Strategic Librarian

Using strategy to develop the law firm library.


Back to Blogging and LookUp Precision

It has been a while since I wrote a post for Strategic Librarian.  To be honest, it has been too busy to be able to get this in too.  Now that the pace of work has become less manic, I plan to get back to writing – something I really enjoy doing and I’ve missed.

What’s been keeping me so busy?  A couple things.  The first:

Nina Platt Consulting, Inc.  has recently partnered with Advanced Productivity Software, Inc.(APS) to manage the marketing, sales, account management and development of LookUp Precision.  

LookUp Precision isn’t new to me.  Before becoming a consultant where I advised clients on electronic resource management, I selected LookUp Precision for the last firm where I worked as director of the library.  It was a powerful tool for us and improved cost recovery significantly while giving us more control over passwords and resources.  

I’m excited to work with LookUp Precision again and to work with the firms that are using and will use the product.  In addition, I have a great team of individuals to work with me on the management of the product:

  • Lori Etheridge – Sales Executive
  • Emily Harder – Account Manager
  • Amy Witt – Project Specialist
  • Laurie Southerton – Marketing Manager
  • Dave Arnold – Product Specialist
  • John James – Research & Development Manager

The first four individuals are part of the NPCI team while Dave and John are part of the continuing support APS provides.  These folks, along with the development, technical support and accounting teams at APS  keep the product working for clients, introduce the power of the product to new clients and create new enhancements.  

The most recent enhancements include a new version of LookUp Precision coming out later this summer, and an import utility that clients can use to import Westlaw QuickView+ and Lexis PowerInvoice usage reports as well as other vendor usage reports. 

Along with that NPCI will be providing some consulting services to LookUp Precision clients without cost.  Briefly, they include some cost recovery, cost management, and electronic resource management services. 

Before I take my product leader hat off, I would like to invite those who are interested to see a demo of the product by calling or emailing Lori Etheridge – 612-235-7486 or lori@ninaplatt.com.  Also, for those interested, NPCI will continue to provide consulting services to law firms and legal information/software vendors.  For more information regarding those services, call or email me using the contact information found in the About page of this blog.

That being said, you will note that (while I haven’t in the past) I will have a bias towards LookUp Precision as I write about electronic resource management in the future.  At the same time, I plan to continue to write about the strategies firms need to put in place as they work to manage the electronic resources they have contracted for or subscribed to as well as other topics concerning library strategy and management.

NOTE:  The other project that I have been working on will be reported on another NPCI blog, the Law Firm Intranet.


Cost Recovery Ideas for 2009

Note:  NPCI will be offering Cost Recovery Webinars in February.  Click on the registration ad in the far right column to register for the first webinar taking place this week.  $30/pp or $60/group.

I’ve written a number of posts regarding cost recovery tactics over the last year and a half. 

They all follow a general theme that provides my ideas on how to deal with the cost recovery of online resources.  What would be different in 2009?  Not much, except that 2009 provides an opportunity for law firms to take real concerted action with regards to cost recovery.  Actions that will improve client service whether you decide to charge for online research or you decide not to.  Make 2009 the year you decide to:

Make a firm decision about cost recovery of online resource.  Whether you recover or not, decide as a firm.  Yes, some partners may write the expense off, but whatever gets done, make it a firm decision.

If you decide to provide all online research gratis to clients (according to the ALM Law Library Survey, only 3 % of firms are currently taking this route):

  • Draft a policy/procedure to include in engagement letters going forward.
  • Continue to provide training to researchers to make sure they are doing the best research possible and the vendor will not jack up the cost with the contract renewal.
  • Let clients know the value of the online research they are getting for free by providing a usage report by matter along with the matter’s invoice.
  • Consider increasing billing rates to cover the cost of the research although that would mean the service isn’t really free.

If you decide to charge clients for some online research services and not for others:

  • Draft a policiy/procedure and train all researchers on it.
  • Create a clear description of what is free to the client and what they will be paying for and include the description in engagement letters going forward. 
  • Meet with each client to explain the policy.
  • Consider increasing billing rates just enough to cover the cost of the portion of the resources that you will be providing gratis.
  • Alternatively, provide clients a monthly report showing both types of charges – free and billable.  Describe why each resource is being treated as it is including any changes from the last invoice.

If you decide to charge clients for all online research services:

  • Draft a policiy/procedure and train all researchers on it.
  • Create a clear description of what they will be paying for and include the description in engagement letters going forward. 
  • Meet with each client to explain the policy.
  • Enhance invoices to include more information about each research fee
  • Check back regularly with clients to make sure they continue to understand the policy (this could be done in a meeting that reviews all disbursements why, when, how, etc.).

