Jul 18

Optimal Contracts are Core to Delivering Value

By Michael Feit | Pricing

Do you truly know whether your contract has the best terms and pricing compared to the market?  How prepared is your firm for your next contract negotiation?

The number 1 priority of legal procurement is to better analyze and reduce legal spend according to the 2018 Buying Legal Council Survey.  What this means for law firms is increasing price competition and a resultant downward pressure on price.  Internally, this means every department within a law firm is under intense scrutiny to demonstrate value in terms of any business metric that measures how well the firm delivers client service at the most cost-effective price.

For legal information professionals, core to demonstrating departmental value is optimizing provider services and contracts.  One of the biggest mistakes we see are contract renewals without application of the right leverage and industry knowledge.  The value of firms’ online research platforms does not automatically increase 3-5% annually just “because”.  To pay increases annually, it would be expected that the firm is receiving more value, content or features than the year before. Complacency or lack of diligence in managing information resources can have long-lasting unfavorable implications on both processes and costs, thereby hampering overall efficiency.

Simply consider the recent and rapid changes in the market for online research providers.  It is unlikely that firms’ contract pricing and content are aligned with current products, strategy, and shifts in the market.  Resources purchased in the past may no longer provide the necessary tools to remain competitive and cutting edge today. Legal information needs are continually in flux and should be reviewed periodically.

An optimized budget delivers the financial resources necessary to take advantage of new and exciting offerings currently emerging in the market, such as new AI and analytics tools.  Having access to these products could be significant in creating new efficiencies and enhancing productivity at your firm. Asserting yourself in confidence, understanding your choices and making them clear at the negotiation table will ensure you reach the best outcome for your firm.

However, pricing knowledge alone is not enough to optimize pricing. Strategy and negotiation tactics are critical for success. Law firm administrators must understand their leverage and be able to utilize it a meaningful and timely manner. Gaining a clearer picture of your purchasing power is essential to achieving an optimized outcome.

Feit Consulting has developed detailed strategies and the industry’s most comprehensive benchmarking, that helps information professionals achieve the leverage required for successful vendor negotiations. You can see a preview of our comprehensive Optimizing Legal Information Pricing white paper here.  Want to discuss your firm’s specific needs or have your contracts benchmarked? Contact us at info@feitconsulting.com.

 

Jul 16

Sole Provider Adoption Trends: Key Data

By Michael Feit | Feit Consulting

Imagine if Lexis and Westlaw were new products today, offering your firm the same subscription price you already have. Would you really purchase both? Most of those informed on the topic would argue that these products are far too close in total content to need both. This duopoly paradigm has been in place since the early 90s and has been the norm since until recently.

Historically, firms could retain both Lexis and Westlaw because the majority of costs would be passed through to clients. The recession forever changed the dynamics of the online legal information market for both vendors and firms. Firms started to see their sophisticated corporate clients closely scrutinizing costs and refusing to pay for online legal research. Now that recovery rates have greatly diminished, firms are being forced to evaluate their need to retain both vendors.

Feit Consulting collected data on 389 law firms with over 100 attorneys in the US within the last year those firms provided relevant, decision-making insight on adoption trends, including this key data point: for the first time since the 90’s, the sole provider option has become the norm at most firms. See the charts below:

The historic growth of the sole provider trend amongst firms in the Am Law 200/100 has been growing rapidly from the early 2000s to today.  As a greater number firms continue to move in this direction, the validity and viability of this option has been reinforced.

For U.S. Law Firm email addresses only:

Curious for more?  Email Feit Consulting here to see how the sole provider trend breaks down by Westlaw and Lexis.

 

Jul 13

At AALL: Westlaw Edge Introduction

By Michael Feit | Feit Consulting

Thomson highlighted five major components that set Westlaw Edge apart from its predecessor, Westlaw Next:

• Enhanced search capabilities, with a new algorithm (WestSearch Plus) that looks beyond terms and at metadata and case citing relationships for more responsive search and a predictive question asking system.

• Warnings for invalid or questionable law, which flags both bad, outdated law and risks for overruling, even on cases that are not directly cited by a new case that changes the law.

• A tool for statutory change analysis, allowing comparison between versions of statutes and highlighting added and deleted language, similar to Microsoft Word’s tracked changes.

• Integrated litigation analytics, which employs machine learning and the company’s stable of legal editors to break down state and federal dockets for analysis by attributes like judges, motions, attorneys and more.

• “User Experience improvements,” such as synopsis-like case backgrounds, holdings, and more.

The new features are interesting/exciting but it’s not likely to come with a substantial upcharge. As you may recall in the introduction of Westlaw Next in 2010, the new platform was offered initially as a monthly upcharge. Eventually, (5 years plus) all hold-outs were moved to the new platform with no cost as Westlaw.com was sunsetted.

In its release of Westlaw, Thomson Reuters analysis showed that complex legal research tasks take an average of six hours, with some taking much longer. AI-driven platforms should reduce the time for searches and should improve the quality of the results. Firms want to be in an a flexible/nimble position to adapt to the rapid pace of change.

Jul 13

At AALL: Here Are Your 5 To Do’s

By Michael Feit | Feit Consulting

LexisNexis and Westlaw will, of course, dominate discussions at AALL this year as they have in years past.  With the recent pricing tactics taken on by Lexis (see Michael Feit’s take on this in Legaltech News here), and the big announcement from Thomson Reuters’ introduction of Westlaw Edge, there’s a lot to talk about.  Here are our 5 things to do to make the most out of your time in Baltimore:

Do:  Learn as much as possible about the AI releases and features.

