Tag Archives: Library Budget
It seems to me that legal research cost recovery has a natural ebb and flow; sometimes it’s the hot topic and sometimes it isn’t.
Economy bad = Recover more costs!
Economy good = Cost recovery…Eh…
I wonder if this time is different? Has the economy driven a change that has established a permanent foothold and redrawn the landscape of cost recovery, or, like many other “changes,” will we just go back to the status quo? I have to admit that I’m not entirely sure. On the one hand, this seems to be one area where many clients, especially corporate ones, have drawn a line in the sand, and refused to pay. On the other hand, it seems like we’ve been here before, and not much changed the last time we had this discussion.
What ever happens, Lexis is one company that is betting on both sides of this coin (pun intended). Yesterday I read that LexisNexis announced a strategic partnership with eBillingHub, a product that helps simplify e-billing and increase collections (Thomson Reuters also partners with eBillingHub through its Elite product). Believe it or not, LexisNexis also sells CounselLink, a product designed to “identify greater savings through superior invoice technology.”
In other words, they sell a product to law firms to help with e-billing and recovery of costs, and they also sell a product to corporate law offices designed to remove those costs. It might be interesting to know how many law firms submit bills through a LexisNexis product, with LexisNexis charges, that get denied by another LexisNexis product.
I’m a big fan of the Legal Research Plus blog from Stanford. Paul Lomio’s post this morning caught my eye, and it really hit the mark. Paul compares pricing he just received from a legal information vendor with a recent article in Businessweek. Paul quotes from the article:
Bargains are everywhere in America these days. Men’s shirts and sweaters were 3.4 percent cheaper this April than a year earlier. Prices also fell for eggs, peanut butter, bananas, potatoes, hotel and motel rooms, cosmetics, curtains, rugs, tools, and lawn care. Excluding gasoline and other energy items, the consumer price index rose just 0.9 percent for the year. . . .
But the pricing he just received for a multi-year legal information contract includes a “below average” increase of only 3%.
I can literally feel his frustration through my computer screen, and why shouldn’t he be? Why do some legal information vendors believe that they can continue “business as usual” ? Everyone’s costs have gone up, so that is no excuse. The big difference is that everyone else is fighting for your dollar, and using the standard technique to get it: lower prices.
Bottom line…it happens in this industry because they believe that they can.You can’t live without their service, so you are forced to acquiesce to their demands.
But guess what? They can’t live without you either…
As Justice Potter Stewart said in the 1964 case of Jacobellis v. Ohio: “…I know it when I see it…”. Of course he was referring to obscenity in a movie, but I suppose that many would find these prices “obscene”.
Paul Lomio recently received a brochure for the California Official Reports from LexisNexis. The brochure included pricing:
- California Official Reports: Supreme Court Bound Volumes…$ 22.30
- California Official Reports: Appellate Court Bound Volumes…$ 22.30
I verified this pricing on the LexisNexis bookstore. He compares this pricing to his last invoice for a volume of West’s California Reporter 3d:
- West’s California Reporter…$ 195.50
I went to the West online store and found some interesting pricing. You can buy an entire set of Cal.3d for $2,415 for 110 volumes or $21.45 each. However, the per volume prices are as follows:
- Volumes 1 to 37….$111.000
- Volumes 38 to 110…$260.00
I have no idea what happened between volumes 37 and 38 that would cause the pricing to more than DOUBLE.
I suppose Paul should take some comfort in the fact that he is getting a 25% “discount”! Yeah…?
Paul Lomio and the librarians at Stanford have an excellent blog, and a recent post titled, Happy Days No More, caught my eye. The post concerns the library’s unenviable task of dealing with the “sea change in library collections…forced by changing budgets.” In ordinary times vendor price increase can have a big effect, but in these times, the effect can be disastrous.