Whatever decision gets made:

  • Provide annual update training to online researchers to make sure they are doing the best research for the client.  Require all researchers to attend.
  • Demonstrate that the firm is committed to research training by providing documentation that describes the training, how many researchers attended, results, etc.

This is just the tip of the iceberg in relations to what can be done in law firms to improve all aspects of the cost recovery of online legal research including better communications internally and with the firm’s clients.

Good luck with your recovery plans.  Please remember that Nina Platt Consulting offers services in this area and can assist you with making improvements to your program.


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

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.


Cost Recovery : The Basics

I will be presenting a program, Cost Recovery : The Basics via webinar for the American Association of Law Libraries (AALL), Private Law Libraries Special Interest Section (PLL) on February 13, 2008 at Noon (12:00pm EST).    This is the first of a two part series on cost recovery that PLL is sponsoring with a Continuing Professional Education (CPE) grant from AALL.  Click on the title above for more information.


The Growth of Electronic Resource Management (ERM)

I’ve been interested in electronic resource management (ERM) since I worked with the first CD-ROM services back in the late 80’s and early 90’s. Implementing these services demonstrated how very difficult it was to implement and/or support electronic access to content than to it was and is to purchase a book.  Beyond the difficulty of adding a record to the catalog for this new medium (at least it brought up a number of questions from the catalogers that I had never thought of), there were problems with networking and little reason for any researcher to want to take the time to try to use the CD-ROMs for research.

As networks improved and the Internet and World Wide Web were introduced for commercial use, the number of online services and the use of those same services increased.  While you would think librarians and publishers should had worked out the problems in managing these resources, they only increased.  This led Nola Vanhoy (Alston & Bird) and Cindy Adams (Mckenna, Long & Aldridge) to dream of a better mousetrap.

Ultimately the cost recovery vendor, Advanced Productivity Software (APS) – maker of the client/matter validation tool called Online Lookup as well as other law firm software application, was contacted and asked for support.  APS responded by working to create Lookup Precision – a tool that allows firms to use validation, but also track sites, auto-populate userids and passwords, and report on usage across all services.

APS licensed Lookup Precision to Thomson Elite for exclusive sales to the legal market.   While with Thomson Elite and later Thomson West, the product was branded with two different names – Elite Research Manager and West Research Partner respectively, Then sometime during the last two years, APS took the license back and rebranded it with the original name, Lookup Precision.   If this seems confusing, you’re not alone.  To set the record straight, the product is Lookup Precision and the company you buy it from is APS.

During the same time, Research Agent, a ERM product sold by a company with the same name, was eventually sold to nQueue, a legal software vendor that provides solutions for expense recovery.  They rebranded Research Agent to Research Tracker and eventually took it off the market according to the staff at their exhibit booth at ILTA.   What is curious to me is the fact that the Research Agent web site is back on line.  I haven’t recieved an answer to my query about the status of their product and would appreciate an answer to anyone who might know.

OneLog, produced by Info Technology Supply Ltd (ITST) which is based in the UK is a newcomer to the legal market.  While implementing their OneLog product at a US law school a few years back, the suggestion was made by the school that ITST should enter the law firm market.  At that time, OneLog had only been sold primarily to schools for user authentication from remote sites, etc.  Entering the law firm market meant changing functionality.  As they began to approach law firms, they found librarians willing to work with them to develop the tool and have since sold OneLog to a number of firms. 

LexisNexis has been part of this market as well with LexisNexis Cost Recovery Manager.  At this time, I don’t have much information about their product except I believe it evolved from their validation tool (Westlaw has a validation tool as well) but does more, (e.g., site tracking for other services).  If anyone has more information about the product and/or are using it, I would appreciate hearing from you.

Finally, while at SLA this summer, I ran across another vendor from the UK.  Priory Solutions Ltd, maker of Research Monitor is an interesting entrant to the market.  They do not have a client base in the US as of yet, but expect to hear more from them. 

While these products have been available for the last four years or so, the adoption has been slower than one would expect.  I think that will change, as a survey conducted recently indicated a large number of firms will be purchasing in the near future.  As the vendors have been selling their software to law firms, librarians have provided feedback that has already produced functionality which changes how those firms manage their online services making the use of these products attractive. 

I think this is just the beginning of better ERM.  Now, if we could just figure out better ways of presenting the hybrid (print & electronic) library interface beyond the traditional online catalog, we may be able to better turn our attention to other challenges like the on-demand training needed by our users.


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Cost Recovery : Putting a Value on Online Research

To recover costs or not to recover costs – that is often the question asked when it comes to online research these days.   While costs for online research keep rising, we are seeing clients refuse to pay, lawyers who don’t want to charge clients, and firms a bit skittish about taking on costs that are in the millions for some.  Even so, some partners tell their associates to charge the online research to marketing or some other administrative general ledger number.  Worse yet, they may tell them not to use the online resources to do the research. 

