Legal bloggers have generally given WestlawNext’s improved search algorithm and user interface high marks. However, they’ve been critical of West’s lack of transparency about pricing and the complexity of its pricing model. To help level the playing field in negotiations between West and its customers, I’ve shared the progress of my upgrade negotiations in a series of posts over the past two months (WestlawNext Preview: Product and Pricing My WestlawNext Upgrade Negotiations: Proof that West Isn’t Interested in the Solo Market, WestlawNext Pricing Information and Reaction from Firm Law Librarians and Westlaw Reps Don’t Know their A$$es From their Elbows When it Comes to WestlawNext Packages and Pricing). Until today, though, I didn’t know what the bottom line would be.

The Bottom Line Analysis

Here’s what my Westlaw plan looked like as of early February (this month, a scheduled price increase brought the total cost up to $514):

Here is the pricing breakdown for three proposals my Westlaw rep set to me on February 8 (all monthly prices have been adjusted to reflect the 45% discount I would get for being willing to sign a new 3-year contract at this time):

The above proposals don’t include ResultsPlus because West is not offering ResultsPlus in WestlawNext. Furthermore, while the All Analytical and National Secondary Sources – Premium databases contain some useful secondary sources, the vast majority of sources included in ResultsPlus are not included in either All Analytical or National Secondary Sources – Premium.

Comparing my current plan to the WestlawNext proposals revealed that West would be charging an 11% premium for the power to search with the WestlawNext algorithm in the same database (All Cases & Statutes NY Gold with Regs Plus Database). While I believe that West shouldn’t charge its current subscribers anything to “upgrade” to WestlawNext, an 11% increase is in line with the pre-launch prediction offered by Jason Eiseman, Tom Boone, Greg Lambert and Jason Wilson.

On February 11, my rep’s sales manager told me that my rep had “failed to mention” that the pricing in the preceding chart was “introductory pricing” that was valid only until February 28th. So I asked the obvious question: what would the prices for each plan component be as of March 1?

It took more than a month (and quite a few strongly-worded e-mails to both my sales rep and his manager) to get a straight answer to my question. But now that I know, I can’t really blame my rep and his manager for hemming and hawing. Here are the current proposals (again, monthly prices have been adjusted to reflect the 45% 3-year contract discount):

	Proposal #1	Proposal #2	Proposal #3
Total	$804.18	$1,102.14	$758.56
All Cases & Statutes NY Gold w/Regs Plus	$507.00	$507.00
All Analytical Library	$297.18		$297.58*
National Secondary Sources - Premium		$595.14
All Cases & Statutes			$334.62
NY Analytical			$126.36

*As in original

Yes, that’s right: West believes that the WestlawNext algorithm is so valuable that its customers will be willing to pay a 68% premium to use it. While I think it generally pays to be an early adopter, this is one price I’m not willing to pay. Are you?

The Background

Before you read further, if you’re not familiar with my previous posts about WestlawNext pricing—My WestlawNext Upgrade Negotiations: Proof that West Isn’t Interested in the Solo Market and WestlawNext Pricing Information and Reaction from Firm Law Librarians—I encourage you to read them now. In case you don’t have time, here’s the abridged version:

Here’s what my Westlaw plan looked like as of early February (this month, a scheduled price increase brought the total cost up to $514):

Here is the pricing breakdown for three proposals my Westlaw rep set to me on February 8 (all monthly prices have been adjusted to reflect the 45% discount I would get for being willing to sign a new 3-year contract at this time):

After some back-and-forth discussion with my sales rep, I moved up the Thomson Reuters food chain to my sales rep’s manager. On February 11, the sales manager discovered that my rep had “failed to mention” that the pricing in the preceding chart was “introductory pricing” that was valid only until February 28th. He also asked me to keep the negotiations confidential. On February 13, I asked the sales manager what the prices would be as of March 1. On February 22, the sales manager told me that the post-February 28 prices for all of the WestlawNext plan components included in the second chart above had not yet been released.

The Update

As soon as March 1 rolled around, I once again asked for the pricing for all of the WestlawNext plan components included in the second chart above. On March 5, my sales rep responded with prices that were not broken down by plan component.

I responded with an e-mail reminding him that I had requested the pricing for all of the WestlawNext plan components included in the second chart above. And I waited. And I waited.

Last week, I spoke to him on the phone and requested the same information. And I waited. And I waited.

On Monday, I e-mailed the sales manager, asking for the same information. The good news is that I got a quick response. The bad news is, here’s the response I got:

We can’t break out pricing by component. Pricing is derived based on the totality of the package and those prices are provided to you below [i.e., in my rep's previous e-mail].

Oh, really? I shot back:

With all due respect, [my rep] previously broke out the pricing by component. Therefore, I know you can do it.

When I sat down to draft this post Monday night, realized that my sale’s rep’s March 5 e-mail gave a price for a package (which I’ll call 3b) that wasn’t included in the first round of proposals.

