Project management fees in eDiscovery or how my $25.95 rib eye steak ended up costing me $42.95!
Posted On: Tuesday, May 23, 2023
You go to your friendly neighborhood restaurant and order a $25.95 steak. The check comes and it shows the steak was $42.95. The waiter explains that the bill includes $17 worth of project management fees. When you press further, you are told that someone has to take the order to the kitchen and explain that you want your steak medium rare. Then there is the salary for the chef who prepared the steak. Not to mention the cost for the employees who loaded your dishes into the dishwasher, brought you your food, and printed out your check. Turns out there is an asterisk on the menu indicating that additional costs may be charged. While people would never tolerate this practice in a restaurant, they routinely tolerate it from eDiscovery vendors.
As the pressure to reduce the price per gigabyte for hosting has intensified, many vendors have resorted to keeping hosting prices low by charging project management fees any time you ask for support or assistance. This allows the vendor to show a low estimated cost on its proposal but still hit its revenue targets. Many clients who have come to us from other vendors report being shocked when they received invoices that were far larger than what they expected. They were invoiced for copying data from a hard drive to the vendors servers, for training on how to use the tool, for the response to an email asking for an update on the status of the data loading, and for simple follow-up questions such as how to run a particular search or how to locate specific documents. These were all surprise charges resulting in unexpected costs that then had to be explained to their client.
One of our clients took over a large case from another firm that was being hosted in Relativity. They asked us for a proposal to host the case in our instance of Relativity and then reported that our per GB charges were higher than those of the original vendor. When we asked them to look at the invoices and see what they were paying for project management fees, they realized that their client would be saving over $1,000 per month with our proposal. And this is not a one-time occurrence. Time and again, we have clients tell us about invoices from our competitors that were far higher than expected due to project management charges and other unanticipated fees.
We don’t believe you should be charged project management fees for the basic tasks that are needed to use a review tool. We are providing a document review platform and part of that service is to provide what you need to use the platform effectively. We do not charge for initial user training. Nor do we charge for setting up your review, supporting users as they conduct the review, or answering questions as clients work with the documents to prepare their case. We are helping our clients succeed and that includes making sure they are comfortable with the tool and that they feel like our Project Managers are a resource to them, not a costly add-on. We are not a transactional company. We want to build relationships with our clients so that they will come to us with their future cases.
Next time you are looking at a potential service provider, one of the questions you should ask is “Do you charge Project Management Fees?” If so, get the details about when and how these charges occur. This will help you fairly evaluate proposals. Any restaurant that did not provide clear prices wouldn’t stay in business long, so why allow your eDiscovery vendors to take advantage of you and your clients.