Law in Contemporary Society


[still editing a bit] -- By GraceChan - 17 Feb 2010

The Problem With the System Today

Unequal Access is Unequal Justice

A West report on the American Bar Association website attempts to promote Westlaw by offering the success story of one lawyer who surprises another at a settlement conference with a case decided just a few days earlier that was accessible through Westlaw. It is troubling when Westlaw and, by association, ABA touts this kind of better access to legal information as a way to one-up the opposing counsel. This isn’t better lawyering or even better research ability; it simply means the client and his lawyer are able to afford better access.

After our research memorandum last semester, our instructor informed our class that we each would have just cost our employers roughly $20,000 in legal research costs. The moral: learn to search efficiently, save your employers money. There were two things that struck me about this. First, there is the troubling fact that Lexis and Westlaw basically run the legal research class and subsidize the databases for law students as part of a long term sales pitch. (Perhaps one relatively modest change to the class would be to have Columbia instructors provide their own Lexis and Westlaw training in addition to teaching lower priced alternatives that are available.) Second, I was simply stunned at the price tag of legal information and its implications for smaller firms and poorer clients.

It turns out that legal research costs are often the second highest cost at smaller law firms, after personnel costs. Although both Westlaw and Lexis offer limited access packages at lower prices for small firms and solo practitioners, such tight-budget lawyers are often still unable to afford either Westlaw or Lexis. And what about the enterprising individuals and pro se parties who want to take it upon themselves to research a legal issue but who are unable to access Westlaw or Lexis? Unequal access to legal information thus leads to substantive inequality because those who can afford better access can afford better outcomes.

The Vendor-Firm-Client Structure

In 2008, the legal division of Thomson West generated $3.5 billion in revenue with a whopping operating profit margin of 32.1%. One contributing reason is that for the past 25 years, firms have operated on a model of passing online legal research expenses to the client, a practice encouraged by Westlaw and Lexis themselves as a way of paying for their high fees. This practice of passing online research costs onto clients meant that law firms had less of an incentive to pressure the vendors on price. Further, like most oligopolies, Westlaw and Lexis compete on product differentiation (for example, adding tabs and sidebars) rather than on price or in enhancing usability. Fortunately, this may soon change. The cost recovery model seems less and less viable in light of the move away from hourly billing and clients refuse to bear the online research costs.

The Future of Legal Information Access

How John West Made His Fortune

In 1872, John West, recognizing an inadequately-filled niche in the legal information market, began to issue a series of reporters tied to geographic regions containing all the latest court decisions. Prior to his entry into the market, legal information was in disarray. An excessive number of reports was in circulation with no coherent system of organization. Significant time lags existed with the slow release of state court decisions and the delayed availability of publications from the East Coast to the west.

The Internet Changes Everything

Today, we no longer need to worry about typesetting handwritten opinions or time lags in the availability of information. As more courts begun using word processing to write its opinions, digital copies are made immediately available. Transmission costs are lower while search algorithms continue to improve. Sites such as Justia and Cornell's Legal Information Institute offer free large collections of legal documents. States such as Wyoming, Oklahoma, and North Dakota courts post final and official opinions online on the day of decision with their own vendor-neutral citation systems.

//In fall 2009, Google Scholar rolled out a new search feature for legal texts. Although not posing a serious threat to Westlaw or Lexis yet, it has taken over the niche of free search services like AltLaw? and PreCYdent? , both of which have shut down in its wake. Google Scholar is overseen by three people, none of whom have a legal background. As always, Google’s strategy is to index everything and focus on improving search algorithms. Designed for members of the public, its brand name alone may at least give the public a sense of empowerment. Westlaw and Lexis have already been spurred to offer natural language searches as a result of popular search engines like Google.

Collaboration: Wiki-Law? (To an Extent, Anyway)

Also with the Internet comes the potential for large-scale distributed collaboration. As demonstrated by entities like Wikipedia, networks of volunteers can now do things that previously only large businesses with deep enough pockets and large enough staffs could have done. However, any such new platform will need to overcome the hurdles of funding and authenticity. West, after all, employs a 22-step editorial process of 800 attorney-editors who analyze the cases, write the summaries, and approve computer-generated recommendations, with multiple people cross-checking each other's work and has been around for over a century. It may take a while for lawyers and judges to embrace an information service that is neither Westlaw and Lexis as an accurate and reliable source.

Still, it is encouraging that a 2005 study by Nature found Wikipedia to be almost as accurate as Britannica, an encyclopedia whose existence predates the United States. After researching and writing a substantial part of my moot court brief on copyright infringement, I looked up the Wikipedia entry of fair use out of curiosity and was impressed. It covered every major case I used, including distinguishing factors and short, accurate descriptions. To address the issue of authenticity, perhaps we can take a page out of CanLII? or BAILII's books; those projects involve professional law societies and collaboration within the legal profession to a significant extent.

Nice job with this. You might want to take a look at Law.Gov if you're not already familiar.

-- GloverWright - 24 March 2010

Thanks, though I'm actually still pretty far from where I hope to be with this paper. I think I'm going to cut out an introductory paragraph in favor of a paragraph on the current copyright obstacles. I also need to strengthen my Google Scholar analysis if I choose to keep it in (though to be honest, I'm not sure of the impact it will have in the long run).

-- GraceChan - 26 March 2010

Everyone involved, including Lexis and Westlaw, understands that they are inevitably going to be affected by Internet-caused disintermediation. They are classic information intermediaries, and their businesses are not only vulnerable, they are doomed. The question is how long it takes, and how much money they can extract from everyone in the meantime.

Your analysis is accurate, but accuracy does not necessarily produce insight. Inequality of access is a shrinking problem, in the first place, though a problem, precisely because the complementary access mechanisms are reducing the exclusivity enjoyed by the duopoly for most of the last twenty years. Non-profit pricing, while hardly generous, does shift the access curve, as do the government acquisitions agreements. Less well-heeled private parties may now be the primary losers, and I'm not sure that's precisely a tragic outcome most of the time.

What will change, and that should have immediately attracted your attention, is the approach at the upper-levels of the profession. Once the biggest enterprises' legal services are transacted for at fixed prices (the transformation now going on that wipes out the jobs for first-year large-firm associates) the desire inside those practices to reduce research overhead becomes serious. Information cost was always next to labor cost for firms—when they ran big libraries and publishing operations, requiring all the costs of library management, immense printing and copying expenses, they put what they could on the disbursements account, and charged off the rest as overhead in the hours billed. What the research services did was to consolidate increasing proportions of those research costs in their bill: West used to get paid for many reporter subscriptions in the paper library, but it didn't capture the rent or the salaries, or all the other books and services, etc. Big practices reduced cost even when they paid the services plenty, by getting out of more inefficient information management operations. Which made the duopoly immense money.

Now the two companies will face off against one another to hold those dollars, as their biggest customers bargain for reduced prices that they can no longer pass along fully to their clients, as they also try wildly to deleverage their immensely-expensive workforce that is inefficient for fixed-price production. At the same time, existing complementary services that don't charge, along with the coming government-information revolution, ensure that the disintermediation meltdown will begin soon. It's not springtime for these little you-know-whats, I promise you.

In that environment, the best play the services have to increase their longevity is to hook more young people. The law schools can't start officially teaching you to do without them, or they'll have to go cold turkey from an addiction on which their library budgets also now depend. And the services keep handing out free heroin to students so that you never learn about the non-addictive substitutes, or contribute to them, which would be their immediate death.

What you see, you saw correctly. But what you missed is where the story is.


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r10 - 13 Jan 2012 - 23:14:13 - IanSullivan
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