It is true, generally speaking, that clients do not want to pay for online research.  Some clients submit RFPs that outline what they will and will not pay for online research.  They do this for many reasons including the belief that online research is no different from researching using print which is generally treated as overhead and fear that they will be overcharged.  Firms respond that they will honor that request and then do something internally to make sure the client is not charged. 

On the other hand law firms haven’t done a good job of developing policies around online research or communicating the value of that research to their clients.  Perhaps the cost of the services seems insignificant in comparison to other expenses.  Perhaps they just don’t have time to think about it.  Perhaps they just wish the whole thing would go away or get fixed on its own.

The bottom line is that there is a problem that needs to be addressed and few are doing anything about it.  So what problems does this emperor with no clothes create? 

  • Uneven distribution of costs.  Depending on how firms disburse online research costs, some clients could end up paying for those unwilling to pay. 
  • Lesser quality research results.  Fearful of being reprimanded for using online resources, associates do not do as thorough a job while researching.
  • Inaccurate metrics around what a matter costs the firm.  If associates (and partners) use non-billable numbers to mask the research costs, the firm does not get an accurate picture of costs and therefore doesn’t know how profitable a matter may be.
  • Surprises when services are invoiced.  Client A is surprised when they receive an invoice from Firm B, for services that a partner verbally agreed would not appear on the invoice.
  • Mixed messages.  Associates who thought they were operating correctly get reprimanded for doing something they thought was right.
  • Unrealistic cost recovery budgets.   Budgeting for recovery can be a futile exercise for a library director to create as there is no way to predict the growing number of discounts, write-offs, and new clients who are not expected to pay for any of the online costs. 

There really has to be a better way to manage these costs.  I don’t have any brilliant solutions to the problems I’ve outlined but I do think there are some things that law firms and their clients can do to reduce the frustration around this issue.

  • Decide to charge for online research or treat those services as overhead costs.  Whichever you decide, be consistent.  As you make this decision, consider what the value is in offering online research to your client.  Do they realize the value?  They are receiving faster results with less attorney time spent in research.  Have you done a good job of explaining the value to your clients?
  • Ask your clients for their input.  Communication will go a long way toward creating an understanding in regards to how you plan to operate.
  • Develop a cost recovery policy for online research.  This policy should outline what its disbursed and what is treated as overhead.  It also needs to outline how discounts will be given to clients who provide the firm with a large volume of work.  Your cost recovery policy should be your firm’s roadmap for how they do business in relation to online research.
  • Be clear in how you disburse costs.  The message regarding how you charge clients for these services should outline how the costs are included in overhead or how they will be charged out separately.
    • If you are treating resources as overhead, provide your clients with reports that will demonstrate the benefit they are receiving.  Communicate, communicate, communicate.
    • If you are charging clients separately for online services, make the disbursements as transparent as possible.  They should know what you paid for the service and what they are being charged.   Don’t leave room for questions.
  • Do regular reviews of your policy in relation to the market and client expectations.

Much of the backlash against online resource costs, exists because firms have not led the discussions that are needed to make clients understand the value of the service or to make cost recovery more transparent.  Communication around this issue should be treated the same as communication around any other firm/client issue.  That is, of course, if you think the per firm $3,000,000 average spend on online services that was reported in the Law Firm Inc AmLaw 200 Library Survey is real money.


Managing Costs

 This posting may seem like a no-brainer for some of you, but the following thoughts on how to manage costs in a law firm library may be useful for others.  They should be applicable to other types of libraries if you put your clients in the place of the lawyers in a law firm.  

One of the roles of a strategic librarian is to manage costs.  I’m not talking about cutting costs necessarily but to manage by making sure the money is being spent where it is needed.  Here are a few ideas for making this work:

Don’t let lawyers buy their own resources.  OK, this sounds a little harsh so use more diplomacy than I just did.  I’ve had the experience twice where I came into a firm and was able to bring down costs just by instituting the policy that all purchasing of information resources has to go through the library or information services or whatever you want to call the group that manages access to information.  When lawyers have carte blanche for purchasing resources, the firm usually spends money over and over again for the same information.  The idea of a library is to pull resources together for common use.  There are some materials that each lawyer needs but even those materials can be purchased more cost effectively when handled by the library.

Create an acquisition or collection development policy.  The policy should outline what gets purchased, what criteria is used in purchasing, how the selection process works, how the collection is maintained and more.  While Dakota County Law Library in Minnesota isn’t a private library, their collection development policy demonstrates the type of information that could be included in a policy.   If you do create a policy, keep it up to date.  In this fast changing world, how we collect could change quickly.  If you have goals for where you would like to see the collection in 2-3 years, include them in the policy. 

