Fixed rate or variable? The analysis is not exclusively for mortgages. Gina Passarella in “Firms Beginning to Take Flat-Fee Model to E-Discovery,” published in LTN’s sister publication, The Legal Intelligencer, reports that firms are starting to move away from pay-per-use models of e-discovery services and instead are negotiating flat rates.
It can be risky for the service providers and the firms, said Passarella, as contract prices are based on estimates of the amount of data a firm expects to handle in a given amount of time. She reports that one firm, Buchanan Ingersoll & Rooney recently made the switch, and has already found they’ve saved thousands of dollars, simply with the new access to technology that wasn’t previously available to them or their clients.
To transition to flat rates, the firm relied on data collected through their project management system over the past 2-1/2 years, which gave them a good idea of the amount of information clients were putting through the e-discovery processes, said Passarella. A recent survey suggests 40 percent of large law firms are looking to transition to a managed services model, many of which offers services on flat-fees or a contractual basis.
However, not all in law firm IT are supportive of this new model. Passarella interviewed Pepper Hamilton’s directory of discovery services, who supports managing e-discovery internally. “When it comes to the flat-fee model, Lichter said there was a risk on both sides of the transaction, with a potential windfall for one of the parties,” as well as questions about how the cost would then be passed onto clients, she reported.
Attorney Marlisse Silver Sweeney is a freelance writer based in Vancouver. Twitter: @MarlisseSS.
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