Strategic Librarian

Using strategy to develop the law firm library.


5 Practical Thoughts on Rightsizing the Law Firm Library – Budgeting for 2016

The days of budgeting by determining what was spent last year and adding a percentage of that amount to each line item are long gone in the law firm library world.  We’ve all heard about the many law firms who have decided to downsize (I like to think of it as rightsizing) their physical library in an effort to get control of expense or in a move to using more online resources.  Some of you – no doubt – have experienced one or both of these firsthand.  If you haven’t, it won’t be long.

I’ve also worked on these types of projects as a consultant where I’ve gone through print collections and online subscriptions – making recommendations for cancellations, withdrawals, and at times, even purchases of print material if deemed necessary.  This experience combined with managing collections in law firms in the past has given me some insight into best practices for the task.  I’m guessing that most of what I share below will be steps you are already taken but I also hope you find something new to use as you take on budgeting and collection management in the future.

  1. Don’t go it alone
  2. Think of rightsizing/budget cuts as opportunities.
  3. Consider what you can get from other sources and cancel/withdraw items that get little use
  4. Be resourceful in finding other ways to reduce costs
  5. Create a collection development policy/plan for the future

 

Let’s start!

1. Don’t go it alone 

Having a liaison in each practice group or in each office if they are small, gives you someone who you 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:

  • 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.
  • 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.
  • 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.
  • 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 you aren’t already doing so, modify your annual budget to allow identification of library purchases 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
    • 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 makes the offices and practice groups (or whatever divisions you have) responsible for the library collection the firm has purchased on their behalf.
  • 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.
  • Following the rightsizing process, meet with the liaisons regularly to review possible cancellations, etc.  At best you would meet quarterly.  At least, conduct an annual review.

2. Think of rightsizing/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, the report 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 may be able to generate this using your library management system if it allows you to attach payments at a copy level.

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.

3. 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, 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 that I described above but add a few more columns as follows.

  • Available on Westlaw
  • Available on Lexis
  • Available electronically from Bloomberg BNA
  • Available on HeinOnline
  • Available on Cheetah
  • 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 by providing you with a report that indicates the various formats the titles come in.

Chances are if the books that are currently updated are always on the shelf when you or your staff file new pages, they are not needed in print if available in another format.  Alternatively review the collection for items that are never on the shelves because of high use.  I’ve 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.

4. 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.
  • Quit routing print materials.  If you have access to the titles through online sources you already subscribe to, route the electronic instead.
  • If you are still routing print subscriptions, 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.
  • If you continue to have the need to route print, 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.
  • Track usage of electronic subscriptions via vendor reports or by using counters available from vendor tools like Research Monitor, Lookup Precision, OneLog, etc. but remember that lack of use might also be due to a training problem so don’t cancel titles indiscriminately.
  • Purchase all new materials in electronic format if possible but if you are asked to purchase a print title, see if you can borrow the new title before purchasing it to see if it is something that would really be used and to determine how much duplication exists from this new title to others you have in the collection.
  • 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.
  • 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.

5. Create a collection development policy/plan for the future

You will find that going through the process outlined above will result in a number of decisions you can record that will become, at least, part of your collection development plan for the future.  Following are three examples of those decisions for subscriptions:

  • What format do you use for routing.  For example: It seems to make the most sense to route online resources rather than printbecause routing the print materials has always been fraught with problems.
  • What types of resources are available in online only format.  For example: Depending on the preferences of your firm’s lawyers, you may decide that all practice materials now available in print (think office copies or desk books) will be accessed online rather than paying for a print copy for each lawyer who wants one.  If you’ve added practice materials to your online services contracts, you might find that it is less expensive then you originally thought.
  • How long to keep print materials on the shelf. For example: Each material type will have their own retention guideline.  You may keep subscriptions that are indexed but not available via online collections for a few years.  On the other hand, if a publisher hasn’t indexed articles and the publication hasn’t been picked up by an indexing service, the value is limited and you may decide that those materials get discarded in 6 months or so.

These few decisions are just the beginning.  In fact, you will be amazed at how many decisions you’ve made that will allow you to create your collection development plan/policy without much further effort.

