The full cost impact of an electronic discovery (e-discovery) request for an organization is hard to estimate because of the multi-faceted cost points that underlie required in calculating the e-discovery cost structure. E-discovery is a cost center for a vast majority of companies meaning: E-discovery does not generate money for the business, but it is a cost of doing business. While the idea of not keeping information that is not legally mandated or generate revenue for the company, rarely rears it’s head in the e-discovery discussion, as most organizations tend to be reactive rather than proactive.

Nonetheless, the impact of e-discovery on business is difficult to quantify.  Companies should attempt to quantify the e-discovery costs today to determine the true costs. In performing this calculation, it is critical that companies factor in the people burden. Especially the indirect costs that result from the loss of business revenue or decreased job satisfaction. The costs can extend beyond the e-discovery fees for a particular case. Companies should recognize that diverting critical recourses and decreased job satisfaction impacts the overall bottom line.  Employees involved in the e-discovery production, review or analysis process in an as needed bases, will clearly limit the time and energy they can invest in their core duties.  In some cases, companies have implemented in-house e-discovery teams, but unfortunately more often than not the team is not provided with the necessary recourses to deliver real savings to the company.

Most solutions do not require a company to outlay millions of dollars. Most of the time, a solution hinges on a mixture of some good old fashion common sense on defining the approach a company takes to handling e-discovery factoring in the technology, business and legal needs of a company. .  A company that is able to establish internal policies and business processes with the requisite technologies can reap substantial cost savings – which I am sure you can request from one of the many e-discovery vendors.

Moreover, a company that can efficiently and effectively respond to e-discovery requests is minimizing the disruption to the business mission, which means that the focus will be on generating profits and not dealing with e-discovery issues. While e-discovery is becoming the cost of doing business, the amount it costs varies greatly on these and other factors.

Here, it is not necessary to get it 100 percent right the first time. It is key nonetheless to get the ball moving and iterate – learning from your mistakes and your peers.  The end result, perhaps not immediate, is that a company can lower the cost impact of unwelcome e-discovery requests and be assured that the focus is on making money.

Companies that are e-discovery prepared are rewarded. Why? E-discovery companies just like companies that charge two times the amount for a venue when they learn a couple needs it for their wedding, e-discovery and forensic firms charge substantial fees for a “rush job.”  In addition, prepared companies avoid the internal e-discovery learning cost curve.

Given the American legal mantra: the better you do in business, the more likely it is you get sued, and, the Code of Civil Procedure, modified to address e-discovery, it is more likely than not that a company doing business in California will face the e-discovery cost conundrum sometime in the near future – in state or federal court.

Companies that fail to face these e-discovery issues can incur substantial expenses to their company or, in the case of outside counsel, to their client. Adjoining the additional costs is the reality that counsel can potentially endanger a case, irrespective of the underlying merits, which is reflect at both the state and federal level.

Daniel B. Garrie, Esq. has a B.A. and M.A. in computer science and is an e-discovery neutral and special master with Alternative Resolution Centers, available internationally. He can be reached at (310) 284-8224 or (800) 347-4512 and at DGarrie@fsrdg.com.