Controlling the Cost of Litigation for Your Clients: Part 1 -
"Prepare Documents for Review"
Still not sure about the value of databases?
Then try this simple exercise - steps to a better way.
Assume that your client has ten boxes of documents that are to be given to you for a case that you are handling. An average box holds 2,500 pages. An average document has four pages. Therefore you have 25,000 pages, which is 6,250 documents.
Traditional Paper Method
Physically bates number and make a copy of the documents for your law firm. This is your master set. Now make a second copy to use as a working copy. Assume these documents are average litigation documents so that the cost is $0.06 to $0.07 for bates numbers and $0.12 to $0.15 per page for copies. Use the lower end of the typical price range. Two copies will cost your client $0.30 per page. The cost of bates numbering and making the copies will be $7,500.00.
Now that you have spent $7,500, what do you have? You have twenty boxes of documents to store somewhere in your law firm. There is a cost associated with this storage space, but that cost won’t be paid by your client - it will come out of law firm profits each year that you are responsible for retaining those documents.
Your decision has been made and the expenses for the client and the law firm have been incurred. Now for the exercise.
Step One - Put the documents in chronological order so that a time line can be prepared. The cost?
Studies done by a major accounting firm indicate that on average it takes a minute and a half to locate a document one time. Who will locate your documents when you need them - your legal assistant? What is the billing rate - $85 per hour? What is the cost to locate each document one time - $13,281? Let’s assume that your legal assistant can also put them in chronological order in that minute and a half that it typically takes to locate each document.
Step Two - Now prepare an index of all of the documents in chronological order showing the following information:
Who will prepare this index – secretary, paralegal or your legal assistant? This will take some time, as someone will have to go through the documents one at a time to locate and type the document number, the Bates number(s) and the date. Let’s assume it can be done at the rate of thirty seconds per document. At this rate, it will take more than fifty-two hours to prepare an index for the 6,250 documents. What do you pay your secretary - $20 per hour? If your secretary prepares the index at this rate, the cost will be roughly $1,040. Who will absorb this cost - the law firm? If your paralegal or legal assistant prepares the index the cost will be roughly $4,420. Will the client be happy about paying this much to prepare an index of the documents?
Step Three - Attach a copy of each document to the index so that it can be reviewed instantaneously each time you want to look at a document as you go through your time line. Will you use your master set of documents for this? Of course not. They are under lock and key. Will you use your working set of documents for this? Maybe, but probably not, because then you don’t have that comfort zone of a complete, readily accessible, working copy of the documents. Besides, you just had them put in chronological order and you don’t want to risk losing the benefit of that work. So what do you do - invest in making a third set of the documents at a cost of $3,000.00. You now have $9,000 invested in thirty boxes of documents that you must store and maintain for years to come.
Step Four - Total your cost for this portion of the exercise.
Step One - $________
Step Two - $________
Step Three - $________
Total Cost - $________
Compare the total cost you calculated in Step Four with the cost to manage this portion of the exercise with scanning, electronically bates numbering, coding the bates numbers and date of each document and loading the images and index into a database at $.20 per page. Total Cost $5,000.
Step One - One mouse click puts all documents in chronological order.
Step Two - Run a report from the database and indicate what you want included in the report, then click to have a report generated which prepares this index for you. Then click on the print button to obtain a hard copy of the index. This will take a few seconds of your time, but you can then do other things while the index is printing.
Step Three - Every document image is already linked to each document number, Bates number(s) and date, and the cost is included in Step One.
Step Four - Total Cost $5,000
Almost everyone can see the value of using databases at this point. For anyone who doesn't get it yet, consider what the next steps in the exercise will require.
Click here to read Part 2