Conclusion

Take heart and stay as positive as you can be about reduced budgets and a dwindling physical library.  It is much harder to get lawyers to make decisions about canceling materials that aren’t being use when times are good.  A dictum to downsize/rightsize will assist with rightsizing your collections and reducing expense that may no longer be needed.  Better yet, don’t wait for the word from management to start the process.

If we approach managing costs by thinking strategically and being proactive, law firms may very well start to understand the value of spending money on libraries and the staff who keep them relevant for the firm’s practice.

Next Post – Managing Change during the Rightsizing Process


Managing Law Firm Library Overhead Expenses in 2009

j0308879This 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. 

Conclusion

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.


West Releases 3RD Quarter 2008 PeerMonitor Index

West, a Thomson Reuters business released the 3rd Quarter PeerMonitor Index in recent days.  The market analysis shows a decline from last quarter, stating:

Billable hours experienced a -5% contraction through August. But September hours rebounded, finishing the entire quarter down by only -2.5%. Productivity remained weak at -4.5% as adjustments to headcount lagged market conditions. Rates again were strong, and all told, fees grew at 5.5% compared to 10.5% a year ago. Direct expense growth slowed to 8% compared to over 9% a year ago. Overhead was 6%.

In addition to the index being made available, West developed a Podcast that provides a summary of what the Index tells us.

One interesting trend it reports on is the fact that the AmLaw 100 firms are experiencing more of an effect from the current downtrend than the AmLaw 200 are experiencing. 

Here at Strategic Librarian we’ve done a poll on library budgets (see 2009 Budget – Do You Get to Increase or Decrease?).  While certainly not scientific especially with so few responses, the responses do seem to indicate that the east coast has experienced more in ways of cutbacks in budget for 2009 than those firms in the middle of the country.  If you haven’t participated in the poll, please check it out and respond.  Click here for the results to date.


2009 Budget – Do You Get to Increase or Decrease?

Many of you are probably already done preparing your budget for 2009.  I’ve heard from some of you that you’ve been asked to reduce your budgets significantly given the current economic environment.  At the same time, some firms are asking their library directors/managers to keep the budget flat.   As far as I know, there aren’t many who have been tasked with managing a small increase but there may be some. 

With what I’ve heard, I thought it would be interesting to do a quick survey regarding increases and decreases in law firm library budgets.  Besides the possibility that it might provide some interesting information, it also gives me an opportunity to try out the MicroPoll polling site.  

To participate, click on Take Poll.  Once you’ve entered your answer, you should be taken to a page where you can see the results.  Check back occasionally to see how others have answered the question.  I will post final results with a new question about how law firm library online resources budgets are faring.

Powered By MicroPoll


3 Comments

Writing a Business Case

Whether you are making a justification for staff additions, new software, new online resources, next year’s budget, or the myriad of other reasons libraries need resources, you will do a better job of solving problems or improving services if you use a business case to plead your case.   What is a business case?  The many books and articles on the topic will tell you it is more than a memo or a hallway conversation and can be created following a formula that is straightforward.  The following seven components of a business case come from a Business Case Toolkit available through the BPR Online Learning Center.   

  • Situational assessment and problem statement
  • Project description
  • Solution description
  • Cost and benefit analysis
  • Implementation timeline
  • Critical assumptions and risk assessment
  • Conclusions and recommendations

Your next question may be “How do I use a business case in a library setting?”  To answer that, let’s do a better job of describing what each component represents.  Additionally, let’s use a specific project like purchasing electronic resource management software (e.g., OneLog, Lookup Precision, or Research Monitor) as an example – We will call it the ERM Project and assume that the firm has 200 electronic resource titles.   Please note that I’m making the comments brief.

Situational assessment and problem statement – Describe what the current situation is or the problem your project or action will address.  Be succinct but include the details that need to be considered. 

ERM Project –  [Firm Name] has approximately 200 electronic resources including online services (e.g., Westlaw & Lexis), Internet subscriptions, CD-ROMs, and custom built interfaces for accessing resources. While we have provided easier access to these resources through our portal, we continue to have some users who find it difficult to use electronic resources. Additionally, while we have worked to improve recovery of costs for these services as they are used for clients, we see room for continued improvement.