There’s so much buzz around AI, it is difficult at times to separate the hype from the application.  AI is coming to library services and so we should all be learning as much as possible about its true potential. It is not surprising to see Westlaw finally get into the AI arena with the release of Westlaw Edge.  AI features will continue to erode consumption, and so the onus is on the provider to build those features into the platform to make them more valuable.

Do:  Learn as much as possible about the features of Westlaw Edge.

Do:  Learn more about the changes to BBNA platform and management.

Do:  Find out what your peers are thinking about the Lexis bundling tactics and the AALL’s inability to move them away from their position, despite the outcry.

Do:  Vendors such as Westlaw and Lexis are re-selling surveillance data to ICE and other government agencies.  Ask your vendor do you use our Firm’s legal search user data in their surveillance search platforms?

BONUS: Do NOT miss:  John Waters’ keynote address, we’re sure it will be fantastic and fun.

Jul 13

Wexis contracts? Now is not the time to commit to long-term

By Michael Feit | Feit Consulting

Whether you are attending AALL this year or reading the news from afar, we can guarantee you that the one thing to do right now is a ‘do not’: Do not enter into any long-term contracts.

Why lock your firm into a long-term price commitment in this rapidly evolving market?

Negotiating with the vendors can be a frustrating, drawn-out and often unsatisfying process. For many of our clients, negotiating ranks with tax-time on everyone’s list of fun things to do making the idea of fewer renewals sound enticing.

However, with rare exceptions, a long-term contract is among the worst paths a firm can choose for several reasons. One important reason seems obvious: change. Technology and pricing are continuously changing. You wouldn’t buy a plan that kept you from upgrading your phone for 5 years, would you? The legal information landscape is rapidly evolving with exciting acquisitions and new companies/products emerging. These products will continue to pull away use and interest in Lexis and Westlaw. It is always possible that one change in the market could make another product irrelevant. And as Artificial Intelligence rapidly gains momentum, there is much to be seen. What will the legal information landscape look like in 5 years?

Generally, a longer contract benefits the vendor. For legal information contracts, we always advise keeping the term to within your near- and long-term forecasts, generally 3 years or fewer unless you are receiving a truly exceptional deal.

How exceptional is the new proposal? What are the year over year increases? What additional benefits are you receiving for a longer-term contract? Perhaps your firm/organization deleted the vendor in the past and is seeking to reinstate, leading to pricing and terms that are best in market. Make sure they are, and not just because the vendor has told you so. Another option to consider is bundling. Bundling products together can be an advantageous for some. However, for many, a new contract bundle may be hiding unnecessary products or content that the firm or organization doesn’t need. Take a good look at the bundle being offered. It could be a great deal, or it might not, but in either case, it is worth investigating.

Jul 13

How to Not be Hostage to Your Vendor

By Michael Feit | Feit Consulting

By Michael Feit

The recently deployed pricing tactic by Lexis only served to add more heat to an already vigorous debate regarding the viability successfully operating with just Lexis or just Westlaw.  For the first time since the early 1990’s, retaining just one of these vendors has become the norm with 54% of large law firms having opted to retain only one vendor–and about 60% of those choosing Westlaw.

A vital takeaway from the current debate on pricing tactics is that no firm should be hostage to their vendor.  Well-established customers are, on average, treated the worst by their providers and receive the most unfavorable terms and conditions.  New technologies, including AI-based platforms, will continue to erode the consumption-based model, and for a host of other reasons, firms should place themselves in a position of having options.

In a perfect world, Lexis and Westlaw would publish retail pricing, and firms could pick and choose which products they wanted based on their practice needs and budget.  This ideal world does not exist today, as both vendors have discontinued standardized pay-as-you-go retail pricing. Instead all they offer is secret pricing and terms that vary greatly from firm to firm.

The good news is, there are options! You don’t need to be a hostage to your vendor if you have enough time to evaluate the options. The evaluation process in itself can prove fruitful, sharing pertinent information that can be used in the negotiation process.

There are a great number of elements to examine, from contracts to content, not to mention the strong reactions of users to fundamental system changes. Lexis and Westlaw have both successfully infiltrated law firms’ cultures and infrastructures over their many years of service.

The idea of transitioning to sole provider can be daunting, however, considering the many individuals and processes that might be impacted. There are a great number of elements to examine, from contracts to content, not to mention the strong reactions of users to fundamental system changes.  Lexis and Westlaw have both successfully infiltrated law firms’ cultures and infrastructures over their many years of service.

Yet, the pay-off in taking a deep look at these factors can be exceptional.  A mid-size US law firm with favorable pricing will spend well over half a million dollars annually to retain both vendors.  There was a time not long ago when firms could pass through online legal information costs to clients, making Lexis and Westlaw essentially free.  That is no longer the norm.  We have entered into a new paradigm.

Where to start:

  • Get the pricing intel to determine your pricing is favorable. Compare contracts with market intel in Feit’s white paper, Optimizing Legal Information Pricing.
  • Assess the viability of the sole-provider option. Evaluate the option at your organization. Develop a business case. If needed, check out this resource, The Sole Provider Playbook.
  • Execute and implement. Consider hiring a consultant to manage the process.
  • Exploring the sole-provider option is a healthy step in revising your legal-information strategy and can provide insightful information for contract negotiations. If you choose to do it alone, these resources are an advantage to legal-information decision makers on what steps and considerations should be made in the process.
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