As mentioned above, West refused to provide updated prices for plan components in the updated packages; I calculated the figures in the chart above using the ratio of the prices of the plan components as stated in the first round of proposals to the total plan prices in that round. Additionally, to facilitate comparison and analysis, in this post, I changed the numbering of the packages from the numbering my rep used in his second round of proposals—which doesn’t correspond to the numbering used in the first round of proposals.

As I explained to the sales manager:

There are a number of discrepancies between the content included in the three Proposals included in [my rep's] February 8 e-mail to me and the content included in [his] March 5 e-mail to me . . . .

* * *

. . . [B]ased on my conversations and correspondence with [my rep], it was my understanding that WestlawNext would not include either Results Plus or Law Reviews & Journals as separately available plans. Please clarify whether: (1) West has changed its mind, and has decided to offer Results Plus and Law Reviews & Journals in WestlawNext; or (2) [my rep] mistakenly included these items in Package [3b] in his March 5 e-mail.

Third, the disparity in prices between Packages [1] and [2] ([in the] March 5) e-mail doesn’t make sense. [My rep] previously explained to me that National Secondary Sources—Premium includes more content than the All Analytical Library. That is backed up by the fact that, in his February 8 proposals, All Analytical was priced at $209.55 while National Secondary Sources—Premium was priced at $419.65. Yet, in the current crop of “Packages,” the package that includes National Secondary Sources—Premium (Package #[2]) is more expensive than the one that includes All Analytical (Package #[1]) (the two packages are otherwise identical).

Finally, as mentioned in my previous e-mail, are the “package” prices quoted in [my rep's] March 5 e-mail the prices before application of the 45% 3-year contract discount or after application of that discount?

Here’s the sales manager’s response:

You are correct that there were some discrepancies in pricing and content in the multiple communications we’ve had. I apologize for these discrepancies, which were errors on our part. I’m sorry for the confusion.

It appears that the loss of ResultsPlus is the biggest issue for you. ResultsPlus is not available on WestlawNext and there is not an exact equivalent product or functionality. If ResultsPlus is a significant factor in your research process today and if the proposed alternative content in combination with the overall WestlawNext benefits are not a good alternative, I would suggest that you keep your current Westlaw plan.

I realize that you asked for more detail on the discrepancies you noted, but e-mail communication does not lend itself to a consultative and efficient conversation about your preferences, and frankly hasn’t worked out well for you so far. I believe an in-person conversation would provide a better forum to address pricing details and how the benefits of WestlawNext can provide you with a superior research experience.

If you have an interest in WestlawNext in the future, please feel free to call me directly.

And my reply:

Are you refusing to discuss this via e-mail? All I asked for in early March were updated prices for the proposals that [my rep] presented me with in early February. Results Plus is in this discussion because (as you now concede) [my rep] mistakenly included pricing for it in his March 5 e-mail to me.

I am fully familiar with the benefits of WestlawNext. I have neither the time nor the desire to meet face-to-face with you or [my rep]. (Don’t worry about losing a sale because of my refusal to meet with you in person: I’ve signed two three-year contracts without meeting with a Westlaw rep in person.)

The complexity of West’s pricing structure, combined with the fact that the reps clearly are not familiar with what is being offered (as demonstrated by the facts that (1) [my rep] “forgot” to mention that the pricing in his February 8 e-mail expired on February 28; and (2) more than a month after WestlawNext launched, [my rep] quoted me prices for plan components that don’t even exist in WestlawNext) make it necessary to conduct all negotiations in writing.

Furthermore, you have not responded to [my] questions [concerning application of the 45% 3-year contract discount and the disparity in prices between packages 1 and 2].

If you refuse to communicate further with me by e-mail concerning this matter, I request that you put me in touch with your supervisor.

The Questions

Do you think my experience is an accurate reflection of how West is handling its WestlawNext negotiations? Is my rep unusually incompetent? Or is West punishing me for being outspoken about their pricing strategy?

And why hasn’t the “traditional” legal press (i.e., publications like the ABA Journal or the National Law Journal) written anything about WestlawNext pricing? Could West’s substantial advertising spend (and, in the ABA’s case, sponsorship dollars) have anything to do with it?

Update 3/18/10, 10:15 p.m.:

Here’s the latest round of e-mails. First, the sales manager to me:

To verify, Results Plus is not part of WestlawNext and not an option.

I will try to explain the differences between package [1] & [2], but without doing a full needs assessment, it is difficult to recommend the rate package for your needs. This is why a phone call is recommended.

Package [1] does contain different information than Package [2]. You would have access to Regulations Plus which is our annotated CFR; State Jury Instructions and Key Rules. This option has always been the most expensive.

Package 3 takes out those databases.

The All Analytical is less expensive but it does not have State Jury Instructions, Key Rules nor CJS.

The package prices are the final prices. No other discounts would apply.

I hope this answers your questions.

My response:

First, [my rep] did a needs assessment before providing me with proposals on February 8: I explained my goals to him and he reviewed my usage. If you don’t understand my needs, you should speak to [my rep].

Second, your statement that Package [2] omits three items that are in package [1] is incorrect. The following is copied directly from [my rep's] March 5 e-mail (I have added the red highlighting).

