Ruminations on a common metric about discovery costs (60% of litigation costs)

A previous post mentioned the received wisdom that “70-80 percent of litigation costs are for discovery” (See my posts of Aug. 5, 2005 for the quote; Aug. 24, 2005 for estimates of pages per executive; and May 13, 2007 on the immensity of documents generated each year

Most people may think of that figure, which is variously estimated at 60 percent of litigation costs, as covering document collection, review and production. But then what about motion practice associated with discovery, and what about interrogatories and depositions? Not much is left in litigation spending if you count all fact finding as “discovery”? I wondered in an earlier post whether e-discovery accounts for 60 percent or so of all discovery (See my post of Oct. 1, 2005.).

Besides its lack of definition, it is unclear where the estimates come or their validity (See my post of Oct. 8, 2007 about an in-house guide to discovery.).

Regardless of scope and precision, the metric fits into a neat, and plausible progression: 60 percent of outside counsel spend is for litigation; 60 percent of litigation spend is for discovery; 60 percent of discovery spend is for electronic discovery; and perhaps 60 percent of electronic discovery spend is for review of the documents collected (See the post of Bad Blickstein on June 18, 2007 about document review.).

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