Legal Research Archives | Page 4 of 4 | Lisa Solomon, Esq. Legal Research & Writing

WestlawNext Preview: Product and Pricing

January 27, 2010 by Lisa Solomon 29 Comments

Westlaw will be launching its new search engine, called WestlawNext, at Legal Tech New York next Monday. Yesterday, the folks responsible for WestlawNext gave a pre-launch presentation about the new platform to a group of bloggers and legal journalists who write for various audiences. Carolyn Elefant and I were there representing the small firm and solo practitioner perspective. Other participants included Greg Lambert of 3 Geeks and a Law Blog (large firm perspective), Donna Tuke of Legal Information Alert (a publication for law librarians) and Canadian practice management advisor David Bilinsky (among others). (Disclosure: West paid the participants’ expenses to travel to its Eagan, Minnesota headquarters for the meeting). Everyone at the Eagan meeting (as well as a few others who were not able to attend) had already had an opportunity to use the beta version of Westlaw Next and to provide feedback to the developers.

How Does WestlawNext Differ from Westlaw?

Although he couldn’t make it to Eagan, Bob Ambrogi (who was one of the bloggers who got a beta preview) hit most of the high points of the new search tool in a post published yesterday. Laura Bergus of Social Media Law Student and David Bilinsky have also posted product reviews.

A few additional points are worth mentioning. First, although the ABA Journal reported that, as of December, West was still considering whether or not would allow users to perform boolean (terms and connectors) searches, at yesterday’s meeting the West representatives clarified that boolean searching is not being eliminated.

Second, although both Ambrogi and the ABA Journal refer to the ability to do “natural language” searches in WestlawNext, the West representatives explained that the WestlawNext algorithm for non-boolean searches is much more sophisticated than the algorithm used for natural language searches on Westlaw.com. In particular, it leverages West’s human-created content—including the key number system and other proprietary analytical content (such as statutory annotations and treatises)—along with KeyCite results and customer usage information to return more relevant results earlier in the research process.

Third, I’m intrigued by the fact that you can search in a database that is outside your subscription plan, and review the results list, without incurring search charges. Instead of charging for the search, with WestlawNext, you’ll be charged only for accessing the documents that you view in full text.

Pricing: the Elephant in the Room

There’s no question that WestlawNext is superior to Westlaw. Unfortunately (as the ABA Journal noted on Monday), that performance comes at a price.

When we asked, point blank, what that price would be, the West representatives didn’t have a simple answer. Instead, they explained that the company’s sales reps will try to convince customers to add additional content to their subscriptions at the time of upgrade. When pressed as to whether the upgrade would be pegged at a certain percentage of the cost of a subscriber’s plan, West denied taking that approach.

West’s non-response essentially leaves its subscribers in the dark and on their own when it comes to upgrade negotiations. As I see it, the best way to counter West’s strategy is to crowdsource solutions, a la BidonTravel.com. Perhaps some enterprising legal tech expert will set up a site like BidonTravel.com in the not too distant future; in the meantime, I invite you to discuss your experiences in the comments below.

I’d like to upgrade, but I know I don’t want additional content within my subscription plan. How West will respond to this position remains to be seen; I’ll report back on my negotiations with my account rep.

Finally, some advice for West: although I don’t have any statistics at the moment, my sense is that, since it lowered its prices a number of years ago, West has captured a significant portion of the small firm lawyers and solo practitioners who previously used Lexis. If WestlawNext comes at too high a premium, West may lose the ground it’s gained.

HuffPo Article About Legal Research Gets it Wrong: Everything Old is New Again

August 13, 2009 by Lisa Solomon 6 Comments

I eat, breathe and sleep legal research and writing. Although it’s a big part of my life, I realize that the general public doesn’t share my passion for the subject. That’s why I was more than a little surprised to learn that today’s Huffington Post—which, according to Wikipedia, is the most linked-to blog on the web and had 8.9 million unique visitors in February, 2009—features an article entitled The Reinvention of Legal Research: The Future is Now.

The article’s premise is that the application of technology to information has led to “the radical transformation of the legal publishing marketplace.”

According to the author, Peter Schwartz,

Data trumps documents. Legal, regulatory, and court documents – once intrinsically valuable – increasingly serve as mere information containers. New methods for tagging, extracting, organizing, and presenting information in documents create new possibilities for how quickly we can assemble, analyze, interpret, and disseminate this information.

