E-disclosure: Spoilt for Choice

August 31, 2010

A half hour trawl of Google will demonstrate that there are, at least, 50 companies operating in the UK that offer e-disclosure services. How to choose which provider is best for you, best for your client and best for your case is a complex and often confusing process.

At the most basic level most external service providers provide essentially the same service, in that they take data and process it against agreed criteria and provide it back to clients in a format which is capable of review. I’m absolutely sure that most service providers would argue that they provide better, faster, safer or additional services to their competitors. However, what is certain is that the methodology by which the service is provided varies from provider to provider as does the price, the pricing points, and the assumptions used to arrive at a final cost for the purposes of providing a quote.  

Add to this mix the less easily quantifiable elements of reciprocity, reputation, personal relationships and will on the part of the solicitor and client to assess the market, and it soon becomes apparent that external service provider selection is rarely empirical. 

Size Matters 

Large law firms sometimes conquer these problems by employing litigation support managers who, amongst other things, spend their time assessing the capabilities of e-disclosure service providers and developing relationships and pricing strategies which suit both the law firm and the service provider.  

Mid tier and smaller firms very rarely employ litigation support managers and so are immediately at a disadvantage when it comes to disclosure. These firms need to have in place procedures to allow knowledge learnt from one electronic disclosure exercise to be passed to the next individual or team embarking on a similar exercise. Of particular importance is how to procure the services of an appropriate external service provider. 

Know What You Want

When selecting a service provider, firms of all sizes need to be clear about what services they need if they want to be in a position to get realistic quotations and time estimates. Consequently a comprehensive and detailed scoping exercise is very important. This process is made easier by the ESI Questionnaire, but the questionnaire does not do the job for you!  It is important that detailed questions are asked both of the client’s IT department and of the client’s employees who are involved in disclosure in order to fully understand the totality of what your clients have under their control. From that bedrock of knowledge, informed and defensible decisions can be made against the backdrop of the value of the claim about what is reasonable and proportionate to disclose in any given case. 

Solicitors also need to know what they themselves have in terms of technology for the review of documents, if you have a review tool available internally can you use it (ie is there capacity in terms of server space and technical support) to host the documents in house. Or do you want to utilise an externally hosted service (and if so would you prefer that service to be provided by the same external service provider who does the document processing or an alternative external service provider).

The process of selecting a service provider

There are various major points to which firms would be well advised to pay particular attention. These are: 

  1. the external service provider’s capabilities
  2. the size and experience of the external service provider
  3. the external service provider’s charging methodology
  4. the external service provider’s working assumptions. 

1.            External service provider’s capabilities 

The way in which external service providers process the documents they are provided with can be very different. Law firms should ask their external service providers about their capabilities, including: 

1.       Where does the processing of data occur? (if it is outside the EEA, there could be data protection issues.)

2.       Does the external service provider use an off-the-shelf document processing engine or is it an application they have developed themselves? (If it is off-the-shelf are there any known issues with the product, if it is a proprietary application how has it been tested and benchmarked?)

3.       Does the service provider’s process utilise lists of ‘Noise’ or ‘Stop’ words and if so are these lists modified depending on the contents of keyword lists?

4.       What is their daily document processing capacity? (Not really to assess speed as most service providers will deliver documents to a review tool on a rolling basis faster than they can be reviewed, but to assess the level of sophistication of the organisation.)

5.       Does the service provider have their own data collection and forensic capability or do they subcontract those elements to a third party? (If they do use sub-contractors who are they and what are their qualifications?)

6.       What document types, if any, is the external service provider unable to process? (There may be specific technical file types in the litigation which the service provider cannot handle.)

7.       Can the service provider search and host audio files? (This is increasingly important as many companies record all incoming calls.)

8.       Can the service provider deal with foreign language documentation? (If not, is that going to be a problem for your case?)

9.       Can the external service provider scan, code and OCR paper documents and then add them to the electronic document collection? (If they do use sub-contractors for this work, who are they and what are their qualifications?)

