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Avoiding Redundant Project-Management Costs in Electronic-Discovery Projects

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Ed. note 9/1/2011: A slightly revised, edited, and formatted PDF version of this article is now available from the Project Management Institute's (PMI) Knowledge Shelf. It is available free to all PMI members, who can download it here: https://www.pmi.org/en/Knowledge-Center/Knowledge-Shelf/~/media/Members/Knowledge%20Shelf/Easton_2011%20(3).ashx



Legal Project Management, a phrase rarely heard even a couple years ago, has become the legal community's latest buzz word. The economic recession has led to corporate clients demanding greater predictability in, and more value from, their legal spend. Project management has become a crucial competency for law firms who are now scrambling to acquire the expertise and tools necessary to compete in this new environment. 

E-discovery projects are well suited for project-management initiatives as they benefit from access to better tools for estimating, measuring, and monitoring work than are available to other areas of legal practice. Often, however, the benefits of e-discovery project management are not fully realized or come at a higher cost than necessary due to redundancies in project-management resources and work within and among the corporate legal departments, law firms, and litigation-support vendors involved with a matter. In this article I'll briefly introduce the role and cost of project management in e-discovery and provide seven tips for decreasing project-management redundancy and, therefore, costs.


Project Management's Role in Electronic Discovery

Although all aspects of legal practice can benefit from the application of project-management best practices, e-discovery is often targeted as the first area to roll out new project-management tools and processes. This makes good sense. E-discovery accounts for a significant amount of a corporation's legal spend with document review alone representing well over half of a typical litigation's cost.[1] Also, because it is the area of legal practice most steeped in information technology, those working in this field often have more experience with, and appreciation of, project management. Therefore, it is not surprising that the e-discovery industry has been proactive in promoting project management.

One standard definition of a "project" is "a temporary endeavor undertaken to create a unique product, service, or result" (emphasis mine).[2] Managing projects presents different challenges than managing ongoing operations. Because projects are temporary and unique, they do not enjoy the efficiencies of repetitive processes that follow existing procedures. Most e-discovery work is highly projectized, even if certain, discrete processes are fairly standardized. E-discovery requirements and processes will differ from matter to matter. Custodians, collection and processing requirements, project team members, and review technologies and strategies may all vary based upon the nature of the litigation or investigation.  Project management methodologies provide tools for effectively documenting and managing these variables. 


The Cost of Project Management

Whether or not you have a formal project-management system in place, someone is managing your e-discovery work. If you have not planned for project management, it is likely that a number of redundant somebodies are inefficiently managing your projects.  Determining the true cost of project management on e-discovery projects, and how much of that cost is necessary, is difficult.

It is common for vendors to charge a flat rate of around 10% of the total charged for collection, processing, hosting, production, and other fees. This closely parallels the cost of project management in other industries. Research spanning numerous industries has shown that project management generally accounts for 6-11% of project costs.[3] Although the project-management fees charged by service providers are already significant,[4] the project-management costs that appear as line items on a vendor invoice are not the whole story.

Because e-discovery project teams are often split among several entities with varying levels of project-management maturity, many project-management costs remain hidden. Consider a typical scenario where you have a corporation, a law firm, and a litigation-support vendor. Each of these will have one or more people performing project-management functions and systems to support these functions. Since these systems are typically not integrated, information has to be sent back and forth among the various project team members and that information will have to be managed. The typical e-discovery project, therefore, creates much inefficiency.

My experience managing numerous e-discovery projects of various sizes and complexity has taught me a few important lessons that I've condensed into seven principles to reduce project-management overhead. The following principles will help you reduce redundant project-management and lower the cost of managing your e-discovery projects.

1. Assign one project manager responsible for, and empowered to run, the project.

Those of us in the e-discovery industry frequently bandy about the concept of a "single point of contact" (SPOC).  It is a good idea. With a SPOC you always know who to call to get or give information and instructions about the project. Unfortunately, the SPOC is too often not empowered with the authority needed to truly direct the project. Joking about having "a single throat to choke" isn't funny when the SPOC is held responsible, but holds no real authority. That's called a scape goat.

