If you’ve been on more than a few legal technology websites, you’ve likely come across the term “Managed Services.” Everyone seems to offer them, and they usually come with enticing, yet vague claims about “simplifying discovery” and “end-to-end solutions.”
That’s all well and good, but how do you decide if your organization is the right candidate for a Managed Services approach towards eDiscovery? Will Managed Services actually help you run your business or law firm more efficiently, or will it result in paying for things you don’t need or already have? Those are the questions we’re here to answer.
What are eDiscovery Managed Services?
“Managed Services” is an industry term that refers to a comprehensive eDiscovery solution provided for a flat rate. The “services” in question can vary depending on the client’s needs, but the goal remains the same: make discovery more streamlined and predictable without compromising outcomes. Oftentimes, the services are some combination of data hosting, processing, project management, forensics, and eDiscovery. The exact services and price you pay depend on the deal you negotiate with your specific provider.
Who Needs Managed Services?
The typical Managed Services client usually comes from a field where complex investigations and litigation are fairly common, such as corporate law, financial law, and intellectual property. If you’re only involved with cases of this scale once in a blue moon, a pay-as-you-go model might make more sense. However, if such matters are business as usual for you, Managed Services is worth considering.
Another major factor to think about is your internal discovery capabilities. If you’re already able to handle the vast majority of your discovery internally, Managed Services might result in overspending. However, few organizations are able to achieve the same economy of scale that legal service providers do. It’s quite common for the optimal discovery program to be some mix of internal and external workflows. Sometimes, that means doing most of your discovery internally and calling in reinforcements if and when you need them. However, it could also mean a Managed Services plan where you pay for data hosting and access to advanced review software, but still rely on your internal team to manage projects.
Reasons Why Organizations Switch to Managed Services
Lower Legal Technology Costs
One all-too-common issue we run into with clients is that they hire a multitude of vendors yet end up with the same results that fewer vendors could have accomplished for less money. Almost any legal service provider will offer you better pricing the more services you buy from them. It’s like the difference between buying a meal combo from one restaurant vs. buying your burger, fries, and drink from three separate places.
In addition to lower prices from bundling services together, limiting how many vendors you work with usually lets you make more use of what you are paying for. Hours spent briefing newcomers about a matter are just as billable as the hours that a longstanding partner spends actually solving problems. Even if you have a few trusted vendors who know your team fairly well, it can still be inefficient if they’re working with you for a month, then not talking to you for six months, then coming back again. A Managed Services model means your team and your service provider stay in regular contact, and when workloads suddenly grow, you don’t have to spend a lot of time (and money!) helping vendors play catch up.
One of the primary motivators to adopt a Managed Services model is predictability. Law firms and corporations that are routinely spending large amounts on outside vendors benefit from knowing exactly how much this line item will be every month. In a pay-as-you-go scenario, you’re rolling the dice every month. Sure, maybe you’ll hit the jackpot and spend next to nothing on discovery because you are not very active, or the matters you do have don’t require a lot of document productions. On the flip side, discovery costs can spike in the blink of an eye because the workload suddenly demands it. Sometimes when it rains, it pours.
Managed Services is like taking out an insurance policy that protects you from those kinds of spikes. Now, this may still be wasteful if you have a lot of those jackpot months, or if your internal discovery program is robust enough to handle most matters. However, if you have any ambition to scale in the near future, the predictability of a Managed Services model can be liberating. It empowers law firms and corporations to take on new matters without stressing about how they’ll handle discovery.
Oftentimes, a company’s legal spending is seen as a necessary evil, but it can also help you get an edge over your competition. In the case of a law firm, it’s easier to win new clients if you’re not passing exorbitant discovery costs on to this client. Oftentimes, firms with a Managed Services plan can price themselves lower than they would have otherwise without it affecting their bottom line.
For in-house legal teams, a Managed Services model can be the difference between winning a lawsuit, and paying out settlements just because “discovery is too expensive.” Managed Services can help you mitigate matters early for relatively low costs since you’re already paying for the help. On the other hand, a pay-as-you-go model might result in neglecting matters until they’re mission critical simply because you don’t have the internal capabilities to be proactive. If you only seek outside help when litigation is on the horizon, that vendor can exploit your lack of options and costs can spin out of control.
Consolidating vendors usually means minimizing risk. Every time you rope a new vendor into your network, you’re increasing the number of people who could inadvertently mishandle sensitive information. A good rule of thumb for any business or law firm is to keep information on a need-to-know basis. Organizations who are using a single provider for the bulk of their legal services are almost always going to have a shorter list of “need-to-know” people than an organization who’s sending data to new vendors every other month.
If you pay for Netflix, you’ve likely watched at least one movie that you wouldn’t have cared enough to see in theaters or rent on its own. Likewise, many Managed Services models bundle the services you know you need with services you never would’ve thought to buy separately, but are still nice to have.
For example, many clients reach out to legal technology companies because they need help hosting data. They may do this after an investigation is already underway, and it becomes clear that the volume of data is too large to handle internally. However, if they had already been paying for Managed Services the whole time, they could’ve also had help with automating legal holds and preserving that data before the investigation, all at no additional cost.
Ultimately, Managed Services isn’t for everyone. Whether or not it’s right for you can depend on a number of variables such as the size of your organization, frequency of litigation, internal capabilities, and need for scalability.
Still have questions? We’re happy to help!
Reach out today to find out if Managed Services is right for your organization.
(If it isn’t, we’ll design a custom solution that is.)