Strategic Librarian

Using strategy to develop the law firm library.

Making Budget Season Easier than Not

Anyone responsible for creating and managing a library budget knows how difficult those tasks can be. Whether firms are large or small, there is probably a focus on tracking how much a practice or office costs the firm against what they bring into the firm.  For the firm libraries, this means budgeting by practice or office or both.  Additionally, as librarians we want to know the dollars being spent by new purchases, serials (looseleaf services and periodicals), electronic resources, and more.  Finally, we may have separate budgets for resources treated as overhead and those (e.g., Lexis, Westlaw) where we attempt to recover the expense.  With all this complexity, is there a way to simplify the process?

Over the years, I’ve had a debate with another consultant (and friend) regarding the acquisitions modules in library management systems.  It is my contention that you can do a better job of managing budgets if you implement acquisitions, which doesn’t always happen in law firm libraries.  My friend has always believed that the firm’s accounting system will tell her all she needs to know.  While it is true that your accounting system can probably give you total numbers for any general ledger account, it can’t tell you how the money was spent beyond practice, office or the many accounts set up for budget purposes.

To me, managing a budget happens all year round and it is done more effectively by tracking what is spent at the title and copy level.  I agree that there is such a thing as diminishing returns where a smaller firm library may not get the value for the time that has to be put into this, but, generally, you have to track at a very granular level to get the best results.  You also should be using a library management system built on a relational database to get the best results.  So, what do I get for all this work?

If you are tracking costs at the title/copy level combined with office/practice, you will be able to produce reports that tell you exactly how much you spent during a given year on a print or electronic resource for a particular practice group in a particular office you will be able to:

  • Provide practice groups or offices with lists of the titles they pay for, while asking them to consider whether they continue to need the materials.  Yes, you could try to piece this information together from whatever records you keep outside of a library management system, but tracking expenditures in the way I describe is much more efficient.
  • Generate a budget, that isn’t total guess work, from the library management system.  If the system you are using is relational, you could create a budget report that replicates what accounting wants you to create.  Also, it should allow you to:
    • Move the annual cost for new purchases into the general ledger accounts the materials belong in for tracking costs the years that follow the purchase.
    • Identify the dollars that are no longer needed because of cancellation of resources.
    • Calculate the new budget using formulas that take a percentage and distribute it across the accounts.

In addition, if you are required to distribute the costs across months, you could track how the dollars were distributed in previous years and apply the monthly percentages to the new budget.

  • Generate monthly or quarterly reports that show you how you are doing against budget.

We installed SydneyPLUS at the last firm (500 lawyers) I worked at and freed ourselves of the tedious hours of budget manipulation by setting up the budget in the way I describe above.  Our Technical Services Manager led the project working with a library staff member who was proficient in SQL databases and Crystal Reports.  We still had steps to take to update the data, before we ran the report. that were documented in a procedure that was updated year to year.

I realize that this may not be for everyone but I would urge you to think about how to improve your budget process.  Besides the benefits listed above it:

  • Reduced staff time spent on the budget process
  • Created more accurate reports
  • Demonstrated that we took the budget process seriously and that our budget request was supported by sound calculations

You need to do quite a bit of planning and implementation up front for this so you might think of working on making the 2009 budget year process easier to manage when you get 2008 out the door.

Do you have thoughts on this budget process or others?  I welcome you to post a comment even if, like my friend, you disagree.

Full disclosure:  While I was once a client of SydneyPLUS’, they are now one of my clients.

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