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Competitive

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									                                                                                                          Milbank
                                                                                                 library director
                                                                                                    Alirio Gomez




                  Competitive
                  Advantage
                      Steven Spiess,
                   executive director
MATT GREENSLADE




                  Business intelligence—finding, analyzing,
                   of Cravath, Swaine
                   & Moore. He’s the
                  and leveraging it—reshapes the role of law librarians.
                   leader of the pack
                  By	Alan	Cohen
                   on disaster pre-

                                                                           July/August 2008 Law Firm Inc.   00
              F
                            rom the forty-eighth-floor library at           library staff—isn’t the death knell for the law firm
                            Milbank, Tweed, Hadley & McCloy’s               library, but the start of its next, better, technologi-
                            New York headquarters, the view is              cally advanced phase. Through online hubs like
                            revealing. But it’s not just the outside        the Milbank Research Portal, lawyers will have fast,
                            world—the bridges and buildings of              fine-tuned access to the resources they need. Li-
              Manhattan—that catches the eye. Within, there                 brarians will have more control over what sources
              is a world that’s changing, too. On first glance, it          are used—and what expenses are incurred. Pub-
              wouldn’t seem for the better. As part of a renova-            lishers will no longer have all the leverage when
              tion last year, Milbank’s library space was cut from          negotiating contracts for licensed materials; and, in
              10,000 square feet to 3,200. Many, many books are             the end, clients will get better service that’s more
              gone—enough, perhaps, to start a small law school.            cost-efficient, too.
              Even now, on what is otherwise a bustling summer                 Over the past few years, change has become
              morning, the silence seems a bit eerie. There is no           more than a buzzword among law librarians. It’s
              one looking at the books that remain; just a few              become, perhaps, the defining characteristic of the
              people standing around computer terminals.                    profession. Librarians have seen the nature of their
                 But Alirio Gomez, the librarian-technologist-              work evolve; many now spend as much time as-
              MBA who oversees research at Milbank, couldn’t                sisting with business development tasks as with
              be happier. “I could get rid of all the books, but            traditional legal research. They’ve had to become
              a couple of attorneys here still like them,” says             experts on technology—particularly Web-based
              Gomez, his shrug an unspoken go figure. “Clients              delivery methods—and aggressive in negotiating
              are looking for more efficiencies and more value-             content licensing agreements. And they’ve had to
              added service, and this,” he says, pointing to the            make their case—and often their plea, for resourc-
              giant flat-panel display that has essentially become          es—to a growing number of nonlawyer adminis-
              the new “walking tour” of the library, “is how we             trators who don’t always understand the library’s
              provide it.”                                                  role, or why it needs to spend so much money.
                 In fact, says Gomez, the shrinking space—and at               Each year, The American Lawyer’s annual survey of
              some large firms, including Milbank, the shrinking            law librarians has highlighted both the new and the


              	 THE	LIBRARIAN’S	EXPANDING	ROLE
                Is the library an independent department within the firm?     Do you manage your firm’s intranet?

                 Yes	                                  83%                     Yes	                                 18%
                                                        1
                 No,		it’s	part	of	another	departmentent	 7%                   No	                                  82%

                Who does the library director report to?                     Competitive	Intelligence
                	                                     2007	        2006	     Is the library the main resource for developing
                COO,	director	of	administration,		                           competitive intelligence?
                or	executive	director	                 62%	         63%	     	                                      2007	      2006
                CIO	or	IT	director	                    18%	         18%	     Yes	                                    50%	       63%
                Managing	partner	                       4%	          3%	     No	                                     50%	       37%
                CFO	or	finance	director	                1%	            -	
                Other	                                 14%	         16%      To whom does the competitive intelligence
                                                                             division report?
                What other departments within your firm are                  	                                         	 Percentage
                you responsible for?                                         Marketing	                                	       38%
                	                                        	 Percentage        None	                                     	       22%
                Conflicts	                               	       34%         Library	                                  	       21%
                Records	                                 	       29%         Library	and	marketing	                    	        5%
                Continuing	legal	education	              	       17%         Other	                                    	       14%
                Knowledge	management	                    	       17%
                Court	services	                          	       11%         Is the library the main
                None	                                    	       11%         resource for marketing                 No	
                Docket	research	                         	        9%         research?                              38%
                Information	systems	                     	        3%                                       Yes	
                Other	                                   	       37%                                       63%
                Multiple responses were allowed.




