This is the second article in a series of articles on managing law firm libraries in 2009. The previous article was on strategy – Using Strategy to Stay Relevant in 2009. This article will cover managing overhead expenses (those that cannot be recovered). The next article will be on cost recovery.
Overhead expenses are the bain of any law firm. If you or the services/resources you provide are considered overhead (and you most likely are), you already realize that you will probably struggle with others in the firm misunderstanding your value. This doesn’t mean you should try your best to move everything from the overhead status.
Whether partners like it or not, they must incur some overhead costs to stay in business. I was visiting with the executive director of a firm when she told me, “XX (we’ll call him Rodney), the managing partner, thinks that the firm runs on thin air. He won’t authorize more staff or more resources but wants to run the firm as if it was still as small as it was years ago.”
While you may have known some Rodney’s in your work life, the fact is, air alone does not sustain a firm. Lawyers breathe life into a firm. I won’t negate that fact that they are the most important players in the law firm. I do, however, think it is time that the lawyers (even those that charge their clients four-figure hourly rates), need to take the time to understand how important a firm’s non-lawyer (I actually hate that term – but it is what gets used the most to describe us) professionals and staff are to the firm.
We can help the Rodney’s of the world get up to speed (or at least, we can try) by each of us individually seeing our contribution as an important one and focus on managing our department’s resources to move the firm’s goal forward. This includes creating or improving our focus on managing overhead. What does that look like?
Find a partner to act as liaison.
Having a liaison in each practice group or in each office if they are small, gives you someone who can communicate with when you need decisions made. They have more opportunity to speak to their fellow practice group members and will get more attention paid to the issue than most of us “non-lawyers” can.
The liaison should be a partner as an associate may be ignored when making decisions others don’t like. Once you have buy-in from your management, approach group leadership with the request that they assign someone to the position. Other ideas to consider:
- Develop a job description and procedure manual to use when talking to leadership or the individual selected to work with you. It will also help build some consistency in how this position works from one practice group to another.
- If you aren’t already doing so, create an annual budget that allows you to identify your purchases and payments by practice group and/or office. I would suggest the following:
- Office – Practice Group – Type of acquisition or payment (new purchases, serials, standing orders, electronic subscriptions, etc.) OR
- Practice Group – Office – Type of acquisition or payment
- Whatever you decide, you will need to make it work within the confines of your firm’s budgeting process and general ledger accounts and your firm’s needs depending on size. The advantages this type of budget is that it gives the firm makes the offices and practice groups (or whatever divisions you have) responsible for the library collection the firm has purchased on their behalf.
- If possible, meet with the liaisons quarterly to review possible cancellations, etc. Work to develop a relationship with each of them where they see you as an asset to their group and they have a “we’re in this together view of the assignment.”
- If the individual the practice group selects to work with you is less than effective, try to get the position reassigned. Getting a partner assigned to this type of work will be a lot easier if you go to the group leadership with an idea of who you think would do the best job. Have a few names selected as the group’s managing partner may have reasons not to agree with you. Be prepared.
- Don’t accept the group head as your liaison if you can do it. He/she may think this is an easy assignment that they can do along with their other administrative duties. Disabuse them of this idea as experience has taught me that they will not have the time to do the work or may not be as available as you need them to be.
- Make sure the group head and liaison understand that they aren’t there to make decisions on their own (especially when it comes to cancellations) – they need to talk to other members of the group to be able to make good decisions.
Think of budget cuts as opportunities.
I think I’ve mentioned this before but it is worth mentioning again. I worked in a library where the management would ask us to reduce the collection budget by 10-20% every other year. While this sounds like a problem, I learned to view it as an opportunity as there were always materials that had been purchased for a certain case or looked like they would get use when they were purchased but, in reality, got little use.
To meet the challenge, we would create a report that listed each title in the collection along with the cost (whether we purchased it by subscription or standing order). In other words, that report had total cost per year for each title and each copy of the title.
