Both Lexis and Westlaw are currently pitching long-term deals. This is symptomatic of a saturated market. Online usage and recovery rates have been declining since 2008 and as a result pricing has declined. Why lock your firm into a long-term price commitment in this rapidly evolving market?
Negotiating with the vendors can be a frustrating, drawn-out and often unsatisfying process. F or many of our clients, negotiating ranks with tax-time on everyone’s list of fun things to do making the idea of fewer renewals sound enticing.
However, with rare exceptions, a long-term contract is among the worst paths a firm can choose for several reasons. One important reason seems obvious: change. Technology and pricing are continuously changing. You wouldn’t buy a plan that kept you from upgrading your phone for 5 years, would you? The legal information landscape is rapidly evolving with exciting acquisitions and new companies/products emerging. These products will continue to pull away use and interest in Lexis and Westlaw. It is always possible that one change in the market could make another product irrelevant. And as Artificial Intelligence rapidly gains momentum, there is much to be seen. What will the legal information landscape look like in 5 years ?
Generally, a longer contract benefits the vendor. For legal information contracts, we always advise keeping the term to within your near- and long-term forecasts, generally 3 years or fewer unless you are receiving a truly exceptional deal.
How exceptional is the new proposal? What are the year over year increases? What additional benefits are you receiving for a longer-term contract? Perhaps your firm/organization deleted the vendor in the past and is seeking to reinstate, leading to pricing and terms that are best in market. Make sure they are, and not just because the vendor has told you so. Another option to consider is bundling. Bundling products together can be an advantageous for some. However, for many, a new contract bundle may be hiding unnecessary products or content that the firm or organization doesn’t need. Take a good look at the bundle being offered. It could be a great deal, or it might not, but in either case, it is worth investigating.
Your current contract pricing and terms serve as the basis for upcoming contract negotiations. Learn whether your current contracts or vendor proposals are on par with Feit Consulting’s Market Benchmarks. We can shed light on spend per attorney, discount, and usage. Contact a Feit Advisor to have your contracts and proposals benchmarked. Alternatively, utilize Feit Consulting’s Optimizing Legal Information Pricing report which shares Feit’s market knowledge on these metrics along with concrete strategies to maximize results in your legal information contract negotiations.
Michael Feit earned his J.D. from the Loyola University School of Law in Chicago and was an executive at Westlaw before founding Feit Consulting 16 years ago. Feit Consulting partners with law firm administrators and legal information professionals to optimize vendor contracts and the management and delivery of legal information resources by providing leading-edge, customized solutions. Contact Michael at mike@feitconsulting.com
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