Lawyers are not paid to be bean counters or number crunchers, but the truth is that our clients are business people, and they are required to predict, track, adjust and be held accountable for budgets in all of their work projects. It should therefore come as no surprise that those business people have the same expectation of their law firms to which they pay thousands and sometimes millions of dollars for legal services. It is entirely understandable, and totally fair and reasonable, for law firm clients to expect and demand a budget that reflects accurately the anticipated costs in light of whatever information is available at the point at which the budget is being generated. That budget should be flexible and created in a way that allows it to be adjusted as time passes and more information surfaces.
You know you’re going to have to get the 10 employees’ information from the client’s systems to yours (or your vendors), so you should find out how your collection vendor charges for their services. Does it charge per custodian? Per hour? Per the volume data? Once you find that out you’ll be in a position to form an assumption about the cost per custodian and plug that into your budget. That cost doesn’t necessarily have to be exact, but it does have to be clear so that your buyer will understand what drives their cost. For this exercise we’ll hypothesize that the vendor will charge $500 per custodian, meaning the total collection charge for Phase One of the budgeting process is $5,000.
The sum of the first four steps is $73,400, but the step of actually reviewing the documents through the use of review software is usually where the big ticket spend comes. In our experience, 85 to 90 percent of discovery costs are reflected in review time, so it’s extremely important that the person creating a budget understands all of the things that go into this cost.