Functionality Drives Usage Rates

Legal publishers pairing themselves with applications that embed their subscription-based resources isn’t new. West KM does it, as does LN’s Quickfind. Now out of LTNY we hear about the latest tool addition, Lexis for Microsoft.

Do these tools add valuable functionality for firms? Even if we hesitate on a few of them, the overall answer is probably ‘yes’. But an issue that seems rarely talked about is that of usage rates – the measure by which most flat fee pricing for online database services is based. The end effect of many of these tools is that they drive up your usage numbers, and then come contract renewal time, firms are forced to negotiate larger than expected price increases with vendors.

I write this only as a factor for consideration: even ‘free’ tools come at a cost. And if you’re negotiating a multi-year contract, you may be paying for years to come.

Comments

  1. Steve, thanks for pointing this out. I hate having to say “no” to lawyers who have learned of some interesting new functionality while on training, and who have come back asking why we don’t have X “even though it’s free”. Budget increases seldom match the pace of change in our tools, and we need to be selective.

  2. The other related issue I find difficult is flat-fee pricing. There’s nothing ‘flat’ about it; it’s just delayed a couple years until the usage rates catch up with the contract.

    Clients who claim they won’t pay for online research because their firm is on a ‘flat rate’ don’t get it. Firms buy those resources based on usage from the client’s legal research needs. The least they can do is pay their fair share on that usage based on the current contract price. Not marked up, just a fair cost recovery disbursed back to them.