All Posts by Michael Feit

About the Author

Michael Feit earned his J.D. from the Loyola University School of Law in Chicago and was an executive at Westlaw before founding Feit Consulting 16 years ago. Feit Consulting partners with law firm administrators and legal information professionals to optimize vendor contracts and the management and delivery of legal information resources by providing leading-edge, customized solutions. Contact Michael at mike@feitconsulting.com

Aug 05

Is the Tide Turning in Summer Associate Vendor Preference? Our Survey Results Are In!

By Michael Feit | Feit Consulting

One of the key indicators for predicting vendor success year after year has been the preference of incoming summer associates for Westlaw or Lexis.  For the last 5+ years, Westlaw has overwhelmingly been preferred by incoming Summer Associates.

Feit’s 2019 Summer Associate Vendor Preference Mini-Survey results show that the tide may be turning. 

We asked U.S. law firm research departments to participate in a survey of their perception of Summer Associate legal information provider  preference/awareness. 

Our survey results show that, although Westlaw has maintained its dominance in regards to the awareness and preferences of incoming associates, Lexis is moving the needle.  According to the survey, Summer Associate preference for Lexis doubled - from 15% last year to 30% this year.

Check out a sneak peek of some of the data collected: 

Lexis’ strategic push to concentrate on law schools is critical for them to successfully compete with Westlaw.  While 30% is an improvement, their academic program has a long way to go before Westlaw is dethroned.

Get the full details from Summer Associate Vendor Preference Mini-Survey - you can purchase here.

Jul 29

When the Recession Hits, Is Your Legal Information Budget Recession-Proof?

By Michael Feit | Feit Consulting

It is not a question of ‘if’ but ‘when’ will the next recession hit. Although there is debate to be had on a potential timeline, a cloud of uncertainty hangs in the air whether 2020 might be when we see another recession.

Now is the time to be asking the questions:

  • What lessons were learned from the 2008 recession?
  • Is your legal information budget recession-proof?
  • What can we do better now to be better positioned in the face of the next economic downturn?

A lot has changed since 2008.  Prior to the previous recession, law firms generally retained both Lexis and Westlaw and were able to pass-through and recover >80% of their costs. However, since the recession, all of that has changed.  Online cost recovery has dropped to <35%, vendor products have proliferated and pricing has become increasingly secretive and complicated.

We’ve been working with clients to provide a recession-proofing of their legal information budgets for this very reason.  Like a good health check, the takeaways are valuable, even notwithstanding any negative market trigger events. 

We are analyzing and providing scenario planning under these circumstances:

  • Loss of attorneys
  • Loss of business/revenue decrease
  • Timelines for possible cut-backs at 10%, 25%, and 50%

Lastly, Feit experts are also providing recommendations that allow firms maximum flexibility in their planning.

If you’d like to learn more about how Feit can provide your firm with recession-proofing roadmap, please reach out to us here.

Jul 11

Edge: Failure or Masterstroke?

By Michael Feit | Feit Consulting

Our recent mini survey about Westlaw Edge and Lexis Context results are in, and it is interesting to compare the data to our forecast for Edge pricing. In our latest book, Optimizing Legal Information Pricing, we forecasted that roughly 20% of the market would purchase Edge within a year, at nearly 10% increases.

With almost a year under its belt, it appears that Edge adoption will be very close to our forecast. With 15% of Westlaw firms having already adopted, we think it is reasonable to expect that in the next 5 months Westlaw Edge will penetrate another 5% of the market.

The average Edge percentage price increase is slightly lower than the double-digit year-one increases we expected, coming in at 9%. Firms that have purchased the product are happy with it, but for the most part, they do not feel that Edge is a game-changer in the way that WestlawNext was.

So, has Edge been a failure or a masterstroke?

To understand the impact Edge sales have had on Westlaw revenue, we looked at the large law firm market segment (defined as firms with over 100 attorneys). We made some general assumptions about that population and for illustrative purposes, using a hypothetical average spend per attorney to come up with potential revenue impact for this segment. Please note this hypothetical does not match our actual price guidance for Westlaw. (You can find that guidance in our Optimizing Legal Information Pricing book here). Below are our assumptions:

  • 400 firms in the over 100 attorney segment
    • 80% of those firms have Westlaw
    • 320 firms have Westlaw
  • Average firm size is 250 attorneys
    • 80,000 attorneys total large law population with Westlaw
  • Hypothetical average spend per attorney for Westlaw in the market $175 per attorney per month
  • Hypothetical revenue to Westlaw for over 100 attorney law firm segment: $168 million

Our survey indicated that roughly 15% of the market has purchased Edge, which translates to 12,000 attorneys with the product. If their cost increased 9%, Westlaw's annual revenue grew roughly $2.2 million annually, or roughly only a 1.4% increase. If this 1.4% increase was the entire story, you'd probably call Edge a failure.

