3 Business Models for Law Firms Providing eDiscovery (Part 1)

Written By
Brandon Law
Brandon Law
Oasis_Why you must be able to talk eDiscovery Cuts - LONG V2 9_18_18_MASTER

Let’s start with something obvious: electronic discovery, and data security more broadly, have never been more important than now.

There is an increasing awareness that the data associated with litigation is particularly sensitive, and as technology begins to replace human effort in discovery, the demand for secure solutions is at an all-time high. And corporate legal departments are taking notice. An ever-increasing amount of the litigation budget is being allocated to discovery costs, driving even greater demand for scalable, cost-effective solutions.

In a nutshell, that’s what makes eDiscovery so valuable. Clients care about the who/what/when/how when it comes to data protection. Yet despite a healthy demand for eDiscovery services, many firms are hesitant to “get in the game.”

What should a firm do with this “problem” of eDiscovery? Broker a solution for the client and stay out of it? Or should they move to solve the challenges for the client? And if providing a solution is the right choice, how? Through vendors? By developing in-house resources?

In this article series, we’ll lay out three viable strategies for providing eDiscovery solutions for clients, but first…

Why is eDiscovery Such a Big Deal?

Because your clients care about their data! The fact is, organizations of every shape and size are wising up to the fact that data security isn’t a given. They’re becoming more and more concerned about privacy and cybersecurity than ever. Whether it’s the Panama Papers, Wikileaks, or the 40% of firms that didn’t know their data was breached in 2016, many clients have already heard horror stories about the perils of inadequate data security to their bottom line and reputation.

In other words, it’s common knowledge that high-profile law firms have had data breaches. Law firm data security isn’t a given. So be ready to address it. If eDiscovery is important to your clients, it should be important to you. If you go in there blowing it off like it's no big thing, and you're not prepared to talk about the details, it could signal that you’re a security risk.

It’s Time to Open a Dialogue About eDiscovery

Now here’s the rub: talking to clients, especially prospective clients, about eDiscovery can be distracting, boring, and even unpleasant. Sure, there are some folks who love this stuff, but many don’t. Many simply see eDiscovery as a line-item in a budget for “litigation”. But sometimes they do care, and it’s important to prepare for these conversations.


I’m certainly not suggesting that eDiscovery becomes the main value proposition for your firm; what I am saying is that eDiscovery will probably come up, and when it does, you better be ready to talk intelligently about it. Someone at the firm needs the ability to go toe-to-toe with the most paranoid CIO scrutinizing your security policies or a LegalOps manager dissecting your invoice.

eDiscovery Can Be a Huge Differentiator

The complexity, risk and expense associated with eDiscovery – the things that make it difficult – also create an opportunity for differentiation. Law firms, like any other business, compete for clients, and in a sea of sameness, differentiators are critical. In a world where marble lobbies and nice views from conference rooms are common, clients are hungry for substantial differentiation.

The fact is, despite eDiscovery being around for awhile now, it’s still a relative unknown for a lot of firms. Not everyone has mastered it, and therein lies a huge opportunity. When you can do eDiscovery well, it’s a big deal. You can go to market and win with it. Clients will love you for your working knowledge of data security and the ability to stick to a budget. You get the point: eDiscovery is a substantial differentiator.

What’s Stopping You From Mastering eDiscovery?

Despite the importance of eDiscovery to corporate legal teams, not many firms have mastered the art of eDiscovery. To them, eDiscovery is all risk and no reward. They assume that there is very little upside, so they just steer clear of the issue by offloading responsibility to vendors. But even ‘offloading to a vendor’ is a strategy, one that should be thought through carefully. (More on that later)

To be clear, and despite some well-publicized examples of firms making millions in their eDiscovery practice, revenue associated with discovery services isn’t going to move the needle for most firms… but that’s not the point.


The point is that eDiscovery can (1) help win new business and (2) deliver exceptional service to existing clients. Making money is rarely the primary objective when designing an eDiscovery solution, but it is very a realistic possibility. By the same token, losing money on eDiscovery isn’t a foregone conclusion – it’s possible to do well and profitably.

In the following articles, we’ll discuss three models – each with financial strategies for costing - that can actually contribute to your firm’s bottom line. We’ll review the pros and cons of each in depth, and suggest strategies to optimize each strategy.

Stay tuned for the next three posts in this series.

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3 Business Models for Law Firms Providing eDiscovery (Part 1)


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