Dec 07

Will Westlaw’s Edge be Undone by its Pricing?

By Michael Feit | Feit Consulting

In July, Westlaw launched its AI-technology powered, predictive legal search tool Westlaw Edge.

Westlaw has long been considered the leader in comprehensive legal information services, providing a comprehensive package of services at premium prices. Early results of our annual market survey show a continued high level of satisfaction with Westlaw:

However, despite their popularity, the survey also shows that many firms are going to postpone consideration or adoption of Westlaw Edge until the pricing falls.   To date, less than 20% of firms who have responded have noted that they intend to go forward with Westlaw Edge in the next 12 months.

Compounding the situation, Westlaw Edge is entering the market at nearly the same time that LexisNexis and Bloomberg BNA, are competing with their own enhanced AI products, with similar technologically advanced features.  In the case of Lexis, their pricing tends to be much lower than that offered by Westlaw, and as a result Lexis is likely to be more palatable.

When competing products include many of the same analytical features, pricing becomes more important.  Westlaw is fine with only 20% of customers purchasing Edge at the high, introductory price as it stands to see a considerable increase in revenue due to this.  Westlaw is risking that firms will try the AI alternatives at a lower price and Westlaw will lose future business altogether.

As law firms are experiencing long term downward pressure on price, the Edge pricing strategy is out of synch.  There are myriad stories of market dominant companies that don’t heed the call of price sensitivity or shifts in the market place – Sears, Blockbuster, Blackberry, remember Kodak? To regain market share, Westlaw’s competitors–principally LexisNexis–have made adjustments, not only to their prices, but also to their product offerings.

Due to Westlaw’s tremendous product loyalty, prices have grown to a point where their customer’s are being forced to try alternatives.  Edge could help Westlaw retain its popular position if pricing was perceived to be less aggressive.

Share your thoughts on Westlaw Edge and the market!   Our Survey is closing in just over a week on December 15th and all participants receive a complimentary copy of the full results.  To join, start here.

Dec 07

Edge Put in Context

By Michael Feit | Feit Consulting

It’s almost difficult to recall pre-2008 when law firms were able to pass invoices and include back and middle office costs through to clients and clients paid, a world where a law firm would rather have some overlap between providers, say its research services vendors LexisNexis and Westlaw, than to be without any niche product, no matter how esoteric.

Clients were paying the costs for the most part hence the ability for firms large and small to have dual information service vendors. Things changed, as we all know so well.  Downward pressure on price brought margins down to razor thin levels and not just tremendous pushback on recovery, but the law firm’s own C-suite needed to push lean efficiency in every department of the firm could not afford that kind of lux decision making any longer—thus giving rise to the sole provider trend.

The sole provider trend reached an all-time high last year at a remarked 68% of firms going sole provider and 62% of those firms having opted for Westlaw.  However, our survey’s preliminary results are showing that change is afoot!  In fact, firms who dropped Lexis for Westlaw are seeing Lexis come back with pricing and services so attractive, that firms are taking them back!

Westlaw’s price increases may have proved to be short-sighted, and overconfident.

Context, the new tool recently launched by Lexis Nexis rolls in much of the features from Ravel Law.  Using AI and machine learning to power visualization technology, provide quantitative data and anticipate behavior.  Context delivers a seamless search experience, allowing lawyers to access analytics within Lexis Advance. Cumulatively Context’s research functions and solutions deliver a compelling, competitive alternative to Westlaw Edge.

Perhaps more importantly, LexisNexis has not only kept up with its competitors in features, but we anticipate that Context will be offered at a considerably lower cost than Edge.  While Westlaw is focused on price-protection, Lexis is striving to grow market share and increase product adoption with more reasonable pricing.

We can’t wait to see how the data plays out in this area.  If you haven’t participated yet, there’s still time.  The Survey is closing on December 15th and all participants receive a complimentary copy of the full results.  Start here.

Nov 15

Inside Bloomberg BNA’s Fall Pricing Surprise

By Michael Feit | Feit Consulting

This article appeared in Legaltech News on 11/13/18.