This important principle is highlighted in The Sedona Conference Commentary on Achieving Quality in the E-Discovery Process. In discussing the importance of leadership in managing e-discovery projects, the Sedona Conference clearly identifies the need of a single, identified leader to oversee all the moving parts of the discovery process:

An almost universal key to the success of any project is the appointment of a project leader, whose responsibility is to: "Lead the team in figuring out what the project is (planning, scheduling, and requirements gathering), shepherding the project through design and development work (communication, decision making, and mid-game strategy), and driving the project through to completion (leadership, crisis management, and end-game strategy)."[5]

You may have different project managers assigned for various phases of the project, but ultimately they must report to someone responsible for overseeing the entire project. This is not to discount the importance of a team or "group of peers" approach.[6] Leadership requires the ability to work within a team, but in my experience a project is more likely to succeed when someone is given ownership of it and is vested with the authority necessary to run it. Determining the best resource to delegate project-management responsibilities to is an important decision that corporate clients should not entirely abdicate to outside counsel. Often an in-house resource or third-party consultant will provide more expertise at cost-effectively managing the corporation's e-discovery projects, or certain phases of the projects.

2. Clearly state your expectations regarding project management.

To help ensure a successful project, it is not enough to delineate the scope of the project and assign a project manager. You must also convey to all service providers your expectations on how the project is to be managed. All members of the project team should know who the lead project manager responsible for, and authorized to run, the project is; how they are to communicate project information; and what tools they will use to collaborate with each other.

You should also endeavor to understand the management costs on your project and ensure you and your service providers agree on how they will bill you for project-management services. While a flat rate for project management may bring some predictability to your costs, what exactly does it cover? Different vendors mean different things by project management.  Make sure you understand what activities are covered by the project-management fees and that they meet your requirements.

3. Do not create unnecessary complexity.

Although insufficient project management is a common problem, over managing a project is also a risk. So, how much project management do you need? While greater project-management overhead is expected for larger projects, where complexity and risk are proportionately greater, in small projects you should endeavor to keep the level of project-management cost to a minimum. Small projects are at a greater risk of being over-managed than large projects, with project-management costs disproportionate to the value of the case.

Because project-management roles are often ill-defined in small projects, small-project managers may find it difficult to strictly adhere to their project-management roles. To justify a resource working strictly in a project-management role, many organizations will assign multiple small projects to a single project manager. The apparent efficiency in this approach is often illusory, however, as the number of details can overwhelm the project manager and lead to oversights that impair one or more of the projects.

Having a person assigned to manage a single project does not mean that project management must be that person's sole activity on the project. Some research has shown that for small projects it is generally more cost effective to have the project manager take on other responsibilities in addition to project-management duties.[7] For example, an e-discovery project manager may also administer the document review database and provide technical training to the reviewers. Or an attorney assigned the role of project manager may also take on legal research, client management, quality assurance, or even document review responsibilities.

Although over management is a problem more readily apparent in small projects, just because a matter is large and complex doesn't mean the project management has to be complicated. Processing and reviewing 100 gigabytes of data does not necessarily require ten times the management overhead of 10 gigabytes.  You may want to negotiate for a lower project-management fee for larger projects. Ten percent is acceptable for smaller projects, but is harder to defend for projects with processing and review fees in the high six or seven digits. In most industries, the percentage of overall project revenues represented by project management decreases the larger the project is.[8] There is no reason why e-discovery projects should be any different.

That said, good project management will result in savings throughout an e-discovery project's life cycle, especially for large, complex projects. If you are a vendor, it behooves you to articulate the value of your project-management services. A smart client should have no problem paying reasonable, well-articulated, project-management fees.