In this post, Paul details a few of his upcoming difficult decisions. Such as the choice between USCA and USCS, he states:
We subscribe to both United States Code Annotated (USCA) and United States Code Service(USCS). Last year here’s what we paid for each:
We paid $1,645 for USCS (a Lexis product); and we paid a total of $5,376 to West for their USCA in 2008, including all bound volumes and pocket parts. (my emphasis)
Each set is a complete annotated version of the United States Code. The quality on both is extremely good. There is absolutely no doubt in my mind that any student, professor or practitioner can perform adequate legal research with just one or the other — no one needs both. So faced with that fact and the budget reality, which one will the dean say “that’s easy” — the one that costs $ 1,645 or the one that costs $ 5,376?
Beyond print, Paul also wonders about the big (formerly untouchable) online databases, which contrary to popular belief, do come with a price tag:
Depending upon how my budget situation shakes out, we may even face the rather drastic step of cancelling some online databases. There are three gigantic legal online commercial databases, each with its own benefits and features, but each also a complete online law library. Here’s what they are costing us:
Bloomberg Law: Free
LexisNexis: $ 68.00 per FTE, with minimum of $ 15,000 and maximum of $ 50,850
Westlaw: $ 73.27 per FTE, with minimum of $ 15,878 and maximum of $ 64,206
Looking back over the past few years helps show pricing patterns, which could aid in the decision making:
2008: $ 34,980 (6% increase over previous year)
2007: $ 33,000 (5%)
2006: $ 31,497 (5%)
2008: $ 39,951 (7% increase over previous year)
2007: $ 37,338 (7%)
2006: $ 34,773 (14%)
So, we really are all in the same boat, and we will come out the other side of this crisis. However, I believe that the way organizations view legal research resources and library budgets will never be the same. I don’t know that the vendors have gotten this message yet, but they will.
Last week a lawsuit was filed alleging that law firms overcharge for computerized legal research. You may be asking, “Are we profiting from online legal research?”
The May 7th edition of the National law Journal reports that New York’s Chadbourne & Parke faces litigation regarding allegedly using online contracts to create profits. Firms are reacting by turning to the ABA Formal Ethics Opinion 93-379 and a new tool on the ABA’s website, Cost Recovery: 50 State Survey Results (September 2008), for state-by-state rules and regulations.
However, this issue isn’t black and white and every firm is different. It takes experience, knowledge and an understanding of the intricacies involved with cost recovery issues and methodologies to keep a firm within the ethical guidelines, while meeting their goals.
Cable&Clark offers such expertise and understanding by:
1. Reviewing your current cost recovery process,
2. Recommending customized cost recovery policies and procedures,and
3. Implementing the new procedures internally and externally to clients.
In a recent post, Dennis Kennedy laid out his technology trends for 2009. I’m especially intrigued by the first one, as it echos what we have been talking about in the library world.
1. Technology Budgets Get Decimated. At many firms, technology spending has crept up to be a substantial line-item on the firm’s budget. If it comes to cutting the tech budget or laying off people, most of us would like to be at a place that puts people first.
I originally was going say that technology budgets stay flat, but I’ve changed my mind. And I use the word “decimate” deliberately. The word originally meant the killing of one of ten soldiers. It later had the sense of drastic losses. In many firms, a large portion of the tech budget is set in stone and can’t realistically be cut during the year. That’s why my initial thought was that we’d see freezes rather than cuts. Now I believe that we’ll see cost—cutting as the year progresses. For the average lawyer, don’t expect to see a new laptop this year. In fact, don’t expect to see much of anything new this year.
What to do: Technology audits to determine what you are doing and where you can make cuts. Reduce duplication and increase standardization. Look for volume discounts, renegotiate large contracts, and consider outsourcing as an option in many more instances. Require IT department to explain and justify budgets. (emphasis added)
I completely agree with Mr. Kennedy, and the way he succinctly provides a road map for successfully moving forward in these tough times. Let’s apply his plan to the library:
- Audit the collection to determine what you have and where you can make cuts.
- Reduce duplication between print and online.
- Increase subscription standardization within practice groups (e.g. one online tax subscription, instead of five).
- Renegotiate large contracts and look for additional discounts.
- Require attorneys to explain and justify new purchases or reluctance to cancel subscriptions.