Package #[1]:
All Cases & Statutes NY Gold w/Regs Plus
All Analytical Library
Price: $1102.14/month

Package #[2]:
All Cases & Statutes NY Gold w/Regs Plus
National Secondary Sources—Premium
Price: $909.48/month

Both packages include annotated regulations. Are you telling me that the only difference between All Analytical and National Secondary Sources – Premium is that the latter also includes State Jury Instructions and Key Rules? If so, that is inconsistent with [my rep's] February 9 e-mail to me, in which he stated: “Re: The difference between All Analytical and National Secondary Sources, premium, is primarily the restatements and CJS. I haven’t cross checked all the databases (the list is too long), but those are the major titles.”

Third, the proposal in the February 8 e-mail containing All Analytical was less expensive than the package containing National Secondary Sources—Premium ($567.05 v. $777.15). As you can see from the above, with the new packages, the one containing All Analytical is now more expensive than the one containing National Secondary Sources—Premium. That (and not the fact that the two plans aren’t the same price) is what doesn’t make sense.

Fourth, you still have not addressed my request for a breakdown of the prices into plan components.

Your inability to get your facts correct and your refusal to respond to a simple request for a detailed breakdown of the package pricing (despite the fact that [my rep] previously provided me with precisely that information in connection with the original proposals) is wasting my time. Please advise me of the name of your supervisor.

Unfortunately, the huge gaping hole of information about WestlawNext pricing also exists in the heads of those trying to sell the product.

Though much of the discussion was focused on the WestlawNext algorithm, the participants touched on pricing as well. One of the featured guests expressed this concern: “If this is as cool as it appears, it widens the gap between what large law can do versus the self-represented litigant or even the small law firm. Because large law firms can afford to buy this right away . . . .”

Later, one of the guests, extrapolating from the fact that 80% of lawyers in the country practice in firms with fewer than 20 lawyers that don’t employ law librarians, posited that most of West’s revenues come from small firms.

Greg Lambert recounted the disdain of his co-blogger, Toby Brown, for West’s excuse for charging a premium for WestlawNext (which is that the company has invested significant resources in the upgrade). I agree with Toby’s view that customers expect a company like West to take R&D costs out of its own pocket, rather than so blantanty reaching into its customers’ pockets to cover them.

The show’s chatroom transcript also contains some great nuggets about pricing:

Marcia Dority Baker
How many people are firm librarians? have you bought westlawnext yet?
Mar95
I’ve had the my rep onsite and had a demo. The product looks great, much simpler for users, the problem is the pricing.

mar95
It’s being sold as a seperate product – $900 month in addition to our current subscription. Or there is a pay-as-you-go option, $10 per search, $5 to view/print document, $2 for keycite

mnlawfirmlib
Does anyone else feel reps weren’t very well prepared for the rollout? While I’m glad TR invited bloggers to preview it and greatly appreciate their insights and feedback but reps seem behind the 8 ball and don’t have all the information.
mnlawfirmlib
Example of conflicting information: our rep told us it was $60 per search.

weblawlib
But if you’re able to bill back most Westlaw charges, how does this impact a law firm library budget?
Ken Hirsh
Many corporate clients want flat billing from outside counsel
mnlawfirmlib
That’s just it – we’re not able to bill back many charges b/c many large clients won’t pay for online research or attorneys write it off for a variety of reasons.

cblib
recovery rate is never where it needs to be. i can’t take risks.

Marcia Dority Baker
Hmm, are small firms West’s bread & butter?

mar98
I think smaller firms are probably very important business, many don’t keep books, and just use electronic material on West.

I think it’s fascinating that large firm librarians think that small firms are important to West’s bottom line, since my WestlawNext upgrade negotiations have led me to believe that West isn’t interested in the solo market at all.

It’s also interesting to hear about biglaw’s experience with cost recovery, a topic I posted about last May.

Finally, I’m going to take this opportunity to update my last post (for some reason, the update is breaking that post):

Update 2/25/10, 8:30 p.m.

On Monday, I received a response (by snail mail) from my rep’s sales manager. Included with the response was a long list of the databases included in the National Secondary Sources – Premium plan. Although I haven’t had a chance to review the list in detail, as I expected, it appears to be nearly identical to the All Analytical Library content (which, as noted above, is far from comprehensive, and is nowhere close to offering equivalent value to the sources available in Results Plus), plus Corpus Juris Secundum.

The sales manager’s response to my pricing questions was classic West:

There are no URL [sic] or press releases regarding our pricing modules or programs. As I stated earlier, that information is confidential.

Oh, and the post-February 28 prices for all of the WestlawNext plan components I discussed with my sales rep? “That has not been released.”

So, let me see if I have this straight: First, my sales rep quotes me prices for several WestlawNext libraries. Weeks later—after I prove myself to be a tough customer—the sales manager tells me that my rep forgot to mention that those prices are only the introductory prices. But he can’t tell me what the regular prices will be, even though they’ll be going into effect next week.

While I don’t have a business or marketing degree, I know a little bit about marketing from personal experience. Whenever a company offers a special introductory/early bird price, they tell you what the regular price will be. Why? To motivate you to buy now. And when a company offers an early bird price, they actually advertise it; after all, what’s the point of creating urgency if nobody knows about the special offer?

