If you read that post from AccessData, and follow the links, I think you’ll see a pretty good case for why a per-gig pricing model is problematic, but the one thing you won’t see is what we should be charging instead.
Speaking from my own viewpoint of an internal Lit Support provider to a law firm, I can see the real problems with both the billable hour practice, and the per-gig, or disbursement, practice.
For billable hour approaches, you really don’t recoup the proper cost of handling large amounts of data. Because much of the work is done by the machine, I can only charge the time it takes me to setup the project, QC the end results, etc. That time doesn’t vary much whether we’re handling a 1GB collection or a 25GB collection, but the time that machines are in use, and unavailable, sure does! (I won’t even get into the difficulty in getting clients to pay for billable hours for non-attorneys, or getting attorneys to leave that “time” on the bill, which is quite a significant issue, worthy of it’s own post really)
So, we switch to a model that accounts for the fact that large collections take more time, and work, to deal with. But, one that also comes with it’s own problems. Strict disbursement pricing does not provide an incentive to do things efficiently the way that billable hours does. Simply put, in a billable hour scenario, you, as the client, have an incentive to collect completely and efficiently. Doing it once limits the amount of time the Lit Support professional can bill. With a disbursement model, you get charged the per-gig price, sometimes regardless of whether that 10GB collection comes in all at once, or 25MB at a time. Obviously, having to deal with small amounts of data, over and over again, is much more work for the Lit Support folks, but there’s no price incentive that would encourage clients and case teams to not behave like this.
Neither one really provides value for the client, and neither one really provides an incentive to be complete, and yet efficient. So, what does? Who is going to come up with a truly innovative way to bill for handling of ediscovery data, that accounts for the increasing amounts of data, and also stays within the ideas of proportionality?
It’s easy to say that something is “dead”, it’s much harder to come up with what will replace it. The billable hour is a good example. It’s been “dead” for years, yet it still hanging around, only partially being replaced. How long will per-gig pricing be “dead” before we come up with a replacement?