Two things jumped out at me in yesterday’s discussion on the PLL Listserv regarding paid online services:

  1. Firms are in the midst of a major debate on Cost Recovery
  2. Librarians are worried about the subscription services of the future

For #1, I have made clear my positions on cost recovery in both a blog post here and an article on the subject in Spectrum [pdf]. These lay out what I feel is a reasonable way to recover costs that is reasonable to both the client and firm. These costs are so onerous that Firms have to be able to recover them to stay in business. Whether it get’s built into rates, fees or remains a separate line item, doesn’t make a difference. The important thing is offsetting these huge expenses as much as possible to remain profitable.

As for #2, the future User Interface (UI for short), needs to be able to:

1) Search across all of my subscription resources

Our firms purchase content from multiple vendors and it is becoming more and more challenging for our attorneys to find the materials they need. They would be able to work better if they can access the online materials in the same way they do on the shelf. On the shelf, West materials sit in the same section as Lexis and so on. We have built a UI (Full Disclosure: our UI is hosted by LexisNexis) that allows attorneys to find materials based on how they work, not who publishes them. A tab is set aside for each practice and links to online materials are grouped in ways that mirror the way their workflow. For example, under the Litigation Tab you would have items grouped by Civil Pretrial/Discovery, Civil Trials & CiviL Appeals, not by West or Matthew Bender.

This is where I think WestlawNext tripped up. I have been involved in contracts for Lexis and Westlaw for over 20 years and every one of them was content-based. Over that period, we have seen some major evolution in both of these products, not the least of which was the shift from a software- to a web-based search platform. Not once during this time have I been charged extra for the changed UI. Now, if this allowed me to search across multiple platforms I might consider it worth the premium. But I can’t see justifying the extra expense to search just the same resources that I have been able to search for years without trouble.

2) Allow me to set the per search charge to meet my unique requirements (See the Spectrum Article referenced above)

3) Make research more efficient

There has been a lot of fuss this year made over WestlawNext, CCH IntelliConnect, FastCase and now Lexis Advance. At AALL in Denver, a distinguished panel of executives from West, FastCase & Lexis discussed how they developed their respective UIs. While the conversation was interesting (despite being sidetracked at one point into a debate over treatises vs. primary resources), what I found fascinating was the fact that none of the panelists addressed how they were designing their UI to make the attorney work more efficiently. They seem to have missed an important factor in crafting their products: What is important to Law Firms is not how the service finds the answer for the attorney/researcher but what allows him/her to do so in the least amount of time at the least cost. “Googlizing” legal research is not the answer. Having to go through reams of hits actually makes the user less efficient.

I think that vendors are not seeing the direction that Law Firm legal research UIs are headed. We want to organize our content our way, using a single point of access. And we want the systems to make the user a better researcher.

One of my friends (who also happens to be a Westlaw Rep) mentioned that she had some clients that were confused when I discussed “Cost Recovery” in the past:

They are on flat rates, and are small 3 or 4 atty firms….so they were relieved to learn that oddly enough, usage has nothing to do with their pricing and they can use the fire out of it without raising their bill. I was relieved to see that you explained that in the update – thank you!. In my world, 100% of my customers have flat fee subscriptions, and they read your column too. It provided me a wonderful opportunity to explain how their plan works, but the situation was eye opening to me. 

First of all, I’m thrilled that her clients are reading my blog (or is she just saying that to kiss-up??… oh well, either way is great!) Second, I should warn anyone that reads this blog that we have a terrible slant toward how things are done in BigLaw. Toby’s not as bad at is as I am… but, it’s kind of what we know.

I thought that I’d put together a short little presentation that describes the basics of cost recovery (at least in some big firms.) I created this in PowerPoint, then converted it to video using PowerShow.com. The conversion caused a few timing issues, but for a freebie… I’m not complaining! (okay… I’m now complaining. Unfortunately, PowerShow’s presentation is an “auto start” “auto repeat” process that is apparently impossible to turn off, so I’ve embedded the presentation from authorSTREAM instead.)  If for some reason you can’t see this because your IT department seems to think that “embedded video” = “porn” … then you can download the presentation by clicking here. Again, it is a very, very basic overview of how firms recover the cost of Westlaw or LexisNexis searches, but sometimes basic is what we need.