My last post is two weeks old. I’ve invited West to respond to the issues. A week ago, I raised them in a comment on West’s own blog. Other bloggers have commented on the lack of pricing transparency. Yet West hasn’t offered an official response. The company’s silence speaks volumes about the regard in which it holds its customers.

My Background with Westlaw

I’ve been a Westlaw user for five years, and am currently two years into my second three-year contract with them. Since I work with lawyers nationwide, I have a very broad Westlaw plan (especially for a solo), with particular depth in New York secondary sources (about 50% of my clients are in New York). I currently pay $489/month for my subscription, with a scheduled price increase in March to $514/month. Here’s what my current plan looks like:

I picked up ResultsPlus when I signed my current contract. I love it. Basically, the ResultsPlus plan allows you to click on any of the documents you see listed on the right side of your Westlaw screen without incurring an out-of-plan charge (without ResultsPlus, you’d get an out-of-plan warning screen). Only the “first click” is free: while you can browse through the table of contents of the analytical source you’ve linked to at no cost, if you view any other section of the source from the table of contents, it will be considered out-of-plan (you’ll get a warning screen and can then choose to cancel or continue). At the preview meeting in Eagan, West explained that ResultsPlus was somewhat of an early step towards the development of WestlawNext (which extensively features suggested links to materials in databases other than what you may be focusing on).

My Views About Westlaw Pricing

I expanded the views expressed in my last blog post on Twitter (@ reply indicators have been deleted):

Suppose it’s possible @Westlaw could req. NDA re: Westlawnext pricing, but there would be a huge backlash.

What @Westlaw thinks is “modest.” Frankly, I believe “upgrade” 2 WestlawNext should be free 4 current customers.

After all, @Westlaw will still make $ when customer accesses out-of-plan document from WestlawNext results list. [cont.]

Charging 4 upgrade to WestlawNext is shortsighted, b/c WLN is designed to reveal all relevant docs (incl. out-of-plan).

A WestlawNext user who frequently accesses out-of-plan docs, will convince *him/her self* to expand scope of subscription.

Also want to know what WestlawNext equiv is to WL’s Results Plus add-on (=1st click to doc outside of plan is free).

Agree that there were large R&D costs. WestLawNext algorithm relies on much more than what’s in pub domain.

Still, @Westlaw shld treat current customers better than new 1s; it will still profit as explained in my prev twts

Whether current @Westlaw pricing is outrageous depends on ur view of the added value it provides. I think it’s worth it 4

…my practice, which is research-heavy. If ur use is very light, not much value in a monthly subscription at their prices

My WestlawNext Upgrade Negotiations

After I explained my upgrade goals to my Westlaw rep, I received this response:

Proposal #1

This proposal contains a straight migration of your All Cases & Statutes NY Gold with Regs Plus and adds the All Analytical library. The Law Reviews & Journals portion of your plan is a part of the All Analytical plan and therefore is not listed as a stand alone database. This proposal contains ALR, AmJur, AmJur POF, Causes of Action, Federal Practice and Procedure, etc., and captures the vast majority of your Results Plus usage. Based on your usage, the biggest missing piece in this proposal is CJS which you accessed approximately once a month through Results Plus.

Proposal #2

This proposal is a step up in analytical content and includes CJS and the Restatements.

Proposal #3

For this proposal I took a look at your usage of the CFR. Over the past year you have accessed the CFR 8 times, so it is a database that you may consider dropping. I kept you in All Cases & Statutes and added the NY Analytical plan to replicate the content of a NY Gold package. I added the All Analytical and included CJS as a stand alone subscription.

As I mentioned, WestlawNEXT is a premium product and while I have discounted my proposals to the highest order allowed, the prices reflect that premium. After we spoke I had the opportunity to speak with a reference attorney who has been using WLN for the past few months. Despite her exceptional skill at boolean searching she finds that WLN’s search engine allows her to find the most relevant cases quicker than boolean searching on Westlaw. The reason, she explained, is the intuitive nature of the search engine and its ability to look beyond your search to find the most relevant cases, statues and secondary sources.

As an existing customer, with any of these three proposals you will be eligible for up to $1000 in print at no charge.

Note also that your current plan is scheduled for an annual increase at the end of this month. Starting in March your monthly payment will be $514/month.

Here’s how the plans compare (all monthly prices have been adjusted to reflect the 45% discount I would get for being willing to sign a new 3-year contract at this point):

	Proposal #1	Proposal #2	Proposal #3
Total	$567.05	$777.15	$560.45
All Cases & Statutes NY Gold w/Regs Plus	$357.50	$357.50
All Analytical Library	$209.55		$209.55
National Secondary Sources - Premium		$419.65
All Cases & Statutes			$235.95
NY Analytical			$114.95

(I’ve omitted the cost for CJS from Proposal #3 because I don’t need it as long as I have Am Jur, which is included in the All Analytical library.)

As you can see from the chart above, when a database (such as All Cases & Statutes NY Gold w/Regs Plus) comes over from Westlaw to WestlawNext without any change in its coverage, there is an approximately 11% price increase.

