Oct 01

Managing The Post-COVID Knowledge Resources Budget In An Era Of ‘Rogue’ Pricing

By — Jean O’Grady interviewed Michael Feit for Above the Law | Feit Consulting

Jean O’Grady interviewed Michael Feit for Above the Law on September 29, 2020. That article appears below.

Last month, Feit Consulting released a new report on the state of the market for major legal vendors Thomson Reuters. LexisNexis, Bloomberg Law, and Wolters Kluwer. Over the past 30 years, what was once known as the Computer Assisted Legal Research (CALR) market has been dramatically transformed by the integration of workflow, drafting, brief analysis, and analytics tools into knowledge-enabled insight platforms.

My interview with Michael Feit, founder of Feit Consulting, reveals how major legal information vendors have failed to adjust their pricing models to reflect the collapse of cost recovery following the Great Recession of 2008, when law firms faced a buyers’ market and CALR costs became almost 100% overhead.

According to Feit, the response of the two dominant players, Lexis and Westlaw, was to protect their revenue by eliminating “all usage-based pricing and published retail rates. From that point on, pricing from Lexis and Westlaw went rogue.”

As law librarians and knowledge managers prepare their firms’ post-pandemic budgets, Feit has shared insights and negotiation strategies in the interview that follows.

JO: How long have you been in the legal publishing industry?

MF: 30 years. (Wow!) I started my career working at Westlaw. I loved the experience. During the ’90s, it was so exciting and interesting being part of the paradigm shift in legal research from print to online. I finished the decade with Westlaw as Director of Large Law Firm Strategy. In that position, I could see the wide discrepancies in pricing already starting to emerge in the market, and I was advocating for a return to transparency. That is what prompted me to start consulting. I did not like clients being taken advantage of because they did not know the benefits other firms had achieved.

JO: How long have you been a consultant?

MF: I started consulting 20 years ago. I never thought the need for legal information consulting would endure this long. My expectation was that, eventually, pricing would have normalized and therefore need for consultants would diminish. Instead, pricing just got murkier.

JO: What has been the most positive change in the legal publishing industry?

MF: There [have been] many market-changing products emerging from new vendors and start-ups (such as Practical Law, Law360, Intelligize, Ravel, Casetext, Docket Navigator, etc.). Unfortunately, they are often acquired by larger vendors. It would be better for consumers if these new products could survive independently, but that isn’t the nature of the beast in this highly consolidated market.

JO: What is the worst trend that has a negative impact on law firm consumers?

MF: Ironically, since I benefit from it, the worst trend for law firm consumers has been secretive pricing. The need for consultants is largely due to the lack of transparent pricing. Secretive pricing truly hit its stride when the recession hit in 2008. Up until then, more than 90% of law firms had contracts with both Westlaw and Lexis. Law firms were able to afford to have both vendors as roughly 80% of online costs were being passed through to clients.

With the recession raging, firms looking to reduce costs started to only renew with one primary/preferred vendor and using the second one on a transactional basis, as a back-up. In response, to protect their revenue, Lexis and Westlaw decided to eliminate all usage-based pricing and published retail rates. From that point on, pricing from Lexis and Westlaw went rogue. Today, from firm to firm, prices for virtually all of Westlaw and Lexis products vary in an irrational way. Lexis, Westlaw, and, more recently, Bloomberg do not have price plans that can reasonably articulate how they arrive at pricing. This dynamic has had a very negative impact on law firm-vendor trust.

JO: Tell me about the timing of this year’s survey. Did you take advantage of the COVID disruptions to check the pulse of the market — or was it lucky timing?

MF: Both really. We usually field the survey in the first quarter of the year, but it became clear early on that 2020 would be a different kind of year. As COVID forced shutdowns everywhere and anxiety was peaking, we thought it best to let the dust settle a little. By early summer it had become clear that many of the adjustments lawyers and their firms made in response to the pandemic would be long-lasting, if not permanent. Postponing the survey by just a few months allowed us to ask questions to capture those changes and trends.

JO: What surprised you most about the survey results?

MF: I had expected to see a large number of firms who still had contracts with both Westlaw and Lexis looking to cancel one of these in their next cycle. I expected that more firms would be planning to cancel Westlaw — because it is so much more costly than Lexis. I was surprised the survey results showed that, instead, there are four times as many firms considering the cancellation of Lexis than Westlaw. Another interesting surprise was the endurance of print at law firms. The survey showed that pre-COVID, print still represented 18% of the average law firm’s legal information budget.

JO: What is the most important takeaway in planning budgets for the next three years?

MF: Everyone should use this moment to evolve past print and make sure there is a strategy to actually recoup some of the 18% spent on print. Also, try to avoid long-term contracts wherever possible. The market is too dynamic to lock in any one vendor. If you must lock in long term, make sure you have protective language, such as change of circumstances clauses.

JO: Do you anticipate any dramatic change in the legal information market over the next decade?

MF: The best opportunity for dramatic change would be the emergence of a viable competitor to Westlaw or Lexis; perhaps either Fastcase or Bloomberg.  I am hopeful.

