5/10/10

How much will you save by going to one legal research system?


Continuing my exploration of the economics of the practice of law, I listened in on a presentation that included a segment on how law firms may be moving to single providers for primary law access. Although a perennial topic previously noted on 3 Geeks, the rising pressure from clients not to pass on these types of costs is making this decision more of a real option.
Going through a mental exercise of what it likely costs per year, per lawyer for primary law access, I suggest the following math (This excludes the 'free' access providers such as Casemaker or Fastcase since they are only available in certain states):

$500 / month: average cost per lawyer for online research services.
$250 / month: 50% of that, to glean out all the high cost, practice specific stuff.
$125 / month: 50% of that, to filter out the secondary resources and editorial content attached to primary law.

The Solution: $125 x 12 months = $1500 in savings per year per lawyer per system for access to primary law.
My experience is that most legal research centers on primary law, so 25% should be a pretty conservative estimate. For a law firm, you could take that number and multiply it by the number of primary law access services you have (minus the one you keep) to come up with the ultimate savings of going to a single provider.
Yes - there are issues with going to a single provider, such as the links between secondary and primary law in a given setting. However, many of those issues can be resolved in negotiations. There will likely be some practice groups who need to retain access to certain primary law services, but it won't be something the entire firm needs. So a decision to go to a single primary law access service will include a bit of work, but could lead to significant savings.
The real question: How much would your firm save?

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3 comments:

Anonymous said...

I don't understand the math used here - is the unstated assumption that the firm has no current contract with any vendor and are only accessing the service on a pay-as-you-go basis? This is the only way the math would make sense - otherwise your savings are not going to be dictated by attorney usage but rather your actual cost (i.e., monthly flat rate). But, then, if you don't have contracts with either vendor -then the single provider question would be moot, yes? What am I missing here?

Toby Brown said...

The assumption is that a firm has contracts with multiple vendors and is paying a flat monthly fee to each vendor. These sorts of contracts are not per hour, but instead based mostly on how many lawyers you have along with your system utilization.

The $500 per month per lawyer is an industry average that includes access to secondary law and other resources. I'm saying the primary law portion of that fee is conservatively 25% - or $125. So if you cancel that primary law portion from a service you would save the $1500 per year ($125 x 12).

Anonymous said...

Got it - so you are estimating the potential savings of renegoitaing your contract(s) to cover only secondary resources, rather than cancelling contracts completely. I have not seen this sort of analysis elsewhere. Most discussion I have seen focus on complete cancellation of one vendor - this is an interesting alternative.

 

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