Here’s my response to the proposals:

Please provide me with a complete list of (1) All Analytical sources in WestlawNext; (2) New York Analytical sources in WestlawNext and (3) Results Plus sources in Westlaw. I would prefer if you provide me with links to where I (or anyone else for that matter) can find the sources lists online, as West should be transparent about what libraries/databases are available. If this information is not readily available online to the public (including individuals who are not current Westlaw Subscribers), please provide it as attachments.

Doesn’t All Analytical include everything that’s in New York Analytical? If not, the name of All Analytical is misleading.

Just to clarify: is the only difference between All Analytical ($381) and National Secondary Sources – Premium ($763) the fact that the latter includes Restatements and CJS?

He sent the database lists I requested, which I’ve linked to above. He also responded:

Remember that Results Plus allows the first click into the listed databases, while subscribing to the All Analytical Plan gives you unfettered searching in many of the same titles.

Re: All Analytical v. NY Analytical: The “all” refers to national analytical titles such as ALR, AmJur, etc. As evidenced by the attached documents, NY Analytical is targeted to NY specific analytical sources.

Re: The difference between All Analytical and National Secondary Sources, premium, is primarily the restatements and CJS. I haven’t cross checked all the databases (the list is too long), but those are the major titles.

Re: Proposal #3: The NYCRR is contained in the All Cases & Statutes portion of the proposal.

Any person can always go to www.west.thomson.com and find a complete list of databases for any of our online plans. It is my understanding that they are current with WestlawNEXT as well. As you mentioned, West should be and is transparent with the content of their plans.

Here’s my response:

The All Analytical list is far from comprehensive, and is nowhere close to offering equivalent value to the sources available in Results Plus. Specifically, the vast majority of the All Analytical database seems to be composed of Law Reviews and Journals. Another huge chunk of All Analytical is composed of what appears to be redundant portions of larger works. Here’s one example:

ALR American Law Reports [doesn't this include all of the segments below?]
ALR-BKR American Law Reports–Bankruptcy
ALR-BUS American Law Reports–Business Organizations
ALR-CML American Law Reports–Commercial Transactions
ALR-CSTR American Law Reports–Construction
ALRDIGEST West’s ALR Digest
ALR-DUI American Law Reports–Driving While Intoxicated
ALR-ELD American Law Reports–Elder Law
ALR-ENV American Law Reports–Environmental Law
ALR-EPP American Law Reports–Estate Planning and Probate
ALR-FAM American Law Reports–Family Law
ALRFED American Law Reports, Federal
ALR-GOVK American Law Reports–Government Contracts
ALR-IMM American Law Reports–Immigration
ALRINDEX ALR Index
ALR-INS American Law Reports–Insurance
ALR-IP American Law Reports–Intellectual Property
ALR-LB American Law Reports–Labor and Employment
ALR-MRT American Law Reports–Maritime
ALR-MUN American Law Reports–Municipal
ALR-PAT American Law Reports–Patents
ALR-RP American Law Reports–Real Property
ALR-SEC American Law Reports–Securities
ALR-US-INT American Law Reports–Multinational (Issues Arising in the U.S.)
ALR-WC American Law Reports–Workers’ Compensation
ALR-ZONING American Law Reports–Zoning

Moreover, hardly any of the sources included in Results Plus Pro are included in All Analytical. Significant omissions from All Analytical include the state Jurisprudence works (e.g., CALJUR, FLJUR), the Witkin publications (re: California law) Couch on Insurance, Fletcher Cyclopedia of the Law of Private Corps. and Williston on Contracts. Only a tiny handful of non-law journal sources that are included in All Analytical are excluded from Results Plus (e.g., Handbook of Federal Evidence, West’s Federal Forms)

Since the biggest chunk of All Analytical is equivalent to Law Reviews and Journals, while All Analytical is missing perhaps 90% of what is included in Results Plus, the value of All Analytical is much closer to $54.61/month (the current charge for Law Reviews & Journals) than the $209.55/month (after 45% discount) that you propose to charge me for All Analytical. At most, I would pay $100/month for All Analytical, as that database is currently comprised. I would pay $209.55/month for National Secondary Sources – Premium, but only if that plan includes all (or a significant number) of the databases included in Results Plus Pro.

I understand that, in WestlawNext, I have access to the entire secondary source in All Analytical, as opposed to only the first click in Results Plus. However, the whole point of the new WestSearch algorithm is to display the most relevant content alongside my search results (that is also the model for ResultsPlus). Therefore, the first click is generally all I need.

I proposed the following solution:

If National Secondary Sources – Premium, does not include all (or a significant number) of the databases included in Results Plus Pro and/or I can’t get it for $209.55/month, then can I do the following: in WestlawNext, take All Cases & Statutes + NY Analytical and retain in Westlaw only ResultsPlus + Law Reviews and Journals (all of which I calculate to come to $539.06)?