6 Law Firm Inc. July/August 2008
              expanding challenges that law librarians face. But        cates, savvier negotiators, and vital contributors to
              this year’s survey shows something else: Librarians       the firm’s business—and growth.
              are getting a handle on many of these issues. They           “Everyone is saying the biggest challenge we
              are leveraging technology and developing strategies       face is cost reduction and cost containment, but
              to prevail over vendors, budget constraints, and          I think what’s really different now is our opportu-
              that never-ending pressure to watch costs.                nity to be part of the revenue stream, rather than
                All told, the survey reveals a generally happy lot.     a back-office cost,” says Linda Will, director of in-
              An overwhelming 85 percent of library directors           formation resources at Dorsey & Whitney. “We’re
              are satisfied with their job; 78 percent approve of       taking an active role, for example, in competitive
              recent decisions firm management has made re-             intelligence, and can now calculate our [return on
              garding the library; 77 percent are okay with the         investment], putting dollar amounts not only on
              new roles played by the library. True, their pay-         what we do, but what we bring in.”
              checks may have something to do with the good-               Indeed, competitive intelligence continues to
              will: 32 percent earn $150,000 or more (and 3             grow as a key focus of the libraries. Fully half of
              percent earn $300,000 and up). But in the course          survey respondents said that the library was now
              of more than a dozen interviews, another factor           their firm’s main resource for developing the infor-
              emerged: satisfaction in becoming tougher advo-           mation. The nature of this work is changing, too.


              	 FINANCES
                What is the total 2008 budget for the library’s          How much did the firm spend in 2007 on print materials?
                firmwide operation?                                      	                               2007	            2006
                	                              2008	            2007     Average	                $1,723,278	       $1,513,001
                Average	                 $5,899,610	       $4,251,627    Median	                 $1,300,000	       $1,134,134
                Median	                  $3,804,055	       $3,500,000
                                                                         What was the change in total spending on print
                                                                         products from 2006 to 2007?
                How does the 2008 budget compare to what was spent       	                                   	      Percentage
                in 2007?                                                 More	than	a	10%	increase	           	            23%
                                                     The	2008	           5–10%	increase	                     	            41%
                                                     budget	is	          Less	than	a	5%	increase	            	            12%
                      The	2008	                      smaller.            No	change	                          	             4%
                      budget	is	                                         Less	than	a	5%	decrease	            	             8%
                      larger.                        They	are	about	     5–10%	decrease	                     	             5%
                                                     the	same.           More	than	a	10%	decrease	           	             7%

                                                                         Compensation
                                                                         How much did the firm spend in 2007 on library staff
                                                                         in all offices?
                How much did the firm spend on electronic resources      	                             2007	             2006
                in 2007 (excluding LexisNexis and Westlaw)?              Average	                $1,311,570	      $1,074,550
                	                              2007	           2006      Median	                  $700,000	         $720,000
                Average	                  $929,308	        $970,782
                Median	                   $592,375	        $406,659      Compensation by library position:
                                                                         	                            Average	         Median
                                                                         Chief	librarian	          $137,388	         $125,000
                How much did you spend on LexisNexis research in         Deputy	librarian	          $92,460	          $83,450
                2007?                                                    Branch	office	librarian	   $75,479	          $75,000	
                	                            2007	             2006      Special	librarian	         $72,043	          $70,700
                Average	               $1,154,860	      $1,234,631
                Median	                 $779,001	         $805,469       How much, including bonus, did the top librarian at
                                                                         your firm earn last year?
                                                                         $300,000	or	more
                How much did the firm spend on Westlaw research in
                2007?                                                    $200,000	to	                            $100,000	to	
                	                             2007	           2006       $299,999                                $149,999
                Average	                $1,998,674	     $1,681,399       $150,000	to	                            Less	than	
                Median	                 $1,500,000	     $1,150,000       $199,999                                $100,000




