At first, preparing an ediscovery project budget can seem intimidating and overwhelming. This is especially true if you’re sitting there staring at a blank piece of paper, trying to figure out where to start. Eventually, as you grow into your role as an ediscovery project manager, you will realize that the ediscovery project budget can be your tool to:
- measure efficiencies
- consider alternative technologies that could save you time and money
- establish metrics to use on future ediscovery budgets
When you are preparing your first ediscovery project budget, a best practice is to divide the budget into separate sections for each phase of your project:
- Collection phase
- Processing phase
- Review phase
- Production phase
This is helpful because your ediscovery project has several “projects” within the lifecycle of the overall project. According to the PMBOK® Guide—Fourth edition (PMI, 2008a, p. 434) the definition of a project is “a temporary endeavor undertaken to create a unique project, service or a result.” Further, a project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.
Given that definition, you can look at the collection phase as its own project. It has a defined beginning and end—the same for the other phases of your ediscovery project. This will also allow you to do a better post-project debrief to look at which phase (or section) of the budget worked and which ones didn’t.
This is also helpful because every ediscovery project is going to be different. In some cases, you might not have any involvement in the collection phase. In other cases, you might not have any involvement in the review and production phases. This way you can look at the overall budget as 4 separate budgets but within one master budget document.
Drafting the Ediscovery Project Budget
Step 1 – Know the Project Objective
You can’t prepare an ediscovery project budget until you know the objective of the project.
Objective = Scope
If you don’t know the project’s objective, then it won’t be easy to accurately estimate how much it will cost to achieve the objective. Scope is not simply to complete the production and deliver the production data to the other side.
Scope could look something like this:
- To locate all potentially responsive client documents for production to opposing counsel on or before (due date).
- To review those documents and remove potentially privileged material and non-responsive documents prior to the production on or before (due date).
- To redact or remove confidential information from the documents prior to production to opposing counsel.
- To provide opposing counsel with a privilege log identifying the privileged documents withheld from the production.
- To produce all relevant, responsive data to opposing counsel in ___ format as agreed upon at the Meet & Confer.
- To review and tag data produced from opposing counsel to us.
Step 2 – Choose an Estimation Method
Some of the ediscovery project budget’s initial drafting might have to start with rough estimates for things like volume, scope, and resources. It may also be based on assumptions, such as cooperation from opposing counsel and even cooperation from the client.
If you don’t have metrics from similar previous projects, your initial estimate might have to come from average industry metrics. While not optimal, it will at least give you a starting point, and you can further refine those numbers later.
This method of budget estimating is called Analogous Estimation. Using this estimating method, you rely on data, and best practices learned from previous ediscovery projects as a base for estimating this project.
Note: In the example used in the training video below, we are using industry averages as the starting point for drafting the ediscovery project budget.
Another option to consider is the Three-Point Estimation. With this budget estimation, you are getting a weighted average based on best, worst, and most likely scenarios.
The advantage of using this method is that it allows the project team to think about possible alternatives and outcomes from different perspectives. It also allows the ediscovery paralegal and the litigation team to give the client a range instead of one number. For example, the total budget estimate for the collection phase is $_____ to $______, depending on the best-case and worst-case scenarios.
The disadvantage to the Three-Point Estimation method is that it takes more time to prepare this budget than other budget estimations.
Step 3 – Choose an Estimation Tool
There are many project estimating tools available at an affordable price. The most affordable option is Microsoft Excel.
You can download a free Ediscovery Budget Tool here. Watch the video below for instructions on using the ediscovery project budget tool.
Some of the other budgeting software available for a charge includes Monday, Asana, Hubstaff, and Microsoft Project, to name just a few.
Ediscovery Boot Camp
Take your ediscovery project management to the next level with this online course that gives you a 50+ page written plan to develop your ediscovery standard operating procedures to make sure every ediscovery project is a success.
Video Tutorial on Using Excel to Plan a Budget
About the Author
Ann Pearson is the Founder of the Paralegal Boot Camp, specializing in training for paralegals that focuses on the important paralegal skills to become an indispensable member of the legal team.
Ann started her paralegal career as a litigation paralegal and then was a manager of paralegals for many years prior to starting the Paralegal Boot Camp in 2010. When she’s not working, you can usually find her somewhere near an ocean – either scuba diving, boating, cleaning up a beach, or volunteering to help save sea turtles.