Consultant Corner: Litigation Budgets...This Ain’t Your First Rodeo, or Is It?

Service providers targeting the construction litigation arena tend to follow a similar path when it comes to finding new clients and getting hired for the first matter: Get an initial meeting, learn about the client, tout the provider’s vast expertise – showing how it aligns with said client – then wait for the new client to call with the ideal matter. 

Sound familiar?

Companies who face construction litigation turn to a variety of different service providers for assistance: lawyers, experts, and eDiscovery vendors to name a few. We can all agree that, while every construction project and claim present their similarities and differences, there are probably more of the former than the latter.  Although the parties, timing, COVID impacts, location, and nuances of the issues in dispute might differ—for the most part, the similarities tend to parallel more than they tend to diverge.  So why do we all tend to freeze when it comes to pinpointing the dreaded B word: The Budget?

At a panel discussion amongst several large general contractors’ in-house counsel a few months ago, the words of Logan Hollobaugh, VP- Legal for Clough N.A., really stood out: “Everyone on this panel works for a general contractor.  Our companies leverage our experience to get awarded new jobs which always require budgets, despite the many unknowns common on construction projects. This begs the question: why are outside counsel and the consultants any different?  If consultants are as experienced in construction litigation as they claim, why is it like pulling teeth when it’s time to prepare an initial case budget? Why do we only hear “[i]t is too difficult to budget at this time or there are too many ‘unknowns’ when it is time to prepare a budget?”

The solution: building better budgeting tools to give the client a strong sense of what is coming with clear understanding the budget is not an NTE. What’s more, a tool equipped for updates based upon real developments in the matter.  As a vendor of eDiscovery services, when developing a budget, we consider various inputs including:

• expected duration of the matter;
• average size of the project files and email sets of similar projects;
• average deduplication and data reduction rates of similar cases;
• number of parties involved;
• types and number of claims asserted;
• relevant data retention policies and compliance therewith; and
• software platforms and other specialized technology the project employs. 

Consultants and counsel alike have used the tried and true method of guesstimation based upon the total litigation costs of a similar matter multiplied by some inflationary markup factor.  Moreover, neither the consultant nor the client tend to look at this budget again unless and until the total amount billed has already exceeded the budget number.  While this methodology works some of the time, a blown budget often leaves the in-house counsel embarrassed.  Given this similarly repeated conundrum our clients face, can we do better as an industry?

For instance, consultants guide clients well by providing a budget that lives and breathes as information develops rather than sticking with the guesstimate that only proves inaccurate when outstripped.  A living and breathing budget evolves as the client and counsel obtain more accurate information.   Specific to the eDiscovery realm, consultants can create budgeting tools that facilitate immediate updates when data inputs change. As in a scenario involving the inputs above, the eDiscovery consultant might instantly update the budgeting model once the consultant collects data, thus providing exact data set sizes, while replacing the initial estimate based upon previous case similarities.  Consultants can, likewise, revise any data input when it confirms actual figures (or even when it receives better estimates) providing a more accurate budget in real time.  This way, the client receives updated budget forecasting – enabling counsel to inform other constituents within the organization – before receiving the bill.   

The construction industry embraces technology at a rapid pace which enables project teams to prepare more accurate budgets faster than ever. There is an explosion (and maybe some fear) about AI and automation replacing certain tasks within both the construction and legal industries.  With the increased pressure on attorneys and consultants alike to prove their value, isn’t this a perfect time to ‘level up’ our offering?  Let’s continue sharpening our skills utilizing data from prior assignments and real time updates to guide companies through litigation’s financial unknowns. By using the information that we see every day to align with our construction company clients’ business needs and financial concerns – something that automation and ChatGPT really can’t touch – we will position our firms to add value for the foreseeable future.

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Author Lauren Abeyta is the Chief Operating Officer, Construction Discovery Experts (CDE), a full-service eDiscovery concierge that guides its clients in all aspects of eDiscovery while maximizing their time and resources.

Editor Thanh Do is an Associate in Thornton Tomasetti, Inc.'s Forensics practice group. As a structural engineer, structural failure analyst and investigator, Dr. Thanh Do examines infrastructure inadequacies and determines the root cause of the alleged failures. He specializes in building collapse investigation, standard of care assessment, construction defects and design errors/omissions evaluation.