Measuring the ROI of Strong Information Governance Processes

Access to Information

By applying the information governance program to information access, firms can minimize duplication efforts and the time attorneys and staff spend looking for data. When electronic information is properly categorized and maintained, lawyers and staff will be able to easily identify and access information remotely and therefore be more responsive to clients.

Other ROI measurements include quantifying the lost billable hours attributable to time related to locating needed information and records. Simply put, if there are multiple timekeepers working on a matter, all of the timekeepers may be performing similar actions to manage client matter information. Calculating the time and cost associated with these redundant actions will go a long way to justify the need for information governance.

A recommended approach to improve the process for managing client matter information is to designate an individual on the matter team to be responsible for ensuring that the entire client matter “file” is up to date. This often involves redistributing information governance functions to dedicated resources.

Electronic Data Storage

Even as electronic data amounts have exploded, storage has become cheaper. As a result, firms often decide it's easier to keep every electronic file rather than develop an information governance program.

However, while storage is cheap, maintenance is not. Maintaining data involves staffing costs, backup, migration and restoration. It also costs money to conduct e-discovery and erect litigation holds for duplicative data, especially if the data subject to a hold is not easily located.

To develop accurate metrics, firms need to consider the true cost of data storage and maintenance, including storage per GB, backup per GB, and co-location and on-site space dedicated to data. Staff expenses have to be factored in as well. Firms must also consider external and internal e-discovery review costs as well as attorney departure review time.

Savings can be found through reducing the amount of information kept in electronic data storage, developing true media-independent destruction processes, targeting litigation hold procedures and limiting repositories and duplicates.

Physical Files and Documents Records

Although electronic data stores have exploded, many attorneys continue to keep hard-copy client files that require supplies such as boxes, shelves and staff to manage them. Firms also must pay for space for materials residing in both on-site office space and off-site vendor space. To determine costs for physical records, firms should calculate the actual hard dollar costs for supplies associated with managing physical files. These costs include paper, printing supplies, hardware, filing folders, filing cabinets and other miscellaneous supplies. Time spent by staff to create and manage physical material must also be measured and quantified.

Firms routinely send large quantities of physical files to off-site storage vendors when a matter representation has concluded. Most law firms do not have policies to restrict the volume of physical files sent to off-site storage. In most cases, the hard-copy matter file is made up of printed information that is also being retained in electronic format by the firm. Rarely are these hard-copy files referenced again until final disposition decisions are enacted ' often 7 to 10 years after a file was sent to off-site storage. Implementing policies to restrict the type of documents retained once a matter has concluded will go a long way to control the growth and expense associated with physical files. Keep in mind that the cost for storing physical, inactive matter files is usually an overhead expense that is not billable to a client.

Risk Mitigation

In today's highly regulated environment, information governance programs can mitigate risk by adhering to their document retention program. Cost savings can be measured by calculating potential fines, particularly in light of any history the firm has of compliance issues. It is also important to consider how firms may have lost clients in the past due to this very issue, and suffered from negative publicity. An improved information governance policy will result in less “public” matter information for compliance.

Conclusion

Through an effective information governance program, lawyers will improve their ability to meet professional responsibilities relating to client information, and address growing regulatory and privacy requirements. In order to be effective, information governance must become part of a firm-wide culture of participation and collaboration.

Nancy Beauchemin, CRM, is president and founder of InOutsource, a records management and information governance consulting firm. This article also appeared in Legaltech News, an ALM sibling of e-Commerce Law & Strategy.

Information governance (IG) requires a firm-wide approach for managing and protecting client information. IG initiatives in law firms are driven by several factors, including client requirements, legal statutes related to confidentiality and data privacy, and the costs associated with managing growing volumes of both structured and unstructured content. By taking a proactive approach and laying out the business case through the measurement of the return on investment of information governance, law firms realize significant savings, improve client service and minimize risk.

Determining Metrics

To help make a business case for an information governance program, it helps if law firms can define the ROI through hard dollar savings. A logical first step is to perform a benchmarking analysis to quantify the costs and efficiencies of a firm's current environment for managing information.

Access to Information

By applying the information governance program to information access, firms can minimize duplication efforts and the time attorneys and staff spend looking for data. When electronic information is properly categorized and maintained, lawyers and staff will be able to easily identify and access information remotely and therefore be more responsive to clients.

Other ROI measurements include quantifying the lost billable hours attributable to time related to locating needed information and records. Simply put, if there are multiple timekeepers working on a matter, all of the timekeepers may be performing similar actions to manage client matter information. Calculating the time and cost associated with these redundant actions will go a long way to justify the need for information governance.

A recommended approach to improve the process for managing client matter information is to designate an individual on the matter team to be responsible for ensuring that the entire client matter “file” is up to date. This often involves redistributing information governance functions to dedicated resources.

Electronic Data Storage

Even as electronic data amounts have exploded, storage has become cheaper. As a result, firms often decide it's easier to keep every electronic file rather than develop an information governance program.

However, while storage is cheap, maintenance is not. Maintaining data involves staffing costs, backup, migration and restoration. It also costs money to conduct e-discovery and erect litigation holds for duplicative data, especially if the data subject to a hold is not easily located.

To develop accurate metrics, firms need to consider the true cost of data storage and maintenance, including storage per GB, backup per GB, and co-location and on-site space dedicated to data. Staff expenses have to be factored in as well. Firms must also consider external and internal e-discovery review costs as well as attorney departure review time.

Savings can be found through reducing the amount of information kept in electronic data storage, developing true media-independent destruction processes, targeting litigation hold procedures and limiting repositories and duplicates.

Physical Files and Documents Records

Although electronic data stores have exploded, many attorneys continue to keep hard-copy client files that require supplies such as boxes, shelves and staff to manage them. Firms also must pay for space for materials residing in both on-site office space and off-site vendor space. To determine costs for physical records, firms should calculate the actual hard dollar costs for supplies associated with managing physical files. These costs include paper, printing supplies, hardware, filing folders, filing cabinets and other miscellaneous supplies. Time spent by staff to create and manage physical material must also be measured and quantified.

Firms routinely send large quantities of physical files to off-site storage vendors when a matter representation has concluded. Most law firms do not have policies to restrict the volume of physical files sent to off-site storage. In most cases, the hard-copy matter file is made up of printed information that is also being retained in electronic format by the firm. Rarely are these hard-copy files referenced again until final disposition decisions are enacted ' often 7 to 10 years after a file was sent to off-site storage. Implementing policies to restrict the type of documents retained once a matter has concluded will go a long way to control the growth and expense associated with physical files. Keep in mind that the cost for storing physical, inactive matter files is usually an overhead expense that is not billable to a client.

Risk Mitigation

In today's highly regulated environment, information governance programs can mitigate risk by adhering to their document retention program. Cost savings can be measured by calculating potential fines, particularly in light of any history the firm has of compliance issues. It is also important to consider how firms may have lost clients in the past due to this very issue, and suffered from negative publicity. An improved information governance policy will result in less “public” matter information for compliance.

Conclusion

Through an effective information governance program, lawyers will improve their ability to meet professional responsibilities relating to client information, and address growing regulatory and privacy requirements. In order to be effective, information governance must become part of a firm-wide culture of participation and collaboration.

Nancy Beauchemin, CRM, is president and founder of InOutsource, a records management and information governance consulting firm. This article also appeared in Legaltech News, an ALM sibling of e-Commerce Law & Strategy.