My rep’s response:

The value of the All Analytical package is in its inclusion of ALR, AmJur, Federal Practice & Procedure, Causes of Actions and Proof of Facts. These are huge and popular national analytical sets containing a great deal of information across all areas of law. The content is vastly more comprehensive than the Law Reviews & Journals database.

In all my pricing I have maxed out the available discount. I cannot change the pricing any further and exceptions beyond our discretionary discount (which is, as you know, a generous 45%) are not being considered.

Additionally, accounts can choose from Westlaw or WestlawNEXT. It is not possible to purchase databases from WestlawNEXT and Results Plus. (Practically, this would force you to run all your searches in both search engines).

We do have plans that allow you access to virtually all databases outside of your plan at a discount of up to 90%. For example, for $100/month you get up to $1000/month of ancillary usage. This would be a good way for you to expand your universe of available databases while maintaining cost certainty.

Perhaps you would be interested in a trial password for WestlawNEXT? This way you can use the two products side to side and make the best value decision for your practice.

And mine:

I find substantial value in having access to the 90% of Results Plus sources that are NOT included in All Analytical. In fact, I would appreciate if you can take a look at my account and provide me with a report detailing all of the sources I have used through Results Plus and the frequency of access.

I have used Westlaw Next. I am familiar with the value it can provide. The plans you suggest ($100/month for up to $1,000/month of out-of-plan usage) are not a good choice for me, since $1,000/month adds up very quickly. I want complete certainty.

The “discretionary discount” has a benefit for West, in that it locks in customers for 3 years.

I have no problem running my searches in both engines: it’s a simple copy and paste.

I asked my rep to put me in touch with his sales manager if he couldn’t do anything more for me. Here’s the sales manager’s response:

I received your message from [your sales rep]. You may contact me at your earliest convenience.

In advance, I will let you know that West has painstakingly put together its packages and prices with careful consideration. I assure you [your sales rep's] proposal has met the limits of pricing negotiation and options.

We will understand if you feel your current plan which includes Results Plus remains a better solution for you.

So the bottom line is this: even if I’m willing to pay an 11% premium for the power to search with the WestlawNext algorithm in the same databases I currently have access to on Westlaw, tough cookies. They’re going to change their offerings around enough to make it difficult for you to compare apples to apples. And, most importantly, they’re not going to let you eat just you want to eat: they want to stuff you until you explode, like some crazed Jewish grandmother on Shabbos. Oh (and to beat this food metaphor to death), they’re not going to let you eat just a few courses at the fancy new WestlawNext (the Bouley Restaurant of legal research), and pick up the rest of your meal next door at good ol’ Westlaw (Bouley Bakery/Market): if you don’t want to eat your whole meal at WestlawNext, it’s No soup for you!

Update 2/11/10, 11:30 a.m.: I received this message from my rep’s sales manager this morning:

After reviewing the proposals we sent, I noticed we failed to mention that this is an introductory pricing that we will not be offering after February 28th.

As with all of our proposals and emails, I am hoping this information would be kept confidential.

Not smart, West. Not smart at all.

Update 2/13/10, 1:00 a.m.: Last night, I sent the sales manager an e-mail requesting a complete list of sources included in the National Secondary Sources – Premium plan. I also responded to his request for confidentiality:

With respect to confidentiality, in my view there are no trade secrets involved in our negotiation. The process of upgrading to WestlawNext is like buying a new car. There’s an MSRP, and each option also has its own price. Packages can bring down the price of certain options. But would a car salesman ask you to keep your negotiations confidential? There is no reason—other than a desire to divide and conquer your customers and potential customers—to request confidentiality for these negotiations. “Transparency” goes beyond providing complete source lists (see Elwyn’s message of February 9): it must extend to pricing, too.

Just now (yes, I’m burning the midnight oil), I sent the sales manager this message:

Further to your message of 2/11, please advise what the prices will be for all WestlawNext plan components that I have discussed with [my sales rep] after February 28.

Additionally, please provide the URL(s) for any public statements by Westlaw informing the legal community that it would be offering “introductory pricing” for a total of 14 business days after launch, at a time when very few customers have had a chance to be exposed to WestlawNext, and before “Johnny and Jenny Westlaw” have even had an opportunity to visit six major markets. Certainly, there’s no way each rep can pitch all of his or her accounts, and negotiate plans for all interested customers, in that time frame.

I’ll update again once I hear back (which may not be until at least Tuesday, since Monday is a holiday).

How Does WestlawNext Differ from Westlaw?

Although he couldn’t make it to Eagan, Bob Ambrogi (who was one of the bloggers who got a beta preview) hit most of the high points of the new search tool in a post published yesterday. Laura Bergus of Social Media Law Student and David Bilinsky have also posted product reviews.

A few additional points are worth mentioning. First, although the ABA Journal reported that, as of December, West was still considering whether or not would allow users to perform boolean (terms and connectors) searches, at yesterday’s meeting the West representatives clarified that boolean searching is not being eliminated.

Second, although both Ambrogi and the ABA Journal refer to the ability to do “natural language” searches in WestlawNext, the West representatives explained that the WestlawNext algorithm for non-boolean searches is much more sophisticated than the algorithm used for natural language searches on Westlaw.com. In particular, it leverages West’s human-created content—including the key number system and other proprietary analytical content (such as statutory annotations and treatises)—along with KeyCite results and customer usage information to return more relevant results earlier in the research process.