4. Have a communication plan.

Project management mostly involves communication.  Therefore, perhaps the most important aspect of project planning is developing a communication-management plan. It needn't be complicated, yet even on the smallest projects you should take a moment to determine who is involved and impacted by the project, how strong of an influence they have over it, what information each needs, who will communicate that information, and how frequently and by what method they'll communicate it. For larger, more complicated matters you may want to also determine a process for escalating issues up the management chain, guidelines for meetings, and even procedures for managing changes made to the communications plan.

An important and often overlooked aspect of communication planning is the importance of limiting the number of communication paths. Each additional person communicating with a group exponentially increases the volume of communication and the time needed to process that communication. A communication plan does not need to, and should not, include every possible project stakeholder.  An overly complicated communication plan is not much better than having no plan at all. A communication plan is as much about limiting communication as it is determining how to communicate.

5. Streamline your reporting.

Those fancy reports you generate, or which you receive from service providers, come at a cost. Avoid over-reporting by thinking about what information your project's stakeholders really need and how to most effectively present that information. Then document the reporting requirements in the project's communication plan.

Use tools that automate as much of the reporting as possible. Even with standardized templates, running searches and tallies, and building and maintaining spreadsheets, takes time. Many modern e-discovery tools come with reporting features that will quickly provide you with the most commonly requested metrics. Simply selecting the right reporting tools can shave hours a day off your project-management time.

6. Use an e-discovery project-management system.

As pointed out above, selecting the right tools can significantly improve your project's efficiency. Most e-discovery tools, however, only address small pieces of the project-management puzzle. Organizations dealing with high volumes of e-discovery may want to look at higher-level tools that will help them more efficiently manage their e-discovery program. By managing e-discovery projects in a coordinated way, you can achieve a number of benefits not obtainable by managing each project on an ad hoc basis:

  • You can identify, document, standardize, and optimize processes common to all or most of your e-discovery projects.

  • You can more easily enforce your organization's e-discovery policies and procedures.

  • You can build, centralize, and monitor adoption of organizational process assets such as approved vendor lists, lists of subject-matter experts, data maps, legal hold notices, and lessons learned.

  • You can more easily track cost and time expenditures for your entire e-discovery program.

While you can use general project-management tools, such as Microsoft Project, to manage your e-discovery projects, a dedicated e-discovery project-management system may better meet your needs and require fewer configurations and less end-user training.  There are a number of excellent products on the market now that can help you manage your e-discovery projects. Exterro and PSS Atlas are the two major players in this space, with platforms spanning a large swath of the Electronic Discovery Reference Model. These tools are typically deployed by corporations. Tools like iFramework and Caselawg are designed to help law firm litigation-support departments manage e-discovery projects for multiple clients.   Also, e-discovery tools, especially document review platforms, are increasingly adding project-management features, but they generally do not offer end-to-end management of e-discovery projects. A list of the more common legal-project-management applications is available on my Legal Project Management blog, here: http://legalprojectmanagement.info/legal-project-management-applications.html.

7. Select service providers that understand project management.

Because the cost of project management decreases as an organization's project-management maturity increases,[9] perhaps the most important way to control e-discovery costs is to consider project-management maturity when vetting your e-discovery service providers, whether they be outside counsel, litigation-support vendors, or legal-staffing companies. Determining a service provider's project-management maturity is difficult. Even when you have a history of working with a service provider, so much goes on behind the scenes that determining whether a provider is managing your work efficiently is not easy. Of course the challenge is much greater with service providers you have never worked with before.

Increasingly, law firms and litigation-support vendors are jumping on the project-management bandwagon, but you have to look behind the marketing curtain and get to know who is operating the levers. When conducting your due diligence on potential providers, you should inquire into their project-management systems and talent.  Are their project-management methodologies a good fit with yours? Are they flexible enough to meet your communication, schedule, and budget requirements? Ask for information on the project managers who would manage your projects and scrutinize their training and experience.

One way to improve your ability to evaluate the project-management credentials of a service provider is to increase your own team's capabilities. Investing in project-management training not only helps you increase your organization's effectiveness it also increases your ability to determine whether a service provider is one with which you can work well.