Information is liquid. We now live in an ocean of information, and are swept along by its riptides and currents. The challenge is to manage our relationship to this information so it serves us our higher purposes. We need ways to filter real-time story-telling and reporting so we can identify narratives that have substance and reject those that are ephemeral, partial, distorted, or trivial.

So far, so good. I have no quarrel with these philosophical musings about the nature of information in the internet age.

But Schwartz’s conclusions are dead wrong.

According to Schwartz,

[c]ustomers will not pay for research. When online legal research platforms were proprietary, online publishers imposed per-minute and per-use pricing structures. This pricing model facilitated client cost-recovery and allowed publishers to use law firms as information wholesalers. Because information is now a commodity, law firm clients will no longer pay for online legal research. New flat-rate pricing models for online research products reflect this reality.

The large legal publishers are in trouble. If law firms can no longer pass through online research costs to clients, multi-billion dollar legal publishers such as West and Lexis can no longer support pricing models premised on law firm cost recovery. Because West and Lexis cost structures depend on this pricing model, they are beginning to experience painful margin squeezes, compounded by the entry into the legal research marketplace of both nimble, low-cost competitors and new rivals with deep pockets such as Bloomberg.

Let’s analyze this, shall we?

Customers will not pay for research. Who are the “customers”? The lawyers who conduct legal research so that they may advise (and frequently advocate for) their clients? Or the clients who hire the lawyers who conduct the research?

If it’s the former, then Schwartz’s company, Knowledge Mosaic, Inc., should find a new business model, pronto: they make their money by selling subscriptions to their Securities Mosaic Website and News Service for $1,250 per year.

If it’s the latter, I agree: as I’ve previously written, the ABA’s view notwithstanding, the cost of a firm’s online legal research subscription is a part of overhead that shouldn’t be passed on to clients.

Because information is now a commodity, law firm clients will no longer pay for online legal research. New flat-rate pricing models for online research products reflect this reality. The information itself has always been a commodity: it was just limited to hard-copy form in the past. Back then, lawyers understood that the cost of maintaining a library was no different from the cost of keeping the lights on: it was overhead, and the expense was considered when the lawyer set a fee for services provided. Conversely, as the ABA materials demonstrate, today, many lawyers (with the encouragement of West), are divvying up the cost of their legal research subscription plan amongst their clients.

The large legal publishers are in trouble. If law firms can no longer pass through online research costs to clients, multi-billion dollar legal publishers such as West and Lexis can no longer support pricing models premised on law firm cost recovery. This is refuted above. And, while I don’t keep up with the financial health of the two 800-lb legal research gorillas, I don’t see them going out of business any time soon.

Like it or not, Mr. Schwartz, Knowledge Mosaic isn’t the disruptive entrant into the legal research market that you try to paint it as. Following in the footsteps of West (and, to a lesser extent, Lexis), the company does many of the same things that these traditional legal publishers do:

stored search capability (Westlaw’s Alert Center, anyone?)
on-call customer support and research assistance “during regular business hours (typicially with no wait)” (Hello, 1-800-REF-ATTY, 24/7)
search pages that allow you to target data buried in filings, including risk factors, exhibits, etc. (searching by field)

Based on the information on the Securities Mosaic website, the company has done a great job fulfilling the information needs of a niche market within the legal community. If it can do that better than Lexis and Westlaw, fantastic. But, despite its location in the trendy “industrial underbelly of Seattle—in modern facilities amidst train yards and commercial fishing docks,” it’s really not all that, just as Axiom is a dandified contract lawyer staffing firm, and not the “entirely new kind of firm” it bills itself as. But that’s another rant for another day.

The Cost of Your Online Legal Research Subscription is Your Overhead—Don’t Pass it Through to Your Clients

May 10, 2009 by Lisa Solomon 3 Comments

Last week, the National Law Journal reported that a California plaintiff’s lawyer has filed a class action suit against Chadbourne & Parke, alleging that the firm engages in a pattern and practice of billing its clients based on hourly rates charged by online legal research providers, even though the firm actually pays a flat rate for its legal research subscription.

According to the complaint, between October 2004 and May 2005, Chadbourne charge the named plaintiff, Texas businessman J. Virgil Waggoner, approximately $20,000 for legal research fees. Waggoner alleges that the charge should have been closer to $5,000.