Create a team of library liaisons.  These are lawyers (hopefully partners) who will work with you to build (or reduce) their practice group collection.  They can help you:

  • Create a list of standard works that get distributed as office copies and support you in staying with the titles seleted when someone asks for their favorite version of whatever rules, etc. they want to use.
  • Break the news that something won’t be purchased to their partners and associates.  It is easier for a partner, who has been charged with decision making regarding the materials for their practice group, to tell another partner that the resource they want is a duplicate or lesser work and won’t be purchased.
  • Get feedback on what their practice group is thinking to factor into decisions about the general collection that gets used by all and then support the decision that gets made.

Charge back expenses by practice group and office.  Few lawyers will say no to purchasing what they want if they have an unlimited budget.  Work with the liaisons from the groups or offices to create a budget for new purchases, subscriptions, etc. (a whole other article could be written about how to create a budget).  The bottom line here is create one for each group and hold them accountable.  This. of course, will take leadership buy in and support.  We don’t have much control if we don’t get support, however, putting something like this in place gives you a better chance of success.

Charge clients for resources that are being purchased for a matter.  Materials that are related to a single matter don’t benefit the firm as a whole and don’t belong in the firm’s library collection.  If the partner on the matter doesn’t want their client charged, see what you can do to have the materials charged to the partners marketing budget.  If it truly is something that will be used again, it makes sense to pay for it from firm funds but make sure you get it for cataloging processing and then check it out to the partner or their associate.  Be clear that this isn’t something that gets put in the file and never seen again.

If you are asked to cut your budget, view it as an opportunity.  A budget cut is a perfect opportunity to review your collection with the lawyers looking for cancellations.  Often the purchases you make from year to year are needed at the time of purchase but they may not be needed in the long run.  A budget cut will give you support for canceling and withdrawing those materials that are no longer needed. Provide the practice group a report that shows what each title costs annually and ask them to provide you with the titles of the materials they are willing to live without.  It takes time and can be painful but it is a great exercise in cutting waste.   

Constantly look for items to cancel and withdraw.  This time it isn’t to support a budget cut but to look for dollars that can be used more effectively.  Take notice of the materials that never seem to be off the shelf and ask if they are needed.

Use one of the electronic resource management tools like Lookup Precision, OneLog, or Research Monitor.  Spend time monthly with the reports checking for electronic resources that aren’t providing the best value for the dollars spent.  This will help you determine what resource needs to have further user training and what might be a candidate for cancellation.

Send usage reports to Accounting at least weekly for online costs.  If you can get weekly usage reports from your vendors, you have a better chance of getting the charge disbursed to a client.  Ask your vendors to provide the reports to you on a weekly basis and get them to Accounting.  Waiting for the monthly report or invoice means the associate who hasn’t provided you with a valid client/matter number may forget why he did the online research.  Handling exceptions takes time.  Partners are more likely to include the expense on a client bill if it hasn’t been sitting somewhere waiting for more information.

Budget for cost recovery of resources like Westlaw and Lexis.  If your firm charges clients for online services, create a budget for recovery.  With such a budget in place, you can keep track of where you are with recovering costs which will assist you with managing firm management expectations. 

Review your usage reports looking for training opportunities for researchers.  While a usage statement doesn’t always tell the story, you can generally see problems in how someone is using a system by looking at the statement.  Be gentle when you point out potential training opportunities but be firm that more training is needed if you believe it to be the case after a discussion with the researcher.  The training may be as simple as showing them the difference between hourly and transactional research but it will pay off.

Ask Accounting to provide you with reports that provide the following information:

  • Clients who do not pay for online research.  The Elite accounting software has a flag that shows whether or not particular clients pay for online research.  It also has allows for discounts to be applied to this type of expense.  Other software used by firms for accounting may do the same. 
  • Write off reports.  These reports should show you which partners are writing off the disbursements, how much was written off and which clients receive the bulk of the write offs.  This type of information is useful when discussing recovery with partners.    
  • Recovery against expense for the online services.  Make sure the report reflects writeoffs to get a true picture of recovery. 
  • Monthly expense against information resource budget for all line items.  If you budgeted by practice group and/or office, ask Accounting to provide a report for each group.  If you are working with group liaisons, provide them with a copy of the report.

Read the reports provided to you.  Spend time reviewing reports, looking for nuances that make show a trend, etc.  The reports by themselves are useless unless they are studied.

Remember that everything is negotiable.  Don’t let your vendors tell you that they’ve never seen a contract like the one you are asking for or their company doesn’t do business in the way you are requesting.   But then this is a whole new article.