10.   Does the external service provider have a hosted review tool option? If so:

a.       How good does the firm’s internet connection need to be?

b.      Do the lawyer’s firewall settings need to be altered and will this compromise the integrity of the firm’s network?

c.       How is the review tool supported?

d.      Can documents be printed from the review tool?

e.      What security measures are there surrounding the review tool?

f.        How fast does the review tool run?

g.       Does the review tool cope with spreadsheets?

h.      Can the review tool carry subjective coding across duplicate documents?

i.        What project audit functions does it have?

11.   Can the service provider create load files for the other parties’ document review tool? (The ESI questionnaire requires parties to co-operate on the provision of documents to one another.)

12.   Can the external service provider paginate and print large quantities of documents if required? (It may well be necessary to print large quantities of documents for the court or less sophisticated parties.)

13.   How does the external service provider usually archive or delete jobs? (Clients will usually want all of their data removing from service providers systems at the end of a job.)

14.   Can the service provider give you immediate answers to questions 7, 8 and 9 of the ESI Questionnaire? 

The capabilities of the external service provider must, to a large degree, match the requirements of the legal team if they are going to consider using the external service provider for the work required. However, don’t rule out service providers who are a near match but offer great value for money. 

2.            The size and experience of the external service provider 

The general perception within the legal community is that it is safer to use larger service providers than it is to use smaller less established providers. This may sometimes be true but there will always be a trade-off between size and experience and cost. In order to accurately gauge whether or not it is worth taking the ‘risk’ of using smaller service providers law firms should find out: 

1.       What experience and qualifications do the people working on the electronic documents actually have?

2.       What were the sizes (total number of gigabytes processed and total number of pages of documentation provided for inspection) of the last three electronic disclosure projects the external service provider completed?

3.       How many people do they employ working directly in electronic disclosure?

4.       Are they willing to provide references?  

Many law firms end up developing very effective working relationships with smaller service providers with whom they have experience and whom they trust to do the work on time and within budget. 

3.            The external service provider’s charging methodology

Most external service providers charge using one of two broad approaches: 

1.       The majority of the overall price is formed by charging a price per gigabyte of data that is provided by the client for processing and filtering (data ‘in the top’ pricing).

2.       The majority of the overall price is formed by charging a price per gigabyte of data that is passed for review to the client after filtering and processing has taken place (data ‘from the bottom’ pricing). 

Both methods give a great deal of control to legal teams over the overall cost of their electronic disclosure exercise.

If ‘in the top’ pricing is used then the scoping phase of the process becomes even more important as parties should only be giving the absolute minimum amount of data to their external service provider for processing.

If ‘from the bottom’ pricing is used then particular attention must be paid to development of the data filters to ensure that as few irrelevant documents make it through to the review stage.

Legal teams often prefer ‘in the top’ pricing (even if it proves slightly more expensive) as it provides certainty of cost to their clients. ‘From the bottom’ pricing estimates are only ever best guess quotes (external service providers are often very good at providing that best guess) until the actual data has been filtered and processed. 

On top of these processing charges there are always a number of peripheral costs that soon add up. These are far too numerous to list (and by the time any list was created it would necessarily be out of date), but very broadly there may be charges for: 

·         data collection

·         data preparation

·         data processing

·         data manipulation

·         data production

·         data archiving.


4.            The external service provider’s working assumptions

This is often overlooked by legal teams that seek to purchase the services of an external service provider. The temptation is to say, as I did at the beginning of this article, ‘All of these external service providers provide essentially the same service so we’ll just compare bottom line pricing and go with the least expensive one’. This is a mistake because, in order to provide a quote, service providers have to make certain assumptions about the data and about the filters that will be applied to it. 

(a)       Amount of data collected

The simplest way for external service providers to bring the bottom line cost of their quotation down is to have low estimates for the likely amount of data collected from each individual who is subject to disclosure. This is applicable whether or not external service providers charge using an ‘in the top’ or a ‘from the bottom’ methodology.

With very little research, legal teams can find out the likely amounts of data that each individual subject to disclosure is likely to have in their possession. IT departments can usually give good estimates of mailbox sizes, file share sizes and personal server space size, it is also quite simple to find out the likely amount of personal data (ie non-system data) held on portable storage devices and laptops.

