Extract from Epiq’s article “eDiscovery Cost Recovery: Market Intel and Assessment for Small and Mid-Sized Law Firms”
Cost recovery is the process of law firms apportioning technology and other costs back to their clients. As the creator and leader of eDiscovery managed services, Epiq has gained deep insights into how law firms approach eDiscovery cost recovery. We’ve seen cost recovery grow as a practice for well over a decade, with some firms trying to break even and others turning it into a profit center. Earlier this year we provided insights on cost recovery based on processes we support within large law firms. In this update, we focus on eDiscovery cost recovery adoption we support within small and mid-sized firms.
Cost Recovery Adoption Drivers for Small and Mid-Sized Law Firms
In our work with small and mid-sized law firms, we have observed the following drivers that impact whether a firm executes a cost-recovery model for eDiscovery technology:
- Geographic markets
- Litigation specialties
- Client types
- Regulations, rules, and law
Geography can play a role in cost recovery practice, but mostly due to its impact on law firm size.
For larger firms in U.S. East Coast markets and in large cities such as Los Angeles, Toronto, and Chicago, cost recovery is the expected norm and firms usually pass technology costs on to their clients. For smaller firms in these same markets, we see some instances of cost recovery, but it is not the norm. In other geographies such as the U.S. Midwest and South and Western Canada, we rarely talk to small and mid-sized firms who are engaging in cost recovery prior to working with Epiq. These small and mid-sized firms are either bearing the associated costs or looking for vendors to pass costs directly to the clients.
