovery Pricing." Evan had been approached by an e-discovery company offering an interview with its CEO – the subject line read "The cuplrits cheapening the eDicovery industry" and her message was that lowering prices would impact the quality of e-discovery. She would not disclose her own company's pricing. Evan very appropriately declined the interview.
Evan is correct that when you ask for pricing, you'll often hear "it depends" – and sometimes with good reason. Here's my beef though. It you can give a vendor a pretty clear scope of work, most of the "it depends" should go out the window.
Our own company, like many others, uses a pricing estimator that is darn accurate. Given the scope of work to be done, the estimator works very well – if the scope changes, so does the estimate.
I agree that pricing is often very foggy to clients and I think this is a disservice. It is true that some companies will so undercut the pricing to get the work that you know doggone well that either their service will be inferior or the pricing will change mid-stream, a tactic which I deplore. And it is true that e-discovery, well done, will command a certain amount of money.
However . . . most of our small cases close at under $10,000 and most of the medium size ones are under $25,000. Not inexpensive, but not upwards of the six figures mentioned in the article either. I think we have to recognize that quality work can be done at lower pricing than in the old days, partially aided by advances in hardware and software – and partially a result of the fact that clients were paying upwards of 500% of true value in the gold rush days because the market cheerfully bore it. The faltering economy brought that curtain down with a thump.
Smart companies these days will work to make their pricing value-based, fair and transparent, with any change in scope quickly reflected by a new written estimate so that the client is never caught by surprise with a severely escalating bill. That's what brings back the repeat business and referrals which makes a company successful over the long run.
It is time that we lift the fog and let the sun shine on e-discovery pricing models.
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