B&L Associates

Realizing the need for new pricing models in eDiscovery

September 16, 2011

The per-gigabyte pricing model has been attached to eDiscovery since its inception, but as technological innovations in the legal field evolve, it may be time to find new models for valuing discovery services.

The amount of electronically stored information managed by companies doubles every 18 to 24 months, according to Forbes. The exponential growth of data, mixed with volume-based eDiscovery pricing models, is putting a serious strain on IT budgets. However, the assumption that the volume of information processed is directly correlated to the benefits derived by a client may be fundamentally misguided.

"As the eDiscovery market matures from a model that relies on service providers and law firms to perform the data processing to a model that enables the user to license software and process its own data, pricing will evolve to some type of annual fee model that more closely equates to the value," predicted industry expert Charles Skamser, according to the source.

According to the latest electronic discovery survey from Socha-Gelman, eDiscovery could cost U.S. businesses more than $3.5 billion by the end of the year. The shift to a more realistic, value-based pricing model in the coming months and years may inspire additional investments from companies.