8 Law Firm Inc. July/August 2008
              While much competitive intelligence still consists        don’t get done. “Competitive intelligence is a lot of
              of research and analysis of clients, potential clients,   work, requiring us even to go off-site to academic
              industries, events, and litigation that might be ripe     and other libraries, and the staff will neglect their
              for pitches—“partners don’t want 1,000 pages of           other stuff,” says a library chief who declined to be
              printouts, they want us to read it and synthesize it      identified.
              ourselves,” says one library director who declined           Yet many librarians contend that it’s not the drain
              to be identified—the rise of Web 2.0 technologies         on resources that’s the real problem—but the dif-
              has forced librarians to shift gears a bit.               ficulty in getting more resources. “Your reward for
                  But today’s online world is a two-way street. Law-    being good is more work, but at the same time, it’s
              yers and library staff can, as always, search for and     hard to get an increase in staff,” says Kate Martin,
              retrieve (or “pull”) the information they need. How-      director of library services at McKenna Long &
              ever, an increasing number of content providers—          Aldridge. Some firms have recognized—either on
              from fee-based publishers to free blogs—are taking        their own or, occasionally, after a telenovela’s worth
              a more proactive approach. Instead of waiting for         of drama—the role of the library in developing
              users to call on them, they’re sending (“pushing”)        competitive intelligence. They’ve hired, if not more
              information directly                                                                      research librarians,
              to the desktop. The                                                                       then at least a librar-
              delivery methods are             I know better than                                       ian or two special-
              numerous, including                                                                       izing in competitive
              daily newsletters on         to ask for more staff,                                       intelligence.
              a specific topic and                                                                         Meanwhile, many
              e-mail alerts. There’s     confides one librarian.                                        library directors have
              often a lot of great                                                                      gotten good at creat-
              data—and potential leads—but busy lawyers have            ing metrics, showing just how much time they’re
              little time to shift through it. So, increasingly, law    spending on business development tasks. That can
              libraries are taking the initiative, becoming, in ef-     help when making the pitch for more staff. But
              fect, information gatekeepers, determining what           not always. “I know better than to ask,” says one
              content gets passed along, and how.                       library director who requested anonymity. Adds
                  Some firms are taking a high-tech approach, de-       another: “Whenever IT staff needs new staff, they
              veloping innovative ways to manage, and leverage,         get it. But there’s always a reluctance to hire more
              all the content that’s being pushed and pulled. At        in the library.” According to our survey, 56 percent
              Sheppard, Mullin, Richter & Hampton’s library, for        of the libraries are operating with the same size, or
              example, a librarian versed in Web programming            smaller, staff than they did a year ago.
              is building an application that, when completed,             On the surface, that doesn’t seem to make a lot
              will be able to collect information on a specific         of sense: Libraries are, arguably, doing more im-
              topic, such as climate change, and post it to a page      portant work than ever—work that can result in
              on the firm’s intranet. The idea, says Martin Korn,       new business. Yet they often can’t get the staff they
              Sheppard, Mullin’s head librarian, is to take the in-     need to do this very same work. The reason, per-
              formation that’s being delivered in all those differ-     haps, lies in the org chart. While it may be the li-
              ent ways from all those different sources and bring       brary gathering competitive intelligence, it’s often
              it together in a manner that is easily accessible to      the marketing department handing off the report.
              lawyers. “People can open a link,” says Korn, “and        In just 21 percent of firms responding to our sur-
              retrieve content on a topic, industry, or company,        vey does the competitive intelligence department
              and then filter it to suit their needs.”                  report to the library. In 38 percent, it reports to
                  Yet while technology can efficiently sort and de-     the marketing department (in 5 percent, it reports
              liver content, it’s still a human being that’s in the     to both, but that’s a whole other set of issues). “It’s
              best position to make sense of it, deciding what’s        hard to make the argument that we need more staff
              important enough for a time-challenged attorney           if they see the work coming from marketing and
              to see and what can be discarded. So at many firms,       not from us,” says one library director.
              the process of “massaging” data, as the librarians           Budgets are another touchy subject for the li-
              tend to call it, is still very much a manual—and          brary chiefs. In absolute terms, they’re increasing:
              time-consuming—process.                                   73 percent of respondents said their 2008 budgets
                  But sometimes there’s a price to pay for the focus    were up from 2007. Indeed, average spending in-
              on business intelligence: traditional reference tasks     creased from $4,251,627 to $5,899,610 (though


