Posted on: August 18, 2016in Blog
4 Hidden Costs of Purchasing a Legacy Document Review Tool
A few months back I wrote about how legacy review tools (Concordance and Summation, for example) can undermine the productivity of a document review. In that post, I argued three points about these “old-school” databases. First, most firms were not prepared for the challenges of data management required to support an in-house solution. Second, legacy review tools lacked the sophistication required to handle the burgeoning growth of data in today’s litigation environment. Third, the desktop solutions lack the reliability and safeguards of larger more robust SQL-based platforms. These are all good reasons to investigate a hosted solution (Relativity, Eclipse web, etc.) over the traditional in-house solutions, but what wasn’t discussed in that post are the costs associated with maintaining a legacy review tool.
Perception is that the hosted solution is much more expensive given the traditional model of monthly per gigabyte, user fees, and hourly charges for support. The desktop solutions and their “low-cost” license fees seem to be a much more cost-effective solution. Yet, when pulling back to take a broader view of the overall costs, one begins to see a different picture.
To truly understand the cost of ownership it is important to look beyond licensing and to include some analysis on data storage, storage management, security, and labor.
The cost is not simply a licensing cost; there are also costs associated with data storage, labor, and security. These costs are certainly measured in dollars, but mishandle any of these items and costs metrics can change from simple dollars to the more complex loss of business or reputation. Below are some of the costs associated to maintaining a legacy review tool.
The most obvious cost factor when maintaining a legacy review tool is licensing. Depending on the product, license fees vary, and some are undeniably inexpensive. These licenses may be granted on an annual basis with few restrictions on number things like the number of users and data volumes. Unlike hosted solutions with per gigabyte pricing and individual user licenses, these solutions can appear as the “cost-conscious” solution. That being said, the more features required, the more expensive the solution. As noted above, license fees are only part of the cost of ownership for a legacy review tool. To truly understand the cost of ownership it is important to look beyond licensing and to include some analysis on data storage, storage management, security, and labor. These are all factors to be considered when choosing between a legacy review tool and a hosted solution.
2. Storage Management
Another obvious cost of traditional review tools is storage. All that data has to “live’ somewhere. Recently there has been a lot of news about the plummeting cost of data storage. Just ten years ago you could expect to pay $150 dollars for a 300GB external hard drive. Today the average external hard drive comes in 1TB size for around $50, which is a drop from $0.50/gb to $0.05/gb. But storage costs are driven by more than just space. Storage also requires investment in hardware, software, and maintenance of those resources. Building out an IT infrastructure is costly, and with rapidly expanding data volumes across all litigation matters, there is a need to manage and continually expand your storage capacity. So while storage costs are on decline, hosting data continues to be a costly proposition, driving more and more interest in the cloud.
Maintaining a Flexible Infrastructure with a Hosted Solution
When comparing a legacy review tool against a hosted solution, the storage costs and maintenance of the IT infrastructure housing those data stores must be factored in. In a hosted solution, those costs are distributed to all customers through the monthly billing model. A hosted solution allows users to ramp up and ramp down their commitment to storage, without having to maintain a storage environment during slow times.
Although security costs are less obvious than licensing and storage, they are no less important. In fact, if recent headlines are any indication, not maintaining a secure environment for your hosted data could be more costly to your business than anything. Imagine landing that high profile litigation only to find out that your servers failed or worse yet were hacked.
Security as a Top Priority
For the hosting vendor, security is a top priority. A secure environment constantly monitored against data breach is a must for any firm looking to host its clients’ data. Failing to invest in this area could be devastating.
Finally, it requires labor to manage all this. There are two types of labor associated with managing and supporting any review tool, information technology to manage the environment and litigation support to manage the review tool. In a hosted solution this labor is the burden of the provider and the benefits of that labor are available to the consumer. The vendor has served on hundreds or thousands of litigation matters and that experience is available for consulting on all types of challenges that may be new to the case team.
Information Technology to Manage the Environment
Whether outsourced to a local IT vendor or added to the responsibilities of your internal IT department, there is a significant cost in paying for the people to manage the secure environment required to keep these running. IT labor is specialized and expensive. No longer is it reasonable to expect the same person that manages your workstations to also manage your network. The demands on the infrastructure and the business need of keeping it healthy require dedicated resources even in the smallest of organizations.
Litigation Support Expertise and Labor
Litigation support labor is even more in demand and represents more of a niche in the overall labor market. No longer can one rely on the paralegal staff to handle these duties and their day jobs. The volume of data, ever decreasing lead times in which to conduct review and production, and the complexity of discovery requests means that you really need at least one top-notch litigation support analyst on the back-end to make everything run smoothly.
Although the direct costs of maintaining a legacy review tool are less expensive than a hosted solution, the true cost of ownership is made up of more than just simple licensing. Maintaining an in-house review tool is a significant investment, even for a desktop solution. In addition to licensing, there are storage and storage management concerns. You have to consider the cost of maintaining and monitoring a secure environment in which your clients’ sensitive business information will be stored. And you need to hire the staff to keep it all running. Legacy review tools may be inexpensive, but when comparing all the costs and potential soft costs associated with failures in storage, security, or labor, are they worth it?
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