[Please welcome 3 Geeks' Guest Blogger, Mark Gediman]
My Grandfather was notorious about finding a deal. He would go into a major department store and dicker with them over their prices. To him, the published price was just a starting point and he refused to buy unless he thought he was getting the price that he felt was reasonable. Clients in today’s legal marketplace have this same attitude.
You can see it in recent news items discussing the attitudes of General Counsels at large corporations as they struggle with reducing costs with major law firms. They are negotiating hourly rates aggressively and questioning every item that appears on their bill. The question of whether or not the hourly billing model has gone the way of the dodo has been debating extensively, including by 3Geeks’ own Toby Brown on this page. I think the hourly rate issue should be separate from the online research charges that appear on the bill. As you can see in my analysis below, these charges actually reflect the efficiencies these services provide.
In my position as Information Services Manager for a great metropolitan law firm (naw…even I don’t believe I’m Superman…all of the time), I find myself constantly explaining/defending/justifying our cost recovery policy. Maybe I’ve been sampling the Kool-aid along the way, but I’ve come to realize that most firms that charge back for online services are actually saving their clients money. Here are some examples of why I’m not delusional:
- Charging a fee for pulling a case online is less than the cost of pulling it off the shelf
Let’s say a firm charges clients $10 per case. It takes about a minute to pull and print the case. With a billing rate of $300/hr, the total cost to pull that case would be $15 ($10 for the case, $5 for the attorney’s time).
If the case is pulled from the shelf, let’s figure the following time is spent: 5 minutes to walk to the books, 2 minutes to pull the right volume, 5 more to copy the case and 5 more to walk back to the office for a grand total of 17 minutes. The cost is $85. And this doesn’t count the cost of the space required to house the cases or the copying charges.
The cost to pull the case online is only 17% the cost of pulling it in print. I realize that not everyone does these activities in exactly the same way. However, what is clear is that the client actually saved money in the process.
- Case & Code research is better online
First, let’s do this research online. Type in your search, starting broadly, and then narrow your search with focus or locate. It takes about 5 minutes to run the search and about 15-30 minutes to review the cases with your terms in context. In the interests of fairness, we’ll go with 30 minutes. Then print the cases you want and you’re done. Total time spent we’ll round up to 40 minutes to allow for printing. At our hypothetical $300/hr rate, the cost of the time spent comes to $200. Add in $40 for the search and you’ll have a total cost of $240. This analysis assumes that this is a normal search, not too esoteric, and that the search result is manageable, say about 20 cases. The analysis is essentially the same for searching codes.
Next, let’s look at the process for researching cases and codes in print. Picking up a digest or a code index, and looking for the correct subject can take anywhere from 10 minutes to an hour. This assumes that what we are looking for is easily translatable into the canned headings they use and not horrendously cross-referenced (i.e., “See post-trial” which then says “See Judgments”). This process can take anywhere from 10 minutes to an hour depending on the research. For the sake of discussion, we’ll stick with 10 minutes. Then we spend about an hour pulling and reading the cases that were listed in under the digest heading. Then we add in the 17 minutes it takes to copy the darn things. We now have a total time spent of 1 hour and 27 minutes and a cost of $435.
The cost to research cases and codes online is only 55% the cost of doing it in print. A significant difference I would say.
-Researching can be more cost effective online
The online process is relatively simple. Run the search in one or several treatises, focus or locate the sections discussing your specific terms, review the results and print the sections you want to keep. Say, about 40 minutes of your time. Couple that with the $40 search charge gives you a total cost of $240.
It is not quite as simple to do this with print. The process and time spent are similar to the case/code research referenced above. Assuming the book is on the shelf to begin with, start with the index or table of contents, look at the several sections/chapters that you find for the most relevant and then copy what you want. Total time is 1 hour 35 minutes and cost comes out to $435.
Again about a 55% difference in cost.
The same is not true if it is a treatise, usually a practice guide, that the end user knows intimately. Several years ago, I published an article discussing this phenomenon and concluded that it is actually better to keep these types of treatises in print.
I cannot think of anyone who practices law in this day and age (yes, I realize that phrase dates me) that does not subscribe in some way to an online service. To not do so would be to invite a malpractice claim. Courts have stated unequivocally that firms should utilize these resources to provide their clients with the best representation possible (Margolis, Ellie, Surfin’ Safari-While Competent Lawyers Should Research on the Web, 10 Yale J.L. & Tech. 82 (2007-2008)). An example of the advantage of using a service online instead of in print can be found with Shepardizing (or Keyciting for you West folks). The Shepard’s print service is 6-9 months out of date when the firm receives it, a delay caused by editorial deadlines and publishing requirements. Compare this to the online service that is updated within 24 hours of an opinion being issued and it is easy to see why this could be important to client.
We all know that these services come at a price. But, as you can see from the examples above, these services actually serve to save the clients money and advance their cases. It is reasonable for firms to bill the charges back to the client when they create efficiencies and add quality to the firms’ representation of their interests.