10 Law Firm Inc. July/August 2008
              median spending barely budged, coming in at              But others, he adds, particularly those that have
              $3,804,055 in 2008, compared to $3,500,000 in            been around a while, make use difficult and expen-
              2007). But much of the added spending is simply          sive.
              to keep up with price increases for content. While          Print, it turns out, isn’t easy on the budget, ei-
              LexisNexis costs were down slightly last year—av-        ther. Even as libraries shelve fewer books, they’re
              eraging $1,154,860, compared to $1,234,631 in            spending more for them: 76 percent of firms re-
              2006—Westlaw fees were up markedly, averaging            ported spending more on print materials in 2007
              $1,998,674, compared to $1,681,399. And that’s           then they did in 2006. That’s forced firms to ag-
              not simply because lawyers spent more time on the        gressively weed out even more of their paper-
              service; 85 percent of firms have a flat-rate contract   bound resources.
              with Westlaw (81 percent have one with LexisNex-            One way librarians are leveling the playing field
              is). [The American Lawyer’s parent company has a         is by leveraging technology to control costs. The
              licensing deal with Westlaw.]                            thinking: It’s worked for internal costs—Latham
                 Further straining budgets—as well as patience—        & Watkins, for example, directs all requests for
              are what librarians contend are draconian licens-        research assistance to a single e-mail address, so
              ing terms forced on them by some of the smaller,         when it’s the middle of the night in Los Angeles, a
              specialized electronic research vendors. Among           librarian in Germany can answer the request, pro-
              the less popular policies: licensing a database to       viding, in effect, 24/7 service without paying for
              ten specific users, instead of any ten users, so if a    24/7 staff. So why not for external costs?
              named attorney is out for the day, no one else can          The research portals that more and more firms
              use the service in his place; prohibiting use by li-     are developing can control costs simply by steering
              brarians; and forcing the entire firm to subscribe       preferred vendors to lawyers. Lawyers who see a
              to—and pay for—a service that just ten lawyers in        practice group page listing resources are more apt
              one practice group need. To be sure, there are signs     to use one of those than go hunting for another,
              of improvement. “The publishers that are new to          possibly more costly one. But a lot of firms are go-
              the industry tend to be better, offering simple li-      ing a step—or more—further. Some strategies are
              censing terms and reasonable pricing,” says Korn.        relatively simple. “We’ve considered putting dol-


              	 ELECTRONIC	RESOURCES
                Do you have a flat-rate contract with LexisNexis?       The	Future
                                                                        Do librarians play an active role in the firm’s
                 Yes	                               81%                 knowledge management efforts?
                 No	                                19%                 	                                     2007	         2006
                                                                        Yes		                                  75%	          84%
                                                                        No	                                    25%	          16%
                Do you have a flat-rate contract with Westlaw?

                 Yes	                               85%                 Do you have any Bloomberg terminals?