Sep 22

The End of Books is Here—What Are the Steps to Take Now?

By Alex West | Feit Consulting

By Alex West l  Feit Consulting

COVID-19 has transformed the law firm market.  One of those significant, industry-wide changes is how COVID has essentially put an end to books.  The good news is, placing focus now on the diminishing value of print creates a valuable opportunity for your firm.

Non-digital assets which cannot be accessed remotely have been rendered useless. Even for in-office professionals, librarians are faced with challenges, such as potential new costs and disruption to sanitize shared objects such as books.

We’re seeing the data tell the story in our recent legal information market survey.

We asked respondents how much print made up the budget prior to COVID and what will happen after COVID. We were surprised by the enduring legacy of print. On average, print made up 18% of the current total legal information budget, down from 30% over the past 5 years.

Then, we asked respondents how their print collection budget has changed over time. We noted a significant decline in print, but we were once again surprised by print’s enduring legacy as shown below:

  • 1/3rd of our respondents said that 20% of their current budget is for print products.
  • 5 years ago, that same third of the market was spending 30% of its budget for print.

Finally, we asked respondents about their plans for print collections post-COVID, over 90% said they are getting rid of all print whenever possible.

90% is huge.  Many of those surveyed noted that savings won't be achieved in the first year due to print contracts and print retention clauses. Foreseeing the end, the vendors with a large legacy investment in print, have slowed law firm cancellations of print, by creating obstacles to elimination:

  • Lexis utilizes print and off-line retention clauses to effectively handcuff firms, penalizing them for canceling print.
  • Westlaw's LMA, probably the most successful cancellation inhibitor gave firms a substantial discount to keep print and provide 'price protection' (against Westlaw's own price increases).
    • Firms without LMA's saw their print costs rising >11% annually.

Our survey showed 57% of firms still had LMA's with Westlaw, indicating that many firms have substantial print and will have to wait to receive savings due to their contractual obligation to pay for print for a certain period of time.

The expiration date for print is now Getting rid of something as ingrained as print can be difficult - especially during stressful times. But doing this exercise now is important.  What are the next steps?

  • Collection Review
  • Roadmap to a Future without Print

Feit's library team is ready to help. There are tremendous cost efficiencies available to firms that make this transition effectively. If you'd like to learn more about how Feit is helping its clients, click here to set up a meeting.

About the Author 

Alex West, M.B.A., Senior Vice President

As Senior Vice President, Alex guides client interaction and strategic direction for the Advising group at Feit Consulting. With an extensive corporate background in management and marketing at Fortune 500 companies such as Sara Lee, Hasbro and P&G, Alex oversees all Feit client engagements. With Feit Consulting's analytics and deep knowledge base in the legal information market, Alex optimizes customer experiences with strategies tailored to each Firm's individual needs.

Sep 21

Introducing Katie Leonard – Feit Consulting’s new VP Information Management Services!

By Michael Feit | Feit Consulting

We are thrilled to welcome Katie Leonard to Feit Consulting as Vice President, Information Management Services this week.  Katie is a highly regarded information services professional who brings an impressive 20+ years of experience from her executive tenure at both law firms and law firm vendors, including Thomson Reuters.  Katie will lead Feit Consulting’s Contemporary Library Solutions initiatives.

Now that much of the law firm workforce is distributed in various work-from-home scenarios, law firms are looking for new ways to restructure operations and services as they adjust to the “New Normal” model.

What Feit is hearing from its law firm and corporate partners is that management needs expertise and industry-wide metrics to  help guide their decision-making during these operational restructurings. Katie’s expertise on our leadership team puts Feit in a unique position to provide that.  In addition, Feit can provide information professionals with a wider range of advising to help them understand the value of their information resources.   

Katie comments, “I am delighted to be joining Feit and to support law firm librarians’ needs for market data and strategic decision-making.  The way information is consumed continues to evolve, bringing with it both challenges and opportunities.   Feit has the expertise, knowledge and insight to advise librarians in this dynamic market.”

We’re excited to bring on someone of Katie’s caliber to lead our library solutions initiatives.  Right now, firms are under stress with the urgent mandate to restructure.  Librarians need a data-driven business plan to help them successfully navigate their firm’s unique information needs in both the short and long terms—and we know that Katie’s leadership and insights will be invaluable for our clients towards that end.

Please join me in welcoming Katie to the Feit Consulting team!

Jul 20

Feit’s 2020 Legal Information Vendor Market Survey: Some Surprising Early Results

By Alex West | Feit Consulting

By Alex West l  Feit Consulting

Market volatility and economic uncertainty is affecting law firms and decision-making across departments.  That is why we are so excited to have recently launched our annual Legal Information Vendor Market Survey, to better understand how this fast-changing market might be affecting purchasing for legal information products.

We are very pleased to have received responses from over 70 law firms to the Survey so far—but what is really getting our attention are some early signs of dramatic shifts in the market - in just the past 18 months since our last Survey.

