Those old enough to have watched TV in the early eighties will undoubtedly remember the FRAM oil slogan where the mechanic utters his iconic catchphrase: “You can pay me now, or pay me later.” The gist of the vintage ad was that the customer could either pay a small sum now for the replacement of oil filter, or a far greater sum later for the replacement of the car’s entire engine.
This choice between two unpleasant alternatives is sometimes called a Morton’s Fork (but typically only when both choices are equal in difficulty). The saying (not to be confused with the equally colorful Hobson’s Choice) apparently originated with the collection of taxes by John Morton (the Archbishop of Canterbury) in the late 15th century. Morton was apparently fond of saying that a man living modestly must be saving money and could therefore afford to pay taxes, whereas if he was living extravagantly then he was obviously rich and could still afford them.[i]
This “pay me now/pay me later” scenario perplexes many of today’s organizations as they try to effectively govern (i.e., understand, discover and retain) electronically stored information (ESI). The challenge is similar to the oil filter conundrum, in that companies can often make rather modest up-front retention/deletion decisions that help prevent monumental, downstream eDiscovery charges.
This exponential gap has been illustrated recently by a number of surveys contrasting the cost of storage with the cost of conducting basic eDiscovery tasks (such as preservation, collection, processing, review and production). In a recent AIIM webcast it was noted that “it costs about 20¢/day to buy 1GB of storage, but it costs around $3,500 to review that same gigabyte of storage.” And, it turns out that the $3,500 review estimate (which sounds prohibitively expensive, particularly at scale) may actually be on the conservative side. While the review phase is roughly 70 percent of the total eDiscovery costs – there is the other 30% that includes upstream costs for preservation, collection and processing.
Similarly, in a recent Enterprise Strategy Group (ESG) paper the authors noted that eDiscovery costs range anywhere from $5,000 to $30,000 per gigabyte, citing the Minnesota Journal of Law, Science & Technology. This $30,000 figure is also roughly in line with other per-gigabyte eDiscovery costs, according to a recent survey by the RAND Corporation. In an article entitled “Where the Money Goes — Understanding Litigant Expenditures for Producing Electronic Discovery” authors Nicholas M. Pace and Laura Zakaras conducted an extensive analysis and concluded that “… the total costs per gigabyte reviewed were generally around $18,000, with the first and third quartiles in the 35 cases with complete information at $12,000 and $30,000, respectively.”
Given these range of estimates, the $18,000 per gigabyte metric is probably a good midpoint figure that advocates of information governance can use to contrast with the exponentially lower baseline costs of buying and maintaining storage. It is this stark (and startling) gap between pure information costs and the expenses of eDiscovery that shows how important it is to calculate latent “information risk.” If you also add in the risks for sanctions due to spoliation, the true (albeit still murky) information risk portrait comes into focus. It is this calculation that is missing when legal goes to bat to argue about the necessity of information governance solutions, particularly when faced with the host of typical objections (“storage is cheap” … “keep everything” … “there’s no ROI for proactive information governance programs”).
The good news is that as the eDiscovery market continues to evolve, practitioners (legal and IT alike) will come to a better and more holistic understanding of the latent information risk costs that the unchecked proliferation of data causes. It will be this increased level of transparency that permits the budding information governance trend to become a dominant umbrella concept that unites Legal and IT.
[i] Insert your own current political joke here…