Third, I’m intrigued by the fact that you can search in a database that is outside your subscription plan, and review the results list, without incurring search charges. Instead of charging for the search, with WestlawNext, you’ll be charged only for accessing the documents that you view in full text.

Pricing: the Elephant in the Room

There’s no question that WestlawNext is superior to Westlaw. Unfortunately (as the ABA Journal noted on Monday), that performance comes at a price.

When we asked, point blank, what that price would be, the West representatives didn’t have a simple answer. Instead, they explained that the company’s sales reps will try to convince customers to add additional content to their subscriptions at the time of upgrade. When pressed as to whether the upgrade would be pegged at a certain percentage of the cost of a subscriber’s plan, West denied taking that approach.

West’s non-response essentially leaves its subscribers in the dark and on their own when it comes to upgrade negotiations. As I see it, the best way to counter West’s strategy is to crowdsource solutions, a la BidonTravel.com. Perhaps some enterprising legal tech expert will set up a site like BidonTravel.com in the not too distant future; in the meantime, I invite you to discuss your experiences in the comments below.

I’d like to upgrade, but I know I don’t want additional content within my subscription plan. How West will respond to this position remains to be seen; I’ll report back on my negotiations with my account rep.

Finally, some advice for West: although I don’t have any statistics at the moment, my sense is that, since it lowered its prices a number of years ago, West has captured a significant portion of the small firm lawyers and solo practitioners who previously used Lexis. If WestlawNext comes at too high a premium, West may lose the ground it’s gained.

The article’s premise is that the application of technology to information has led to “the radical transformation of the legal publishing marketplace.”

According to the author, Peter Schwartz,

Data trumps documents. Legal, regulatory, and court documents – once intrinsically valuable – increasingly serve as mere information containers. New methods for tagging, extracting, organizing, and presenting information in documents create new possibilities for how quickly we can assemble, analyze, interpret, and disseminate this information.

Information is liquid. We now live in an ocean of information, and are swept along by its riptides and currents. The challenge is to manage our relationship to this information so it serves us our higher purposes. We need ways to filter real-time story-telling and reporting so we can identify narratives that have substance and reject those that are ephemeral, partial, distorted, or trivial.

So far, so good. I have no quarrel with these philosophical musings about the nature of information in the internet age.

But Schwartz’s conclusions are dead wrong.

According to Schwartz,

[c]ustomers will not pay for research. When online legal research platforms were proprietary, online publishers imposed per-minute and per-use pricing structures. This pricing model facilitated client cost-recovery and allowed publishers to use law firms as information wholesalers. Because information is now a commodity, law firm clients will no longer pay for online legal research. New flat-rate pricing models for online research products reflect this reality.

The large legal publishers are in trouble. If law firms can no longer pass through online research costs to clients, multi-billion dollar legal publishers such as West and Lexis can no longer support pricing models premised on law firm cost recovery. Because West and Lexis cost structures depend on this pricing model, they are beginning to experience painful margin squeezes, compounded by the entry into the legal research marketplace of both nimble, low-cost competitors and new rivals with deep pockets such as Bloomberg.

Let’s analyze this, shall we?

Customers will not pay for research. Who are the “customers”? The lawyers who conduct legal research so that they may advise (and frequently advocate for) their clients? Or the clients who hire the lawyers who conduct the research?

If it’s the former, then Schwartz’s company, Knowledge Mosaic, Inc., should find a new business model, pronto: they make their money by selling subscriptions to their Securities Mosaic Website and News Service for $1,250 per year.

If it’s the latter, I agree: as I’ve previously written, the ABA’s view notwithstanding, the cost of a firm’s online legal research subscription is a part of overhead that shouldn’t be passed on to clients.

Because information is now a commodity, law firm clients will no longer pay for online legal research. New flat-rate pricing models for online research products reflect this reality. The information itself has always been a commodity: it was just limited to hard-copy form in the past. Back then, lawyers understood that the cost of maintaining a library was no different from the cost of keeping the lights on: it was overhead, and the expense was considered when the lawyer set a fee for services provided. Conversely, as the ABA materials demonstrate, today, many lawyers (with the encouragement of West), are divvying up the cost of their legal research subscription plan amongst their clients.

The large legal publishers are in trouble. If law firms can no longer pass through online research costs to clients, multi-billion dollar legal publishers such as West and Lexis can no longer support pricing models premised on law firm cost recovery. This is refuted above. And, while I don’t keep up with the financial health of the two 500-lb legal research gorillas, I don’t see them going out of business any time soon.