                 No	                                15%                 	 Yes	                                40%	
                                                                          No	                                 60%
                What percentage of online charges paid to LexisNexis
                and Westlaw does the firm recover from clients?
                	                                  2007	        2006    Do you anticipate moving toward a single-vendor
                40%	or	less	                         9%	         14%    approach for electronic research within the next five
                41–60%	                             18%	         10%    years?
                61–80%	                             39%	         38%    	                                  2007	          2006
                81–100%	                            31%	         30%    Yes		                               12%	           18%
                Not	applicable	                      3%	          9%    No	                                 88%	           82%

                How does online cost recovery compare for LexisNexis    If yes, which vendor are you leaning toward?
                and Westlaw usage at your firm?
                                                                             LexisNexis
                	                                 2007	         2006
                LexisNexis	recovery	is	better.	    10%	          11%
                                                                             Westlaw
                Westlaw	recovery	is	better.	       45%	          35%
                They	are	about	the	same.	          42%	          48%
                We	don’t	recover	online	charges.	   3%	           7%                                            Out of 12 responses




12 Law Firm Inc. July/August 2008
              lar signs next to each source, like in a restaurant
              review,” says Marcia Burris, library manager at          	 STAFFING
              Ogletree, Deakins, Nash, Smoak & Stewart. “The            I am satisfied with management’s recent decisions
                                                                        regarding the library.
              more dollar signs, the higher the cost. So users can
                                                                        	                            2007	             2006	
              decide if it’s worth it.”                                 Agree	                         33%	             35%	
                 Other strategies are more sophisticated. Analyt-       Mostly	agree	                  45%	             45%	
              ics—an area more and more librarians are looking          Ambivalent	                    16%	             12%	
              into, with new and more capable software tools            Mostly	disagree	                 6%	              9%	
                                                                        Totally	disagree	                1%	                -
              entering the market—can reveal when resources
              are used, by whom, and for how long. This kind            I am satisfied with my compensation.
              of information can be a powerful bargaining chip          	                             2007	               2006	
              when negotiating new usage contracts. “We’ve used         Agree		                        32%	                37%	
                                                                        Mostly	agree	                  38%	                46%	
              analytics to figure out just how expensive a service      Ambivalent	                    13%	                11%	
              really is, and we’ll show that to the vendors,” says      Mostly	disagree	               17%	                 7%	
              Milbank’s Gomez. “Often, they’ll then come up             Totally	disagree	                  -	                 -
              with a solution, perhaps giving us a discount or
                                                                        In general I am satisfied with my job.
              building a better interface to increase usage. Some-
                                                                        	                               2007	             2006	
              times we’ll just discontinue use.”                        Agree		                           47%	             43%	
                 Technology also enables Milbank to eliminate           Mostly	agree	                     38%	             44%	
              duplicate searches—and the duplicate charges that         Ambivalent	                       12%	              9%	
              result. The situation: Two lawyers in two offices,        Mostly	disagree	                   3%	              4%	
                                                                        Totally	disagree	                     -	              -
              working on the same transaction, will each do the
              same search—say, looking for current news about           How many of the firm’s offices have libraries and
              a deal. The firm gets charged twice. The solution:        library staff?
              developing profiles on specific clients and trans-        	                               2007	             2006	
                                                                        All	offices		                     9%	              11%	
              actions and proactively running the searches—             More	than	half	of	the	offices	   44%	              45%	
              once—with results then available on demand to             Less	than	half	of	the	offices	   30%	              32%	
              any user who is logged into the portal. “You no           Only	the	main	office	            16%	              12%
              longer have each lawyer doing their own search,
                                                                        How many librarians does the firm employ firmwide?
              duplicating efforts and fees,” says Gomez.
                                                                        	                              2007	
                 But the librarians’ newfound, tech-driven leverage     Average	                        9.29	
              isn’t the only thing that’s changed the face of con-      Median	                            7
              tract negotiations. While our interviews turned up
              the traditional anecdotes of vendor intractability—       How has the number of full-time employees changed
                                                                        in the past two years?
              requiring firms to take a product they don’t want, to     	                              2007	          2006	
              get one they do; take-it-or-leave-it prices—they also     We	have	more.	                  44%	           45%	
              uncovered something else: These stories, in contrast      We	have	fewer.	                 18%	           19%	
              to years past, now seem to be the exception. Librar-      We	have	the	same	number.	       38%	           36%
              ians aren’t dreading contract negotiations like they      Is it harder to recruit law-trained librarians now than
              used to, partially because they’re getting better at      it was five years ago?
              it, and partly, as McKenna Long’s Kate Martin de-         	                                  2007	            2006	
              scribes her own recent experience negotiating deals       Yes,	it’s	harder.	                  60%	             62%	
                                                                        No,	it’s	easier.	                    1%	              8%	
              with West and Lexis: “They just seemed hungrier
                                                                        The	market	for	recruiting	law-trained	librarians		
              this time, much more willing to negotiate.”               has	remained	the	same.	             39%	             30%
                 But there’s another factor here, too. Increasingly,
              library directors are seeking outside help to snag        What is the average number of hours a full-time
              the best possible deal. They’re hiring consultants to     research staff member bills to clients each year?
                                                                        	                               2007	            2006	
              do the bargaining. In particular, they’re seeing that     Average	                          378	            406	
              take-it-or-leave-it pricing doesn’t always need to be     Median	                           300	            325
              taken or left. “One of the vendors said they simply
              would not negotiate,” says Martin. (She declined to       What is the average billing rate of the library staff?
                                                                        	                                2007	              2006
              say which vendor.) “We called in an outside person.       Average	                         $145	              $144
              He analyzed the contract, got it down—even more           Median	                          $145	              $148
              than we had [pushed for].”
                                                   For more information about the librarian survey, visit lawfirminc.com.