By Michael Feit

This fall, law firms who subscribe to a handful of BNA reporters and electronic newsletters are receiving a surprise: renewal proposals with unexpected price increases. This comes on the heels of the discontinuance of key products these firms rely on. Early reports from law firm information professionals are describing the proposed price at a substantial 30 percent, 40 percent, or even 50 percent. To justify the upcharges, BBNA clients are being forced into unplanned upgrades with either full or limited BLAW access.

This had not been the standard for BBNA, although it is reminiscent of tactics by their competitors Westlaw and LexisNexis. Up until recently, Bloomberg had abstained from aggressive pricing negotiations. The cost per seat for Bloomberg products may have been high, but annual price increases were within standard range and the prices themselves were more or less transparent. This policy change indicates that BBNA has not been successful illustrating to firms the value of their products beyond what firms may already be receiving from Westlaw and/or LexisNexis.

At certain firms, Bloomberg has the ability to leverage the high value and regard for a small set of their content, which is now enabling them to be more aggressive in negotiations. How far can BBNA push the market and their prices before people walk away?

BBNA is also presenting firms with confusing options, bundling completely different arrays of products, pricing and terms. Firms are reporting that it is taking weeks just to understand the proposals. In addition, when the bundles are fully understood, many are realizing that none of the options actually meet the firm’s needs—and all deliver a big bump in cost. Bloomberg knows that many of these reporters are deemed essential, and this allows them to apply unprecedented pressure.

With no significant advance warning, firms have little recourse in this round of negotiations. Firms have few immediate alternatives, although they exist to a degree thanks to competitors like Wolters Kluwer. With no warning, and no time to negotiate, research or prepare, de facto options are essentially nonexistent.

From a broader perspective, as Bloomberg has had little success penetrating the firm-wide market as a competitor to Westlaw and Lexis, it seems to have decided to leverage the strengths of its unique assets. However, it is unknown if this short-term thinking will be sustainable in the long run.

In the end, the outcome may resemble what has transpired in other similar markets. Alternatives and new competitors will spring up. Customers will be on the alert to seek out more reasonably-priced options. And when the pain of these price increases—and presumably, additional increases to come—becomes too great to bear, firms will simply begin to walk away.

In the meantime, however, this rearguard pricing action is nothing more and nothing less than an information imbalance. It’s basic economics. Markets operate efficiently when everyone has a reasonable degree of information. In this case, Bloomberg currently has all the information and is leveraging that advantage (for now).

In our view, the worst response a firm could have is to default into accepting the new deal. The best response firms can have to these tactics is to increase their own information storehouse. Arming yourself with information about substitutes creates the best possible environment for negotiating, and if necessary, saying “no” is a negotiator’s best friend. This means taking steps now to determine whether the Bloomberg suite of products is absolutely essential, or whether there are alternatives to fill some (or all) of the resulting gaps.

Nov 14

How and Why Your Firm Can Make the Case for the Modern Library

By Michael Feit | Feit Consulting

Change is a constant in the legal industry.

Clients are not only applying tremendous downward pressure on price but are driving their law firms to provide more value.  And they want that value delivered faster – and cheaper.

These pressures affect the modern law library as it is a core component of any firm’s ability to deliver client value.  Firms know this, but are challenged to know where to start when investigating how their information services compare to peer firms.  Here are just a few of the levers law firm libraries need to assess:

  • Work-flow Efficiencies
  • Using Technology for Service & Process Improvement
  • New Generations of Research Tools
  • Showcasing Value through Metrics
  • Remote Access – Resources on the go
  • Inter-Departmental Collaboration

This assessment can best be accomplished with a thorough audit of the library to evaluate current practices.  A library audit can be performed internally, but results in these situations are often better achieved by a third party consultancy.  They not only bring an objective, unbiased presence to the audit process, but also deliver a broader, industry-wide insight.

When Feit Consulting leads a library audit, we deliver an integrated project approach.  Through a combination of surveys, interviews and site visits, we provide analysis and a comprehensive plan to enhance the delivery of legal information. Specifically:

  • Project meetings with firm.
  • Stakeholders are identified.
  • Surveys, interviews and site visits are calendared with key stakeholders.
  • Feit Consulting on-site visits include:
  • Review physical operations.
  • One-on-one interviews with: Attorneys, IT, Marketing, Administrator, Library Staff, Paralegal/Investigator
  • Key information is gathered including budgets, library AP, library shelf list, existing policies and other information as determined.