Like it or not, Mr. Schwartz, Knowledge Mosaic isn’t the disruptive entrant into the legal research market that you try to paint it as. Following in the footsteps of West (and, to a lesser extent, Lexis), the company does many of the same things that these traditional legal publishers do:

• stored search capability (Westlaw’s Alert Center, anyone?)
• on-call customer support and research assistance “during regular business hours (typicially with no wait)” (Hello, 1-800-REF-ATTY, 24/7)
• search pages that allow you to target data buried in filings, including risk factors, exhibits, etc. (searching by field)

Based on the information on the Securities Mosaic website, the company has done a great job fulfilling the information needs of a niche market within the legal community. If it can do that better than Lexis and Westlaw, fantastic. But, despite its location in the trendy “industrial underbelly of Seattle—in modern facilities amidst train yards and commercial fishing docks,” it’s really not all that, just as Axiom is a dandified contract lawyer staffing firm, and not the “entirely new kind of firm” it bills itself as. But that’s another rant for another day.

According to the complaint, between October 2004 and May 2005, Chadbourne charge the named plaintiff, Texas businessman J. Virgil Waggoner, approximately $20,000 for legal research fees. Waggoner alleges that the charge should have been closer to $5,000.

The complaint alleges causes of action for violation of Cal. Bus. & Prof. Code §17200 (unfair business practices), unjust enrichment and fraud.

As the article points out (and as my research has confirmed), a firm may recover online legal research costs from its clients, and may even profit by adding a markup to those costs, as long as the client has agreed to such an arrangement. If Waggoner’s factual allegations are true—and, based on Chadbourne’s transparent effort to paint Waggoner as nothing more than a disgruntled former client by pointing out that Waggoner brought the California action only after his New York malpractice suit was dismissed and after the firm sued him for unpaid legal fees, I suspect they are—this suit is a cut and dried case in which a BigLaw firm desperately trying to prop up its PPP will finally get its well-deserved comeuppance.

But, although the article about the Waggoner case prompted me to explore the issue of recovering online legal research costs from clients, that case isn’t what got me all riled up: what’s upset me is what I discovered in the course of my further research.

I knew that the ABA’s GP|Solo Division had addressed the issue of recovering online legal research costs in a recent GP|Solo article as well as in a CLE session at last year’s National Solo & Small Firm Conference. So it was no surprise that my investigation into the issue quickly brought me to a page on the ABA’s website, where the Division has collected a number of resources about recovering the cost of online research. Since West is one of the primary sponsors of the GP|Solo Division, the Division’s interest in this issue is, shall we say, understandable.

Since I didn’t get a chance to attend the cost recovery CLE at the NSSFC last year, I decided to watch the session online. Now, I owe a great debt to the GP|Solo Division (sponsors of the Solosez listserv, which has been critical to the success of my law practice). Many of my closest friends and colleagues are very active in the Division. On a personal level, I like Keith McLennan, who presented the cost recovery session (and, to be honest, I’m not even sure that the contents of the session reflect his personal views—he may have been roped into presenting the session because he is a past chair of the Division). I’m even a big fan of Westlaw (as opposed to Lexis, at least). But I was disgusted with the rationales advanced for recovering from clients a cost that is part of a law firm’s overhead.

McLennan explains that lawyers used to consider the cost of online legal research to be part of overhead. As such, that cost was one factor lawyers took into account when setting their hourly rates. But ever-increasing hourly rates led to pushback from clients, he explained, so some firms have decided to recover the costs as disbursements.

The efficiency rationale also looms large. Under that line of reasoning, clients benefit from the use of online legal research because a research project that might take a lawyer using actual books five hours to complete can be completed in much less time using online legal research.

Then there’s the fairness rationale. Since a lawyer might use online legal research resources more for some clients than for others, says McLennan, it’s not fair for all clients to pay an hourly rate that is inflated by consideration of the cost of the lawyer’s online legal research subscription.

Of course, under this same reasoning, lawyers should be recovering from their clients the proportional cost of any tool that comes with a flat monthly fee. Do you pay a flat rate for long distance calling? By all means, go after your clients for their proportional share of your phone bill. After all, clients benefit when a lawyer can quickly resolve an issue over the phone, instead of writing a letter (which arguably takes more time and comes with its own associated overhead costs). And, since a lawyer talks to some clients more than others, it’s not fair for all clients to pay an hourly rate that is inflated by consideration of the cost of the lawyer’s long distance calling plan.

I’m not suggesting that lawyers should never bill clients for extraordinary expenses incurred when the lawyer must use a resource that is outside the scope of a reasonably broad flat-rate plan: I do it myself. As a legal research and writing services provider who lives in New York and serves clients nationwide, I maintain a Westlaw subscription that gives me access to all federal and state cases, statutes and regulations; law journals; and many New York-specific secondary sources. Through Westlaw’s ResultsPlus add-on, I also have access to an almost unlimited number of secondary sources that are relevant to the issues I’m researching. Nevertheless, on extremely rare occasions, it’s necessary to go outside my subscription plan. Sometimes I eat that cost; other times, I explain to the lawyer I’m working with why it’s necessary to go outside my plan, and obtain prior approval to incur an out-of-plan disbursement, which I then pass on to the lawyer at cost.

Still, cost recovery should be the exception, not the rule. Don’t nickel and dime your clients: when setting your rates—whether you bill by the hour, charge a flat fee, or use any other billing arrangement—take into account all of your overhead—including the cost of your online legal research subscription.