Project Description  – Describe the project including goals, time frame, resources needed and cost. 

ERM Project – The goal of this project is to improve access to electronic resources, increase recovery of associated costs, improve management of userids and passwords, …  This project will be completed by [month, year].  Costs for the project include hardware, software, staff, implementation costs, ongoing costs, etc.

Solution Description – The purchase and implementation of ERM software provides the ability to:

  • Manage userids and passwords and autopopulate those userids and passwords for the electronic resources being managed

  • Track the use of online resources

  • Prompt for and validate client matter number to allow recovery of costs associated with the online services

  • Produce usage report to use to disburse expenses to clients

  • Produce reports that can be used to determine value of electronic resource as well as training needs of researchers

Cost and Benefit Analysis – Cost/benefit analysis includes the cost of the project along with the benefits and any estimates at the return on investment (ROI).

The cost of the ERM solution is ____ including software, hardware, etc.   You will probably want to show the breakdown of each component of the purchase.

The benefits the purchase and implementation of an ERM solution include:

  • Better management of the 200+ electronic resources for which we are currently paying. 

Better management is probably too general a statement, as most of the justifications are probably anecdotal.  I would still list it as a benefit and probably use the number of hours of library staff time that could be put to use in other areas of their work.  See below for a formula you can use to calculate the hours.

  • Improved management of userids and passwords.  With the password management and autopopulation, it would be easier for users to access the services.  This would reduce the lawyer and staff time spent looking for and using the electronic resources.   The calculation for ROI could go as follows:

((____ researchers x ___ minutes spent looking for userids per day) / 60 minutes) x average hourly rate = fees recovered by better management of access

Example: ((400 researchers x 10 minutes) / 60 minutes) x $250 = $16,667 of lost revenue per day.  If you expand that to number of workdays per year, you might take 166 days x the lost revenue per day.  If you use the $16,667, the annual lost revenue would equal $2,766,722. 

My minutes may be a bit high and not every attorney could be counted as a researcher but what ever calculation you use should produce significant results in relation to your firm size.

  • Increased cost recovery.  Providing validation of client matter numbers allows researchers to enter the correct number at the time of research reducing exceptions and allowing for quicker disbursements.  Validating against the client/matter numbers in Elite would allow us to manage exceptions (wrong client/matter number – use of firm admin matter numbers) more efficiently.  

Accounting staff currently spend  time working on exceptions and/or doing data entry for disbursements (for services that don’t provide electronic files for uploading disbursements.) This would not eliminate the time needed for these projects but it would reduce it to a very small amount of time.

___ hours not spent managing exceptions  x 240 work days per year (allows for 4 weeks of paid time off) = staff hours that could be freed up for other work. 

Example: 2 hours x 240 days = 480 hours (.24 full time equivalent in staff hours)

$__ per month for Westlaw and Lexis where the costs are disbursed to firm admin numbers x ____% of charges that could be disbursed to clients (this would be a guess but even 10% of the charges would be significant) =  additional $________ in dollars recovered each month

You would probably see better recovery for other services as well as the Westlaw and Lexis recovery represented here.  You may also do much better than the 10%.

  • Reduced use of duplicate materials that account for $_______ of the library budget.  Easier access to resources should increase the use of the electronic services and reduce the need for some of the print duplication.

This doesn’t take into account the cost of the server and the resources needed to set up the system initially, but those costs are only incurred initially and as the software/server gets upgraded.  If you wanted to show that, you could show the costs of the system across 2-3 years against the ROI to demonstrate actual cost.

Implementation Timeline.   A timeline can be a simple list of the project milestones (events in a project) or tasks. 

