Why Recovery Rates Really Matter

By Michael Feit | Best Practices

Jan 18
For the majority of firms that still pass through costs, the true cost is not what you are paying to Lexis or Westlaw.  Instead, the true cost is what the firm was unable to pass through to clients.
 
If a firm is forecasting future recovery rates >80% for either Westlaw or Lexis the business case will show that elimination is not worthwhile. The closer a firm is to passing through and recovering 80% of the costs, the opportunity for savings derived from the elimination of a vendor is essentially eradicated. When recovery rates are high or the negotiated rates with Lexis and Westlaw are low, the costs to replace content and build workarounds, coupled with the hassles involved, would likely negate much of the benefit of going sole provider.
 
Beyond knowing what is the firm’s true costs and recovery rates today, does the firm have a projection for the future?

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