However, to really understand how well Westlaw has actually performed with Edge you need to consider who the real purchasers likely are. In our Optimizing book, we note that roughly 15% of the market is over-paying for Westlaw, by 150% or more. Although we have no way to correlate who each of those firms are, it is very likely that they are most of the early adopters of Edge. These firms tend to be early-adopters of all products and have less price resistance than the market in general.

If you assume that most of the early adopters of Edge have a spend per attorney that is vastly (>150%) above the market, Westlaw's incremental revenue grows to $6.8 million per year. This represents a 4% increase alone, just from Edge. If that is the case, Edge would be deemed a moderate success.

Beyond this, and likely the greatest impact to Westlaw is the ability to leverage Edge to lock-in and extend a majority of their highest-paying customers. Every Westlaw Edge discussion that is not a renewal (about 2/3rds) is a reason to drop into the firm and extend the agreement for another 3-5-year period, securing a very significant and otherwise vulnerable revenue stream.

In conclusion, although Westlaw Edge may seem to have had an unspectacular first year, the dollar value increase combined with the ability to extend existing contracts has bought valuable time for Westlaw to hold off potential threats from Lexis or Bloomberg - making Edge a masterstroke.

Jun 04

Mini-Survey: Westlaw Edge and Lexis Context

By Michael Feit | Feit Consulting

There’s a lot of buzz around Analytics/AI products like Westlaw Edge and Lexis Context—but to what degree are firms actually purchasing these products and, more importantly, are they happy with their purchase?  

We decided to find out! 

Last week, Feit Consulting launched a mini-survey to capture the reality behind the buzz—and the results are very telling already.  In a very short period of time, over 60 law firms (25% in the AmLaw 200) have participated in our survey.  This indicates to us that firms have a high degree of interest in understanding from their peers the value of these new tools.

An early result we can share is the percentage of firms that have Westlaw who have purchased Edge is roughly the same as the number of firms that have Lexis and have purchased Context: trending at 15%.

Context seems to be getting much more consideration, however, because of its much lower cost.  At this point 40% of firms with Lexis are actively considering Context

The proof in the pudding will be firms’ satisfaction with these products—we will continue to compile this data and will share the results with our survey participants.

If you and your firm want in on the complete data, participate!  All survey participants will receive a complimentary copy of the results —and participation takes less than 3 minutes.  The survey is open now and will close June 16th. 

Apr 16

Customer Sentiment vs. Pricing: Why are these not aligned?

By Michael Feit | Feit Consulting

One would think that customer sentiment and pricing would be like a dot-to-dot exercise with a straight line easily drawn from high levels of satisfaction to steady, if not incremental, year-over-year price increases. Instead, other factors like hitting the price ceiling and reaching critical mass with ancillary products also influences forecasted pricing.

This disconnect is what we found as a result of our analysis central to Feit Consulting’s 2019 Legal Information Pricing book.  When juxtaposing customer sentiment with the pricing forecast analysis, there are some striking discontinuities which at first glance, may seem even contradictory. 

The market, for instance, has a very favorable opinion of Westlaw; in fact, the most favorable opinion of any provider.

However, our pricing forecast went on to show Westlaw as the only product covered in 2019 Legal Information Pricing whose price will decline over the next five years.  How could this be?

Ironically, Westlaw’s consistent strong performance in comparison to Lexis, makes it extremely vulnerable.  Currently at nearly double Lexis pricing, the report fleshes out the unsustainability of this price gap.  In short, Westlaw–and the market–may have found its pricing ceiling.

Flipping the sentiment, on the other end of the scale, 32% of respondents were extremely or moderately dissatisfied with Lexis. However, this did not correspond with linear drop in price as Lexis now offers an array of products that most firms consider indispensable.  Lexis may have reached a 'critical mass' with well-used ancillary products that are creating different outcomes than expected. 

In terms of sentiment, Bloomberg is by far the biggest loser with 64% dissatisfaction.  However, our guidance indicates price growth for Bloomberg as they have important content.  In addition, the market now expects aggressive price increases.  As Bloomberg improves, we expect its pricing to stay competitive with Lexis and move toward Westlaw over the next five years. If you believe Bloomberg’s hype, its product will improve each year substantially and unlike with Westlaw and Lexis, and firms will not have to purchase add-ons as the product improves.

A comprehensive discussion is outlined in 2019 Legal Information Pricing.

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