Project Management is more than fancy reports and on-line collaboration tools. Effective project management also requires a team attitude. If you are not working well with your service providers, your project risks blowing deadlines and your budget. When everyone on the team understands and values project management, the project will run smoothly, with less time and money wasted on redundant or non-productive activities that do not move the project forward. Keeping these seven tips in mind will help you put together such a team. 





[1] See, e.g. KPMG Forensic, A Revolution in E-Discovery: The Persuasive Economics of the Document Analytic Approach 14 (2005), available at http://www.reedsmith.com/_functions/download.cfm?use_id=0&fde_id=904; Pre-production privilege review alone can account for 5% to as high as 50% of litigation costs, see Fulbright & Jaworski LLP, Fourth Annual Litigation Trends Survey Findings 24 (2007).

[2] Project Management Institute, A Guide to the Project Management Body of Knowledge 6 (4th ed. 2008), available at http://www.pmi.org/PMBOK-Guide-and-Standards/Standards-Library-of-PMI-Global-Standards-Projects.aspx.

[3] John Byrne, Project Management, How Much is Enough?, PM Network, Feb. 1999, at 49, available at http://marketplace.pmi.org/Pages/ProductDetail.aspx?GMProduct=00100342900&iss=1 (looking at capital improvement projects in the industrial sector and finding "that the combined project management costs for all phases of a project total somewhere between 7-11 percent of the project's [total installed costs]. If project controls is added, project management costs will be in the 9-15 percent range); C. William Ibbs, Benchmarking Project Management Organizations, PM Network, Feb. 1998, at 49, available at http://marketplace.pmi.org/Pages/ProductDetail.aspx?GMProduct=00100356000&iss=1 (finding that project-management services cost on average about six percent of a project's total revenues, based on an evaluation of 39 companies, including engineering-construction, information management and movement, and information systems companies); George E. Heywood, Project Controls: How Much is Enough?, PM Network, Nov. 1996, at 40, available at http://marketplace.pmi.org/Pages/ProductDetail.aspx?GMProduct=00100356000&iss=1 (showing that project control costs account for two to five percent of a project's costs, with it accounting for a lower percentage for large projects than for small projects); Michael D'Alessandro, Project Management Essentials, Seattle Daily Journal of Commerce, Nov. 18, 1999, available at http://www.djc.com/special/design99/10060810.htm (stating that project management generally accounts for 10% the cost of small to medium architecture and engineering projects).

[4] See e.g., EDRM Evergreen Review: Selecting a Service Provider, Electronic Discovery Reference Model,  http://edrm.net/wiki2/index.php/EDRM_Evergreen/Review/Selecting_a_Service_Provider#Project_Management_Fees (last updated Jan. 30, 2008)( warning that project-management fees charged by document-review service providers may be "extreme" and suggesting the negotiation of a monthly flat fee).

[5] The Sedona Conference, Commentary on Achieving Quality in the E-Discovery Process 2 n. 26 (2009) (citing Scott Berkun, The Art Of Project Management 8 (2005)), available at http://www.thesedonaconference.org/dltForm?did=Achieving_Quality.pdf; see also Paul C. Easton, Sedona Conference Highlights Project Management as Key to Quality, Legal Project Management (Jun. 25, 2009, 10:25 AM), http://legalprojectmanagement.info/2009/06/sedona-conference-highlights-project-management-as-key-to-quality.html.

[6] See e.g., the EDRM Project Management Framework, EDRM Evergreen/Project Management, at http://edrm.net/wiki2/index.php/EDRM_Evergreen/Project_Management (last updated Feb. 1, 2008).

[7] Byrne, supra note 3.

[8] Id.; Heywood, supra note 3.

[9] C. William Ibbs & Justin Reginato, Can Good Project Management Actually Cost Less?, in Proceedings of the Project Management Institute Annual Seminars & Symposium (2002), available at http://marketplace.pmi.org/Pages/ProductDetail.aspx?GMProduct=00100495100&iss=1.

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This page contains a single entry by Paul C. Easton published on October 4, 2010 10:00 PM.

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