Extract from Andrew Goodman’s article “Avoiding the Hidden Costs and Risks of Modern Managed Document Review”
Managed document review (MDR) still accounts for the largest portion of discovery costs, so there is a temptation to commoditize it like other aspects of discovery. Purchasers of MDR services should be wary of doing so, because with MDR, you truly get what you pay for. By focusing primarily on price and hourly rates, legal teams may fail to protect themselves against risks attendant with the lower quality that comes from a “race to the bottom.” They may also miss an opportunity to avoid the hidden costs resulting from such a decision.
It is becoming increasingly important to consider if and how generative artificial intelligence (GenAI) should be introduced to the mix and its potential cost impact vis-à-vis the perceived savings it might generate. As with technology-assisted review (TAR) and continuous active learning (CAL) before it, people may expect GenAI to be like a Staples Easy Button, but what are we seeing in practice?
MDR typically accounts for approximately 70% of discovery-related spend. The other 30% reflects the costs for data collection, processing and hosting and other discovery-related activities. These technology-related costs have been increasingly treated as commoditized, and at times even serve as a loss leader for technology firms that also offer a form of MDR and are hoping to convince end clients to opt for their end-to-end services.