  • Install software & all integration components (client/matter number tables) and provide training to administrator by [date]
  • Set up resources that will be managed by system [date] 
  • Set up userids and passwords by [date]
  • Set up integration with client matter numbers in time & billing system by [date]
  • Turn on functions (e.g., autopopulation, validation)
  • Begin testing by [date]
  • Provide training to pilot group by [date] 
  • Begin pilot group use by [date]
  • Introduce to practice groups by [date]
  • Release to firm by [date]

You can probably provide less detail than the list provides but I include it to give you an idea of what might need to be done.  Also, you may use less functionality than listed here and there may be other functions the vendors provide that are not listed.

Critical assumptions and risk assessment

  • Assumptions
    • Information Technology staff and Application Development staff will be available to work with Information Resources staff during times needed
    • ERM would be purchased at end of trial using dollars budgeted for this purpose if it works properly and if the script creation is something that can be managed by Information Resources staf
    • Information Resources staff will take the time to test and will provide feedback
  • Risks
    •  The system may not deliver on its promise
    • The system may not evolve as the needs of the firm does

 Conclusions and recommendations

  • The benefits of the system outweigh the costs and the risks
  • The firm should go ahead with the purchase

This is very much a first draft of a business case that is no doubt missing something and far from perfect.  However, it should provide you with the basics of writing a business case.

A recommended quick read: Developing a Business Case (Pocket Mentor)


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.


1 Comment

Developing the Library Business Plan

I talked in an earlier post about the need to operate libraries as if they were businesses.   If that is so, the first thing you would want to consider would be to develop a business plan.  Why?  For-profit businesses use their business plans to obtain the funding they need from banks, etc. to move forward with their businesses.  The plan is also useful because it outlines what your services will be, who your clients are, what you will do for marketing, and more.  It is the basis for how you will operate your business and may help you uncover areas of planning that need more attention.

There are many books, websites, and software applications that will help you with writing your plan.  While there are many forms a business plan can take, it is good to start with something basic.  The Small Business Administration has some basic information about creating a business plan.  They begin by defining the elements of a plan and provide other resources to support the development of the plan.

This may look a bit overwhelming but one way to attack it is to take what works for your library and leave the rest.   An example of what that may look like follows:

Cover sheet

Executive Summary

Table of contents

The [Services / Department / Plan] 

  • Description of services /projects
  • Marketing
  • Competition
  • Personnel

Budget History and Proposal

  • 1-3 years of budget history
  • Proposal for funds needed to support the delivery of services
  • 1-3 year budget projection
  • Assumptions upon which projections were based

Supporting Documents

  • Summary of services offered in the past with statistics that demonstrate success
  • Summary of open and completed projects with statistics taht demonstrate success
  • Organization chart
  • Copy of resumes of all management staff
  • Vendor proposals for products and services that will support the plan and are represented in the proposal
  • Other documents including; Strategic Plan, Collection Development Plan, Information or Knowledge Audit Summary, etc.
  • Document describing how the proposal is tied to the firm’s business goals

This is just a suggestion of what might be included.  The actual business plan that you develop is only limited by your business acumen and creative skills.  The goal is to be able to demonstrate to your leadership that your plans are based on the firm’s business goals and you have skills that go beyond what they think of as a traditional librarian.

Some things to think about:

  • The executive summary is your chance to get the most important points in front of your audience.  As lawyers often have a short attention span for this type of thing, it is very important to format the executive summary carefully to make sure you get the right message to your potential supporters.
  • The description of services, etc. is your opportunity to demonstrate what you are already doing along with what services need to be offered in the future.
  • The marketing section should include a description of the market you are serving within your organization or community along with what you will do to communicate with that market.
  • The competition section should be a realistic look at your competitors.  This could be included in a strategic plan instead and referenced in the business plan
  • The difference between this and a strategic plan is that the strategic plan focuses on vision, mission, goals, and objectives and the business plan focuses on how to make the goals and objectives a reality.

Additional resources for learning more about writing a business plan include the Small Business Lending Corporation’s online workshop titled Developing a Business Plan.  This pre-recorded workshop provides a great review of the topic.  Your public library is another good source – searching on “business plan library” Google will bring up a number of library website pages that list resources and sample plans.   SLA members have access to several books on business planning through the ebrary available through Click University.

Any comments on this post?  Do you think creating a business plan for the library in a private law firm would work?  I’d love to hear your thoughts.