The complaint alleges causes of action for violation of Cal. Bus. & Prof. Code §17200 (unfair business practices), unjust enrichment and fraud.

As the article points out (and as my research has confirmed), a firm may recover online legal research costs from its clients, and may even profit by adding a markup to those costs, as long as the client has agreed to such an arrangement. If Waggoner’s factual allegations are true—and, based on Chadbourne’s transparent effort to paint Waggoner as nothing more than a disgruntled former client by pointing out that Waggoner brought the California action only after his New York malpractice suit was dismissed and after the firm sued him for unpaid legal fees, I suspect they are—this suit is a cut and dried case in which a BigLaw firm desperately trying to prop up its PPP will finally get its well-deserved comeuppance.

But, although the article about the Waggoner case prompted me to explore the issue of recovering online legal research costs from clients, that case isn’t what got me all riled up: what’s upset me is what I discovered in the course of my further research.

I knew that the ABA’s GP|Solo Division had addressed the issue of recovering online legal research costs in a recent GP|Solo article as well as in a CLE session at last year’s National Solo & Small Firm Conference. So it was no surprise that my investigation into the issue quickly brought me to a page on the ABA’s website, where the Division has collected a number of resources about recovering the cost of online research. Since Thomson Reuters is one of the primary sponsors of the GP|Solo Division, the Division’s interest in this issue is, shall we say, understandable.

Since I didn’t get a chance to attend the cost recovery CLE at the NSSFC last year, I decided to watch the session online. Now, I owe a great debt to the GP|Solo Division (sponsors of the Solosez listserv, which has been critical to the success of my law practice). Many of my closest friends and colleagues are very active in the Division. On a personal level, I like Keith McLennan, who presented the cost recovery session (and, to be honest, I’m not even sure that the contents of the session reflect his personal views—he may have been roped into presenting the session because he is a past chair of the Division). I’m even a big fan of Westlaw (as opposed to Lexis, at least). But I was disgusted with the rationales advanced for recovering from clients a cost that is part of a law firm’s overhead.

McLennan explains that lawyers used to consider the cost of online legal research to be part of overhead. As such, that cost was one factor lawyers took into account when setting their hourly rates. But ever-increasing hourly rates led to pushback from clients, he explained, so some firms have decided to recover the costs as disbursements.

The efficiency rationale also looms large. Under that line of reasoning, clients benefit from the use of online legal research because a research project that might take a lawyer using actual books five hours to complete can be completed in much less time using online legal research.

Then there’s the fairness rationale. Since a lawyer might use online legal research resources more for some clients than for others, says McLennan, it’s not fair for all clients to pay an hourly rate that is inflated by consideration of the cost of the lawyer’s online legal research subscription.

Of course, under this same reasoning, lawyers should be recovering from their clients the proportional cost of any tool that comes with a flat monthly fee. Do you pay a flat rate for long distance calling? By all means, go after your clients for their proportional share of your phone bill. After all, clients benefit when a lawyer can quickly resolve an issue over the phone, instead of writing a letter (which arguably takes more time and comes with its own associated overhead costs). And, since a lawyer talks to some clients more than others, it’s not fair for all clients to pay an hourly rate that is inflated by consideration of the cost of the lawyer’s long distance calling plan.

I’m not suggesting that lawyers should never bill clients for extraordinary expenses incurred when the lawyer must use a resource that is outside the scope of a reasonably broad flat-rate plan: I do it myself. As a legal research and writing services provider who lives in New York and serves clients nationwide, I maintain a Westlaw subscription that gives me access to all federal and state cases, statutes and regulations; law journals; and many New York-specific secondary sources. Through Westlaw’s ResultsPlus add-on, I also have access to an almost unlimited number of secondary sources that are relevant to the issues I’m researching. Nevertheless, on extremely rare occasions, it’s necessary to go outside my subscription plan. Sometimes I eat that cost; other times, I explain to the lawyer I’m working with why it’s necessary to go outside my plan, and obtain prior approval to incur an out-of-plan disbursement, which I then pass on to the lawyer at cost.

Still, cost recovery should be the exception, not the rule. Don’t nickel and dime your clients: when setting your rates—whether you bill by the hour, charge a flat fee, or use any other billing arrangement—take into account all of your overhead—including the cost of your online legal research subscription.