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Controlling the Spiraling Costs of Online Legal Research

By Alan Cohen
August 30, 2007

There was a time when electronic services were supposed to replace books and lower costs. They've done neither. Instead, fees continue to rise each year ' well beyond the rate of inflation, say law firm librarians (licensing fees are typically covered by confidentiality agreements). Surveyed librarians expressed dissatisfaction on pricing issues especially with the big-two online providers, Reed Elsevier Plc's LexisNexis and Thomson Corp.'s Westlaw.

The mounting costs of online research would be bad enough without a further complication: Firms are having a harder time passing the buck, literally, to their clients. Today, most firms are struggling ' and failing ' to break even in this area. 'The [in-house] counsel know that [historically] books were an overhead expense, and they want to know why Westlaw and Lexis are different,' says Wiley Rein LLP's Carolyn Ahearn. 'So the costs are moving from client expense to firm overhead.'

Recouping online charges can be tricky. Even within a single firm, 'some clients will pay for it, and some won't,' says a librarian who requested anonymity. 'But more and more won't. Of course, the firm has to recover it in some way, so per-hour charges could be higher.' That may help explain another finding in this year's survey; while the number of billable hours decreased, the library's billable-hour charge increased, from an average of $134 in 2005 to $144 in 2006.

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