Given the relatively small size of the task of discovering this information, it is always best to give assumptions on the amount of data to be provided to external service providers rather than let them come up with their own assumptions.

This is not the end of the story though and legal teams must continue to bear the following two points in mind. 

(b)       Explosion rates

E-mail ‘container files’ are the usual manner in which e-mails are stored and their qualities mean that it is sometimes possible for legal teams to collect their own e-mail data and have a preliminary look at it, secure in the knowledge that they are not altering the metadata associated with the e-mail.

Another property of container files is that they compress the data held within them, and so when the e-mails are removed from the container files the sum of all of the e-mails sizes far exceeds the size of the original container file. The actual rate of compression is not uniform and can vary from no compression at all to up to 10 times compression (or more).

Most external service providers will charge for the size of the uncompressed (exploded) container file. This means that if an external service provider is charging £500 to process 1 gigabyte of data and their client provides them with 1 gigabyte of .pst data (Microsoft Outlook’s container file) the likelihood is that it will not cost £500 to process but anywhere between £500 and £5,000 depending on the rate of compression.

Clearly external service providers who are looking to lower their overall quote will estimate a lower compression rate (of say two times) working in the knowledge that the likely compression rate is going to be higher (more usually 3-3.5 times the size of the container file). In order to get a look in at the tendering stage, they need a low quote and they’ll deal with the price increase at a later stage.

It would be unfair to say that this practice is usual, or even widespread, amongst external service providers but in order to ensure that quotations are being compared on a like-for-like basis it is advisable for legal teams to specify what compression rates their potential external service providers should use when giving a quotation.

There are some external service providers who do not charge on the exploded size of the file but on the compressed file size.

(c)      Filtration rates

Whilst explosion rates are important whether the external service provider charges using an ‘in the top’ or a ‘from the bottom’ charging methodology, the rates that are assumed for filtration really only affect the external service provider’s costs if they charge using a ‘from the bottom’ charging methodology (although these assumptions will affect legal team assumptions about review team time and cost whichever methodology the external service provider uses).

If a ‘from the bottom’ charging structure is used then the rates of filtration are extremely important to the overall cost. Without testing the filters it is almost impossible to tell what the proportion of documents passed for review will be and so external service providers use their experience to provide a best guess. Usually the guess is pretty good, but legal teams do need to ensure that all external service providers are using the same assumptions, because, as with explosion rates, some external service providers will assume a higher rate of filtration to bring the estimated cost down.

External service providers who charge using a ‘from the bottom’ methodology are particularly prone to very large swings in price when both the assumptions on explosion rates and the assumptions on filtration rates interplay with each other and so sometimes provide a high end quote and a low end quote. This is useful from a transparency perspective (ie the external service providers are acknowledging that the assumptions may be wrong and so prices may vary) but not very useful when legal teams go with the overall prices to their client. Generally, clients want to know an exact price in order for them to budget appropriately.


Being prepared before going to external service providers for quotations allows lawyers to take control of the procurement process. Using the ESI questionnaire will help in this preparation. 

Being proactive and engaged in the process will allow litigators to set the tone of disclosure with the opposing party and to demonstrate the open and co-operative approach they have adopted (should the court ever be interested in the conduct of parties).  

The simple comparison of bottom line costs does not give a like-for-like comparison and legal teams need to be constantly aware of the various ways in which likely costs can be manipulated by altering basic assumptions.  

It must however also be remembered that the vast majority of external service providers wish to offer a great service and real value for money, and have different assumptions behind their pricing because they have different experiences in the marketplace. 

Many law firms use the same external service provider time and again. There are valid reasons for this, not least the personal relationship that builds between lawyer and external service provider which can often benefit legal teams through preferred pricing and service arrangements, as well as growing familiarity with working practices and proprietary tools. However, this should never stop legal teams from making the procurement process competitive and using the purchased solution which most appropriately solves their problem. By keeping external service providers on their toes, legal teams will usually obtain better pricing and service than if they use an external service provider out of habit. 

Through his firm i-Lit Limited (www.i-lit.co.uk), barrister turned technogeek, Mike Taylor, has advised law firms and their clients on e-disclosure best practice and strategy since 2006.