Discovery
The largest box on the map. This is where litigation budgets go to die.
Where you are
The case survived the early motions. Everything from here is expensive, and this phase is the most expensive thing on the map.
You can still end this here.
How settlement works →Cost so far
You are now at roughly 41× the cost of answering that first letter.
What this is
Discovery is the phase where each side is entitled to demand information from the other. Not the polished version. The actual documents, the actual messages, the actual answers under oath.
It exists so that trials are decided on evidence instead of surprise. It is a genuinely good idea. It is also, for a venture-backed company, the phase that converts a legal problem into a financial one.
The four tools
Interrogatories — written questions you answer in writing, under oath. Narrow in number, broad in scope. Your lawyer drafts the answers; you supply the facts, and you are the one swearing to them.
Requests for production — demands for documents. This is the expensive one. Email, Slack, Notion, Drive, contracts, board decks, invoices, texts. Anything relevant, and "relevant" is broader than founders expect.
Requests for admission — statements you must admit or deny. Designed to lock down facts so nobody argues about them later. Answered carelessly, they concede your case.
Depositions — sworn testimony, in a room, on the record, with a court reporter and usually a camera. A lawyer asks you questions for hours. Your own lawyer can object but mostly cannot help you. Everything you say can be read to a jury.
Expect to sit for one, either personally or as the company's designated custodian of information. Expect the preparation to consume days.
Why this box is so large
Because of e-discovery, and because of how startups communicate.
Your company's real record isn't in a filing cabinet. It is in Slack, in email threads, in comments on documents, in DMs, in a Notion page someone wrote at midnight. All of it is potentially discoverable. All of it has to be collected, processed, and then read by lawyers before it goes out — to remove what's privileged, to remove what's irrelevant, and to know what's in it before the other side does.
That reading is the cost. Published research on electronic discovery has put document review at roughly 73% of the total cost of producing electronic documents. Not collection. Not the technology. Human beings, billing by the hour, reading your Slack.
Which produces the fact that founders find hardest to accept: your discovery bill is driven by how much your company talks, not by whether you did anything wrong. A meritless case against a chatty five-year-old startup costs more in discovery than a serious case against a quiet one.
Typical time: commonly six to eighteen months. Longer if there are fights about the scope of it — and there are usually fights about the scope of it.
What you decide here
Is the next phase worth what it costs? This is where that question gets real, because you can finally see the number.
By the time discovery is underway you know the shape of the case: what they have, what you have, how bad your documents are, how your witnesses hold up. That is more information than you have ever had about this dispute. Use it. Reprice the case honestly and decide again, with better data than you had at the demand letter.
Discovery is also where most founders discover they are not the person they thought they were in writing. Something in an old thread, written fast, out of context, that will be projected on a screen and read aloud. There is almost always something. Finding it early is worth a great deal — it is the difference between your lawyer managing it and the other side springing it.
What you actually do this week
Verify the hold is comprehensive. Every system, every custodian, auto-delete off everywhere. Spoliation sanctions can lose you a case you would otherwise win, and courts are not sympathetic about it.
Narrow the scope before you collect. The fight over custodians, date range, and search terms happens up front and it is the single biggest lever on the total bill. Fighting a broad request is usually cheaper than complying with one.
Push for a protective order early. It governs how the other side handles your confidential material — source code, financials, customer lists. Get it in place before anything sensitive goes out.
Take privilege seriously. Communications with your lawyer are protected, but the protection is easy to break — forwarding legal advice to someone who doesn't need it, looping in an advisor who isn't covered. Ask what the rules are and follow them exactly.
Prepare properly for your deposition. Days, not hours, with your lawyer. Not to script you — to teach you how the format works, because the format is the trap.
Watch the burn. Ask for a discovery budget with a per-phase breakdown, and ask for it in writing. If your lawyer can't produce one, that itself is information.
The mistake at this stage
Two, and both are expensive.
Sloppiness with the hold. Someone clears a mailbox, an auto-delete keeps running, a departing employee's laptop gets wiped on schedule. It looks like ordinary operations to you and like destruction of evidence to a judge. The sanction can be an instruction to the jury that they may assume the missing documents were bad for you. That is a case-ending event that has nothing to do with the merits.
Letting discovery run without a budget. Discovery expands to fill whatever it's given. Every request breeds a response, every response breeds a follow-up, every dispute breeds a motion to compel. Founders who set a number and revisit it monthly come out of discovery. Founders who wait for the invoice to tell them where they are do not.
You can still end this here
Most cases that settle, settle around here. Both sides have finally seen the evidence, both sides have spent real money, and both sides are looking at trial prep — another large box — with clear eyes.
This is also the moment to notice something: the money already spent is gone regardless of what you decide. The only live question is whether the next phase is worth its price. → How settlement works
Where Story fits
Story makes this phase cheaper twice.
Once in advance. Discovery costs what it costs because nobody can find anything. Documents live in five tools, three of them belong to a lawyer you stopped working with, and the version everyone actually signed is in someone's inbox. Every hour spent reconstructing that is billed at litigation rates. A company running on Aegis arrives with its records already structured — the same data room that made you diligence-ready.
And once in the moment. Scoping the discovery plan is general counsel work: custodians, date range, search terms, what is worth fighting and what is worth conceding. That negotiation is the single biggest lever on the total bill, and it is a business decision as much as a legal one — which means it needs someone holding the case and the P&L at the same time.
This is the phase that eats runway. Budget it like a line item, track it monthly, and say the number out loud.
This is general educational information from the attorneys who build Story. It is not legal advice, it does not create an attorney-client relationship, and it is simplified — litigation procedure varies significantly by jurisdiction and by case. Talk to a licensed attorney about your actual situation.
We're lawyers, remember? Please read this important note:
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