Strategic Librarian

Using strategy to develop the law firm library.

Justice Hunt, We Need To Talk About Your Views on Cost Recovery of Online Legal Research

1 Comment

j0303025A couple weeks ago Fulton County Daily Report and several law library blogs reported on a Nov. 7 court order where, according to those sources, U.S. District Court Judge Willis B. Hunt decided that:

Among the expenses Hunt disallowed was $93,960.67 for LexisNexis, Westlaw and Online Library Research, writing,

This Court is of the opinion that charging separately for use of a research service is akin to charging for the use of a case law reporter. That is, the research service is a tool, much like a computer or a pen, and this Court considers the use of such a service part of a firm’s overhead. … Moreover, this Court is aware that many firms pay a flat rate to Lexis and Westlaw regardless of their usage, and class counsel cannot claim such flat rate payments as an out-of-pocket expense.

See Class Lawyers Against Coke Get More Than $31.5 Million.

He went on to write:

[C]omputer-aided research, like any other form of legal research, is a component of attorneys’ fees and cannot be independently taxed as an item of cost in addition to the attorneys’ fee award.

citing Leftwich v . Harris-Stowe State College, 702 F .2d 686,695 (8th Cir. 1983) . 

See Billing Wexis Expenses, posted on BARCO 2.0 : Law Library Reference for a summary of that opinion.

The Value of Online Legal Research

I’m sorry, but I don’t think Justice Hunt understands the value of online legal research.  The value of online legal research is very different than the decision by a firm to attempt to recover costs and the clients decision to pay or not pay for the expense – although it does play into that decision. 

What do online resources do for us that case reporters don’t?  A short answer would be “a lot”.  For example an online resource:

  • Provides many access points– Where a case reporter is organized by citation, online resources provide the ability to search by citation, assigned classifications (a numerical topic index), full text and more.   Not to say that books are no longer needed.  Before starting to use an online resource, researchers should use treatises or encyclopedias/dictionaries  to familiarize themselves with a legal issue or point of law.  Note:  These “books” may be available in print or online. 
  • Reduces the amount of time a lawyer needs to spend doing research  –   Rather than an associate going back and forth between digest and case reporter which can be very time consuming, that same associate can start with online digests or full text search to find a case, KeyCite or Shepardize it, find more cases, check to see if it is still good law or if it has been overturned, and more.  Researchers still need to use the critical thinking skills they developed in school (and for which their firm charges their time) but they are now able to move through the materials more quickly.
  • Produces more complete research results – There was a time when the amount of time it took to do research using books, resulted in researchers not being able to find and review all of the case law that existed that may have been on point.  In fact, they were most likely limited in the resources they had available to them as well.  The computer has changed that.  There is still a need to stop at some point but researchers can use the computer to find and review the materials more quickly.
  • Contains overall legal research costs– Researchers who has been schooled in what the cost is for online research, how to be cost effective in doing legal research online, when to combine the online research with the use of printed materials, and who does the bulk of there research online, will be able to produce the same or better results as one using print only within the same price points.  In the end, their time billed to the client is reduced making up for the online resource cost   Note:  You might argue that many young associates don’t know how to research.  That is the responsibility of the firm that hired them.  If firms want to recover these costs it is incumbent on them to make sure their associates are well trained.  That just touches on the issue which would take another entire article to cover.

Using an online resource is nothing like pulling a case reporter and locating the case by citation.  It has the same content but it has so much more in terms of tools that assist researchers in minimizing the work they need to do for a client.  The combination of the lawyer and the computer is very powerful.  Something you just don’t get with print.

The Decision to Recover Costs

With those comments on the value of online research, I would like to turn to a firm’s decision to charge their clients for the use of online resources.  It isn’t an all or nothing decision as it may have been in the past.  There are many instances that the work done using online resources warrants charging the client.  Yet, there are some tasks completed with that same online resource where the expense of the searches and their results should not be charged to clients.

For example, if a researcher has a list of cases she would like to read, she could do so using an online resource much like finding a reporter on the shelf and photocopying it for later use.  When the work being done isn’t substantive, and the analysis is done by the lawyer after the case is pulled, it probably needs to be treated as overhead.

Conclusion

There are many more examples like this where a firm could make a decision not to charge the client.  At the same time, any substantive research done online, requires a set of complex tools that the firm chooses to use on the clients behalf reduces the time a lawyer will track referencing the client’s matter,  contains cost and improves the quality of the output.  If a firm incurs expenses while doing this work, the client should most likely be charged.  

To make the decision to charge, the firm needs to evaluate the work for which they will or will not charge their clients, develop a Cost Recovery Policy that includes statements about the value of online legal research and communicate that policy internally and externally. 

Note:  My company focuses on assisting law firm clients with knowledge, information and library management challenges including working with those clients to improve their cost recovery of online resource expenses while doing their best for their clients.

One thought on “Justice Hunt, We Need To Talk About Your Views on Cost Recovery of Online Legal Research

  1. Very insightful! Unfortunately the value of law librarians is as often overlooked as the value of online research.

    Like