A lot of us in the law firm library field have been asking for database and resource “monitoring” software for a few years now. Most of us have had our requests rejected because the cost of the software was seen as too high, or the benefits from such software were seen as too low back when the economy was booming. Now that law firms are cutting staff, attorneys, resources and salaries, some of those firms that rejected the monitoring software now understand the potential benefits that we’ve been talking about.

The Players
A little background on the big players in the database and resource monitoring world. There are really three main products out there:
1) OneLog 2) LookUp Precision 3) Research Monitor 4*) LexisNexis Cost Recovery Manager [PDF] (not really in the same league, but also used by some firms)
What is “Monitoring” Software?
The basic idea behind the monitoring software is to create an interface that tracks the usage of specific databases (i.e., Westlaw, Lexis, PACER, BNA, CCH, HeinOnline, etc., etc.) Many of these work within Internet Explorer and are fairly seamless for the person accessing the database. The last time I checked, most did not work with any other type of browser (of course, they all say they are “working on it.”) But most of the law firms are still using IE (according to my logs, many of you are still using IE6) so, that shouldn’t be a big deal for most of us. The software maintains information on:
1) Usernames & Passwords (either on a group level, or individual level) 2) Records which databases are used, by which users, and for how long 3) Restricts use of certain databases according to the license agreement (so if Partner “X” is the only person authorized to access a database, then Associate “Y” can be blocked from the application.) 4) Allows the administrator of the monitoring software to log out users remotely. Nothing is more aggravating than trying to access a database, but you can’t because someone logged in, then went to lunch without logging out. 5) Create billing reports. Instead of going through manually to bill out the PACER quarterly reports, the monitoring software will create those reports automatically. 6) Set pricing on each database. Most firms charge back for Lexis, Westlaw and PACER usage, but many do not charge back for other databases. Monitoring software would allow you to put a “per usage”, “per minute”, or “per transaction” price on any database. 7) Create a “What Isn’t Used” report. Now you can really see if that expensive database that the Practice Group Leader demanded a few years ago is really being used. When the librarian goes to the PGL and says “we are thinking of cutting this database”, and the PGL replies “Don’t cut that, I use that all the time!” Now the librarians has a way to see if that is true or not. Most of the time we know it isn’t being used, but didn’t have a good way to prove it.
Additional Ways to Use Monitoring Software
You can probably think of a few more good ways to use monitoring software. One of the ways that I’ve promoted is the “internal” resource monitoring. The IT or KM departments (or in some cases, the techie librarian) have created a lot of internal products that have great benefits to the firm. The monitoring software can be used to see what products are or are not being used, and who is using them. This can be a great resource when it comes to training, or spotting trends within practice groups on what tools are used, and what are not.
Is Big Brother Watching You?
In a word, “yes”. The initial thought behind this type of software is to save money by getting rid of databases you don’t need, or to reduce the number of users when demand for a database is low. Theoretically, it could also be used to monitor other things, such as how much time someone spends on Ebay or Craigslist. But, most IT departments can do that now, so this would just be another way of doing it.
Monitoring Software is Going to be Huge!
In a time when the fat is being cut, along with the meat, and some of the bone, monitoring software is going to be a tool of choice for many firms. The latest Law Librarian Survey mentions that many librarians are already using these tools as a cost cutting resource. The costs of just the monitoring software runs in the tens of thousands of dollars (depending upon the size of your firm, generally) and the first directive that librarians get is to cut enough in current database subscriptions to pay for the cost of the monitoring software. This is going to be one of those situations where firms will spend a little money in order to save a lot in return.

[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. -Caveat 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.