 Take a look below at the changes in Vendor Satisfaction - since our last survey in 2019:

It was also interesting to see how the market is allocating legal information budget by vendor: 

On top of this, we have asked our respondents to look into their crystal balls to forecast how their budget allocation might change in 3 years – but to learn the answer to that question - and many more - you must take the survey!

Just as in 2019, participants who complete the survey receive a full copy of the final results - plus this year we've added the chance to win a $100 Amazon gift card.

Feit is giving away a gift card to 1 of every 10 participants - so your chance of winning is very high. With roughly 70 responses so far, we will be giving away at least $700.

 We hope you’ll be a part of this year’s survey. Participation is open now!

About the Author 

Alex West, M.B.A., Senior Vice President

As Senior Vice President, Alex guides client interaction and strategic direction for the Advising group at Feit Consulting. With an extensive corporate background in management and marketing at Fortune 500 companies such as Sara Lee, Hasbro and P&G, Alex oversees all Feit client engagements. With Feit Consulting's analytics and deep knowledge base in the legal information market, Alex optimizes customer experiences with strategies tailored to each Firm's individual needs.

Jun 17

Feit Consulting’s Annual Legal Information Vendor Market Survey is Now Open!

By Michael Feit | Feit Consulting

As economic pressures and the effects of COVID-19 increase, how will those changes affect law firm budgets and decision making for its legal information products?  Will law firms be able to justify retaining two generally redundant and expensive products—Lexis and Westlaw?  How will the current business climate affect pricing decisions of the four major service providers?  Will the 2019 pricing gambles of major information service providers pay off as firms scrutinize service providers, or will they trigger a tipping point under new market pressures?

There’s never been so much uncertainty as US law firms prepare forecasts.  With so many unanswered questions as we enter the second half of the year and budget season, it’s a great time to see what is on everyone’s mind.

That is why we are excited to announce that we have opened participation in our annual Legal Information Vendor Market Survey and we invite you and your firm to participate!  In this dynamic environment, we can’t wait to see what this year’s Survey reveals.

As always, participants in our annual survey will receive a complimentary copy of the results - so you can see what your peers are thinking as well.

The 2020 Legal Information Vendor Market Survey gives you a chance to share your viewpoint on vendor sentiment and satisfaction, interchangeability of products, client recovery, and your price expectations for Westlaw, LexisNexis, Bloomberg BNA and Wolters Kluwer.

This year’s Survey delves into what new ways firms may be using legal information, including:

  • What will happen to print - will this be the end?
  • How will firms change their product mix going forward?
  • Which vendors will gain market share - and which will lose?

Participation is open now through Friday, July 10th - click on the button below to start:

Remember: only participants will receive a complimentary copy of the results, providing you and your firm with decision-making insights. 

Jun 01

Now is the time: Take control of your library

By Becky Bowman | Feit Consulting

By Becky Bowman  l  Feit Consulting

There were countless times over the course of my career as a law librarian I wished I could have stayed home and worked.  I recall cold icy mornings or bad hair days that made me long for the comfort of my home. Over the past few weeks, those wishes have come true. If your firm or company is forward thinking, some of you may have worked from home pre-pandemic as all firms are now dealing with staff working from home.  

For researchers, working from home has most likely been a smooth transition—and may continue to be. A request comes in, researchers are able to access needed resources electronically and begin to work on what will become the end product for the attorney; barring any sustained technical issues, the process is seamless.

But what about the physical library? The mail hasn’t stopped coming. Every day, it brings books, journals, newspapers; not to mention invoices and the thousands of advertisements vendors send out. How does all this get processed and how much money is being wasted as these books, journals, and newspapers pile up and collect dust?  

One of the main unfortunate side-effects of the pandemic has been economic, putting extreme financial pressure on many law firms. When there’s pressure on margins, management almost always comes to the Library/Resource Center with budget cuts. And as we look at the possibility of returning to the office, law firm leaders will be looking at that office overhead - one of the top expenses after salaries - and wondering:  do we need all this space?  What is the right balance of in-office and at-home staff?  Time will tell, but now is the time to evaluate your library and the direction it needs to take going forward.

To make sense of all this, librarians might want to consider engaging a consulting company. A consulting firm - if it’s unbiased - can help you gather information objectively and can make life a little easier for you and help you produce better results. An objective evaluation of services, resources, and operations will produce a clear picture of best practices and steps for moving forward. Most importantly, a consultant can help put you in a proactive position, offering solutions to management in a changing world.

If you would like to learn how Feit can help your firm look at the full picture and assess your library, reach out to us here.

About the Author

Becky Bowman, Law Library Consultant 

Becky served as the Chief Research and Information Analysis Officer for Am Law 100 firm, Baker Donelson for 32 years where she ultimately led a team of 5 to serve 750+ attorneys across 23 domestic locations. Becky's accomplishments at Baker were multiple, including transforming the library from print to digital, overseeing the efficient combination of 15 mergers and acquisitions of library materials, and successfully rebranding her department, and achieving buy-in from key stakeholders. Her exceptional experience is invaluable for clients as they assess the actual total cost and value of their library and research department including current print and digital collections, vendor contracts, as well as consider cultural and workflow disruptions or benefits in moving to an outsourcing vendor.

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