For example, if we received four updates for a title that was updated by pocket parts, we would add up each payment made during the year for that title to create the total cost of that title.
4 updates @ $220 each = $880 total cost for the title
The report included both subscriptions and the titles where the payments were made per receipt of the updates. You can generate this from your library management system – more on that in another post.
Once the report was created, we would send it to the practice group liaisons for them to share with their group to make the decision of what to cut. The report makes it easier to have this discussion because they can see the titles in relation to what they cost and then determine if they use the resources enough to keep them. Also, if they can’t make the % cut that has been asked for, they will have better information for supporting keeping the materials regardless of the budget cuts the firm is seeking.
Consider what you can get from other sources and cancel/withdraw items that get little use
While the process I described above made it easier to manage costs, electronic resources have made it more difficult because of the expectation that firm leaders have that print materials are no longer needed. We all know that we haven’t reached a point where the electronic only library is a reality. Until we get there (I don’t think I’ll be here to report it), there are ways to manage the size and cost of your print collection while seeking to meet firm goals of reducing library size.
Start with the type of report I described above but add a few more columns as follows.
- Available on Westlaw
- Available on Lexis
- Available on HeinOnline
- Available on CCH IRN
- Available electronically from BNA
- Available at a local library where the firm has borrowing privileges
- Available on any other electronic resource you may use
While this list is being worked on – you may be able to get your vendors to work with you on it – check the shelves for books that are currently updated and is always on the shelf when you or your staff file new pages. Alternatively review the collection for items that are never on the shelves because of high use. I asked library clerks to work with me on this since they knew what was on or off the shelf more often than me.
Note what looks like the lack of use on your collection cost report with the pricing, etc. Now you have a list that will tell you and your liaisons what titles cost, whether they (anecdotectally) get used or not, and where they can be located should there be a need. This gives you good information for making recommendations and the liaisons ideas for discussing the collection with the other lawyers in their groups.
Be resourceful in finding other ways to reduce costs
There are many more strategies/techniques librarians have been using for years that can assist you in better managing the cost of your collections through out the year. Some of them listed briefly, include:
- Charge the client for the purchase of materials being used for individual matters and not added to the firm’s collection. Keep records that will assist you in canceling and withdrawing the materials when the research on that matter is completed.
- Keep track of how many individuals are on each routing list (for routed materials). If the lists drop below 3-4 individuals, cancel the copies you no longer need.
- Ask your users if they still want to receive materials that are routed or distributed to them. This includes subscriptions and the desk sets that can be so costly.
- Track usage of electronic subscriptions via vendor reports or by using counters available from vendor tools like Lookup Precision, OneLog, etc.
- See if you can borrow a new title before purchasing it to see if it is something that would really be used. Alternatively, order it on approval but be careful of doing to much of this as the work that needs to be done to process something on-approval is more time consuming and will use more resources.
- Use your library management system to reduce the time it takes for staff to order, receive, process, route, pay invoices and other tasks.
- Analyze how you can reduce overall costs on an annual basis if you have the staff to work on these types of tasks. You should be able to make a business case for additional staff if the benefit (reduction in materials expense) is greater than the cost of staff on an ongoing basis.
- Remember that making these changes will take time. Don’t think you can accomplish them all at once but, alternatively, don’t be defeated before you start.
Take heart and stay as positive as you can be about a downturn in the economy. It is much harder to get lawyers to make decisions about canceling materials that just aren’t being use when times are good. Downturns assist us with right sizing our collections and reducing expense that may no longer be needed.
If we approach managing costs by thinking strategically and being proactive, even the Rodney’s we have in our firm’s may very well start to understand the value of the firm spending money on the libraries and staff we manage.
I would be very happy to continue this post but it has to end sometime. Because there is more to say, I am hoping that those of you who have other ideas or best practices, will share your them by adding a comment or two.
Look for the next article in this series, Managing a Successful Cost Recovery Program, to be posted next week.