How to Not be Hostage to Your Vendor

By Michael Feit

The recently deployed pricing tactic by Lexis only served to add more heat to an already vigorous debate regarding the viability successfully operating with just Lexis or just Westlaw.  For the first time since the early 1990’s, retaining just one of these vendors has become the norm with 54% of large law firms having opted to retain only one vendor–and about 60% of those choosing Westlaw.

A vital takeaway from the current debate on pricing tactics is that no firm should be hostage to their vendor.  Well-established customers are, on average, treated the worst by their providers and receive the most unfavorable terms and conditions.  New technologies, including AI-based platforms, will continue to erode the consumption-based model, and for a host of other reasons, firms should place themselves in a position of having options.

In a perfect world, Lexis and Westlaw would publish retail pricing, and firms could pick and choose which products they wanted based on their practice needs and budget.  This ideal world does not exist today, as both vendors have discontinued standardized pay-as-you-go retail pricing. Instead all they offer is secret pricing and terms that vary greatly from firm to firm.

The good news is, there are options! You don’t need to be a hostage to your vendor if you have enough time to evaluate the options. The evaluation process in itself can prove fruitful, sharing pertinent information that can be used in the negotiation process.

There are a great number of elements to examine, from contracts to content, not to mention the strong reactions of users to fundamental system changes. Lexis and Westlaw have both successfully infiltrated law firms’ cultures and infrastructures over their many years of service.

The idea of transitioning to sole provider can be daunting, however, considering the many individuals and processes that might be impacted. There are a great number of elements to examine, from contracts to content, not to mention the strong reactions of users to fundamental system changes.  Lexis and Westlaw have both successfully infiltrated law firms’ cultures and infrastructures over their many years of service.

Yet, the pay-off in taking a deep look at these factors can be exceptional.  A mid-size US law firm with favorable pricing will spend well over half a million dollars annually to retain both vendors.  There was a time not long ago when firms could pass through online legal information costs to clients, making Lexis and Westlaw essentially free.  That is no longer the norm.  We have entered into a new paradigm.

Where to start:

• Get the pricing intel to determine your pricing is favorable. Compare contracts with market intel in Feit’s white paper, Optimizing Legal Information Pricing.
• Assess the viability of the sole-provider option. Evaluate the option at your organization. Develop a business case. If needed, check out this resource, The Sole Provider Playbook.
• Execute and implement. Consider hiring a consultant to manage the process.
• Exploring the sole-provider option is a healthy step in revising your legal-information strategy and can provide insightful information for contract negotiations. If you choose to do it alone, these resources are an advantage to legal-information decision makers on what steps and considerations should be made in the process.