14 Law Firm Inc. July/August 2008
   The downside, say two librarians who declined to           Now that they’re seeing some success at the bar-
be identified, is that working with consultants—who        gaining table, the buyer’s remorse librarians used to
typically are paid a percentage of the savings they        experience has been replaced by a different kind of
obtain—can itself be an unsavory business. “Some           regret, namely: What took so long? “I don’t know why
of these consultants are like junkyard dogs, very          we cowered before—we’re the customer,” says Dorsey
difficult people,” says one library director. But that,    & Whitney’s Will. “In the last year or two—and cer-
she adds, is what makes them good at what they do.         tainly in 2008—we’ve become extremely aggressive.”
There’s something else that makes them effective: By          But getting tough with vendors is just the first
working on multiple deals, they know which firms           step. In order to do their job well—and get the re-
are getting what—a handy piece of inside baseball,         sources they need—library directors will need to be
given that these contracts are typically confidential.     aggressive advocates within their firms, too. That’s
“They may know that another firm got a better deal,        something that’s rarely come easy, but is essential to-
and they’ll give you a sense of what you can and           day. “We’re not like marketing, where it’s just in their
can’t get,” says this librarian. In fact, sometimes just   blood to toot their horn,” says one law firm librarian.
the threat of bringing in a consultant is enough to        “But we can no longer just sit around and wait for
get some movement on price: “Some vendors will             the rest of the world to recognize us. Like it or not,
offer you a better deal if you agree not to bring in a     we’re in the business world now.”
third party,” she says. “And if [we] think we’re get-
ting a reasonable offer, we won’t bring them in.”          E-mail: alanc31@yahoo.com.


  Our seventh annual Law Librarian Survey was conducted this past spring. We surveyed head librar-
  ians at Am Law 200 firms about the librarians’ responsibilities and the library’s budget, resources, and
  staffing. Ninety-four librarians responded. Some percentages may not add up to 100 due to rounding.
  Others may exceed 100 percent because respondents were allowed to select multiple responses. Not
  all respondents answered all questions.                                                —Craig Savitzky

								
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