With these insights from library users, Feit industry experts perform a SWOT analysis, to understand current strengths, weaknesses, opportunities, and threats.  The SWOT analysis will identify those things that the library is currently doing well, as well as those areas where there is room for improvement.

A library audit requires some attention and time, but it is an opportunity for information professionals to ensure that they are deploying best-practices to maximize the value that the library brings to the firm.

Nov 13

Prepare, Pushback, and Pilot

By Michael Feit | Feit Consulting

As law firms continue to move towards digital research tools, reducing reliance on print, the management of vendors relations has become critical.

In the past several months, two of the main legal information service providers, Lexis and Bloomberg, have begun playing what can only be characterized as “hardball.” This particular game features major price increases, mandatory product bundling, incomprehensible contracts, secrecy and in general, the kind of tactics and hardball maneuvering that a scorched-earth litigator might recognize.  Faced with this new normal, librarians must come up with something new.   We suggest a 3 pronged approach:  prepare, push-back, and pilot.

Prepare: Do your homework, both internally and externally. Internally, look through your current library operation and understand what’s going on, in depth, and with metrics. Which services are used the most? Which aren’t?  Are certain resources no longer needed?  Which costs are being passed-through and recovered, and which aren’t? Are certain practice groups relying on a handful of resources?  Know how your library works, and what kind of financial and operational profile it presents to firm management.  Externally, take the time and make the effort to understand what’s going on in the marketplace. Talk to your competitors. Read the trade press. Use the information you have prepared yourself with to have your negotiating position ready.

Push-back:  Knowing what your limits are, and your bottom line you are ready to negotiate.  Critically evaluate any proposals against the knowledge you gained in the preparation phase.  If you don’t like what you see?  Push-back.  You don’t have to accept an information provider’s offer right out of the gate.  Work on getting concessions that meet your goals.  Keep in mind that this is a business negotiation and what was a cooperative relationship may turn contentious.

Pilot: Nothing enhances negotiation outcomes more than having an alternative – a way to say “no.” Find out in advance what these alternatives are, pilot them, and find out firsthand if they work for your firm.  Technology and information are moving faster and faster, as well as being more and more available.  New information resources and tools are continually emerging in the market.  Much of the information you’re currently paying for may well be available from alternate sources, at much better prices.

Taking the time to Prepare, Push-back and Pilot will equip you for even the toughest negotiations and help insure each end-result is optimized in your firm’s favor.

Nov 13

Law Library Strategy and The New Normal

By Michael Feit | Feit Consulting

Law libraries have changed over the last decade or so, collectively powered by a newly-articulated need to demonstrate both ROI and alignment with the firm’s overall strategic plan.

In making this happen, a good starting point is always understanding what strategy is in the first place.

“Strategy” like “love” and “honesty” is one of the most poorly-defined terms in the English language. That being said, a workable definition is that strategy is the determination of how you plan to win in a market or game or war with other players, by determining where you’re going to put your resources.

A law library has a limited amount of time, management attention, and most of all, budget with which to work. It can’t do everything, and it especially can’t do everything well. Given that it’s a zero-sum game, where do you focus your resources? What’s most important, and what’s not? There are two responses to this question, which have to work in concert.

First, know what the profession as a whole is doing. Your library has to have a strategy, and if it’s innovative or new to the firm, knowledge of general trends within law libraries gives you the data and ammunition you need to defend your strategy.  Know what’s going on with your peers and how they’re reacting to changes in the marketplace, in technology, with information providers in general.

Second, look at your firm’s strategic plan. How are they planning to compete? Where are they putting their resources? What practice groups, technologies, markets, initiatives are being funded, and which are not? Every law firm of any size has such a plan, either written or not, and the key to adapting to the new normal for law libraries is to be able to demonstrate how your library’s strategy (including expenditures and priorities) directly supports firm goals.  Used together, knowing what your peers are doing coupled with the firm’s strategy provides a very strong platform for defending your library’s over-arching goals.

If your current library strategy addresses both of these questions, you’ll have the answers ready and provide demonstrable value to your firm.

Feit Consulting’s experts can help you evaluate your strategy and show you how it compares to best practices in the market.  If you don’t have a strategy, we can help you develop that too.  You can reach out to us here with questions.