Build More Accurate Document Review Budgets and Timelines with Metrics

If you can’t measure it, you can’t manage it.

Reducing management guru Peter Drucker’s insights down to a pithy quote like this one may not do justice to the depth of his insight into business and management. After all, the guy wrote over 30 books on business and management, was published in the Wall Street Journal, Harvard Business Review, and the Economist, and taught some places you might have heard of: NYU, Claremont, and Harvard.

But love them or hate them, short maxims like that one have become engrained in business culture because they say something true. For e-discovery professionals, the way to ensure repeatability, defensibility, and efficiency of your e-discovery process is to treat it as a business process. And that means identifying metrics, tracking them, and managing with the goal of optimizing them. 

If you’re in the field, you know that the most expensive part of litigation is the discovery process, and in turn, the most important part of discovery is document review. Since the RAND Corporation’s seminal 2012 study on e-discovery costs, Where the Money Goes, pegged document review as the major cost component of most cases, at 73% of e-discovery budgets, most studies have returned similar results. 

Therefore, it stands to reason that reducing review costs is the key to reducing e-discovery spend. And today, more than ever, controlling legal costs is on legal leaders’ minds. In the 2023 ACC Chief Legal Officers Survey, our recent report polling almost 900 CLOs and general counsel, identified legal operations, right-sourcing legal services, and cost minimization as legal departments’ top three strategic priorities for the year. In this article, we’ll look at some metrics you can use before you start your document review projects to make more accurate projections about budget and timeline.

There aren’t many situations where the relationship between time and money is as clear as in a document review project. Document review attorneys are paid an hourly rate for their services, plus a markup for overhead and profit if sourced through a law firm or legal services provider (LSP). The sophistication of the coding scheme and need for redactions will affect how fast reviewers make their way through the documents needed for review, but ultimately the number of documents requiring review correlates closely to the overall cost of document review. Therefore, the best way to reduce project budgets is to cull duplicative and irrelevant documents from the material handed over for review.

Here are three metrics you should start to track before you kick off your document review projects.

1. Data Volume: For each document review project, note the total volume of data identified as potentially relevant. Also track the number of custodians and the time frame for which data is preserved. Over multiple projects, you will want to calculate the average data volume per custodian per month to help you accurately estimate project timelines and budgets.
2. Number of Documents: One gigabyte of data can contain a wide range of documents, from 2,500 to 15,000 or more, depending on file types. For example, one GB could contain 600,000 pages of text, 100,000 pages of email, or 65,000 pages of Microsoft Word documents. Your documents per GB may vary, but you can start to refine your understanding of a “typical matter” by calculating this number and applying it as a rule of thumb to future projects.
3. Number of Documents After Deduplication: Basic document culling by deduplicating (removing identical documents and emails in multiple or even one custodian’s possession) can often eliminate up to 40% of the documents in a review project. Track your ratio for better precision in project timeline and budget estimates.

By tracking all of these metrics, as well as how they translate into project timelines and budgets, you can quickly estimate how long a review project might take and what it may cost very early in the process. 

Total amount of documents ÷ Documents reviewed per hour x Hourly rate = Cost of document review project

• Divide the estimated amount of documents by documents reviewed per hour to calculate person-hours needed for a project.
• Multiple person-hours by the hourly rate you pay review attorneys for a budget estimate.
• Divide total person-hours by the number of review attorneys on your team for an estimated timeline for your first pass review.

If the cost of document review is disproportionate to the amount at stake in the case, you may want to settle for purely economic reasons!