Docstoc

Law Firm Legal Information Service Research

Document Sample
Law Firm Legal Information Service Research Powered By Docstoc
					Solo and Small Law Firm - COST RECOVERY




ABA GP/SOLO MEMBERSHIP
    SURVEY RESULTS
    Objectives
This research was intended to gather information to better
understand current cost recovery practices and challenges in
small law firms.

The objectives of the research were to:
–   Identify which components of cost recovery costs are recovered
–   Understand which costs are not recovered
–   Determine who at the firm is involved in the recovery process
–   Identify tools and products used to recover online research costs
–   Discover what aspects of the cost recovery process are difficult



                                                                        2
Survey Background

• Survey was open from April 23 – April 28th, 2008

• A total of 585 respondents completed the survey

• Response rate - 6%.




                                                     3
Findings
   ONLINE LEGAL RESEARCH SUBSCRIPTION SERVICES

          2/3 of respondents subscribe to Westlaw or Lexis

                    Westlaw                                                                   42%


                       Lexis
                                                                                                           66%
                                                                      24%


                   FastCase              5%


                     Loislaw         4%


                 CaseMaker          3%


                      Other                         11%
                                                                                          1/4 do not
                                                                                         subscribe to
             None/Don't know                                                28%
                                                                                         OLR services
                               0%    5%       10%         15%   20%   25%   30%   35%   40%    45%   50%

 n=582
                                                                                                                 5
To which paid legal research services does your firm subscribe?
  COST RECOVERY PRACTICED

         1/2 of respondents attempt to recover all or part of
                   their online legal research costs




                                   No,                                           Yes,
                                   50%                                           50%




n=417
                                                                                                                6
Does your firm attempt to recover online research related costs by billing all or part of it back to clients?
Cost Recovery - Practiced
  COST RECOVERY PRACTICED


  COST RECOVERY POLICY

          Nearly 1/2 review costs on client by client basis,
          while 1/4 attempt to bill back all costs to clients
       We review costs on a client by client
        basis and write-off those costs we                                                               45%
     believe should not be billed to the client


        We attempt to bill back all costs to the
                                                                                          26%
                        client


       We usually only bill-back extraordinary
                                                                                       21%
             expenses to our clients



                                                            Other            9%


                                                                    0%   5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
n=209
Base = those who attempt to recover online research costs
                                                                                                                  8
Which statement best describes your firm’s cost recovery policy for online research expenses?
  COST RECOVERY PRACTICED


  COMPONENTS INCLUDED IN COST RECOVERY

      Legal Research Costs Included in Cost Recovery Efforts

  Out of plan charges (usage outside your contract)                                81%                Most
                                                                                                 respondents
  Document retrieval such as dockets, briefs, or                                                  include out
  other court filings from an online service                                       69%
                                                                                                     of plan
                                                                                                 charges and
  Copying charges                                                                  54%             document
  Online subscription charges                                                      40%            retrieval as
                                                                                                  part of their
  Printing charges                                                                 39%                legal
  Downloading                                                                      17%              research
                                                                                                     costs.
  Other                                                                             7%


n=194
Base = those who attempt to recover online research costs
                                                                                                              9
What components of the legal research costs are included in your firm’s cost recovery efforts?
COST RECOVERY PRACTICED


PERCENT OF CHARGES RECOVERED

     On average respondents recover about 2/3 of the online
  subscription charges or out of plan charges they bill to clients


  Overall, about what percentage of actual (Westlaw/LexisNexis)
  online subscription charges does your firm recover from clients?

                                                                Mean: 62%
  n=76
  Base = those who attempt to recover online research costs and include online subscription charges in their cost recovery efforts




   Overall, about what percentage of actual (Westlaw/LexisNexis) out
   of plan charges does your firm recover from clients?
                                                                 Mean: 67%
   n=156
   Base = those who attempt to recover online research costs and include out of plan charges in their cost recovery efforts




                                                                                                                                     10
   COST RECOVERY PRACTICED
   PRIMARY LEADERSHIP FOR SETTING AND
   MANAGING COST RECOVERY POLICY

             Partner(s)                                                     62%
                                                                                             Partners are
              Attorneys                                 26%                                 most commonly
                                                                                              involved in
 Office Manager /                                                                             setting and
                                              15%
Firm Administrator
                                                                                             managing the
   Paralegal / Legal
                                   4%
                                                                                            policies around
      Secretary
                                                                                            cost recovery.
               Librarian          2%


                    Other           5%

                             0%       10%      20%      30%   40%   50%   60%   70%   80%    90%   100%

 n=210
 Base = those who attempt to recover online research costs
                                                                                                              11
Who at the firm is involved in setting and managing the policy for online cost recovery?
 COST RECOVERY PRACTICED


 FACTORS CONSIDERED FOR COST RECOVERY

    Over 1/2 indicated that an attorney’s experience at other law firms
         was considered when setting their cost recovery policy

       Considerations in Setting Firm’s Cost Recovery Policy
                                                                                      Yes        No    Don’t Know

 Attorney’s experience working at other law firms                                    55%         34%      11%
 Other Solo or small law firms’ cost recovery principles                             37%         46%     17%
 ABA guidelines                                                                      28%         51%     21%
 Bar associations’ or other legal organizations’ policy papers                       22%         62%     16%
 Articles or white papers about cost recovery                                        20%         61%     19%
 Other                                                                               13%         52%     35%

n=190
Base = those who attempt to recover online research costs

For each of the following statements, please indicate whether or not the factor was considered                  12
when setting your firm’s cost recovery policy.
   COST RECOVERY PRACTICED


   COST RECOVERY TOOLS

           Tools developed in-house are the most commonly used cost
             recovery tools, 1/4 of respondents also use QuickView+

                               Cost Recovery Tools Currently Used
                                                                         Yes             No        Don’t Know
          Other tools developed in-house                                29%            57%                14%
          QuickView Plus (Westlaw)                                      25%            62%                13%
          LexisNexis PowerInvoice                                       14%            74%                12%
          APS LookUp Precision                                             -           87%                13%
          Other                                                         13%            66%                21%


n=190
Base = those who attempt to recover online research costs

Which of the following cost recovery tools or software are currently used at your firm for online legal         13
research?
   COST RECOVERY PRACTICED


   COST RECOVERY TREND OVER PAST 2 YEARS

                                                                                                 About 1/4
                                        Don't                             Increased,            indicate an
                                      know, 12%                              23%                increase in
                                                                                                   costs
      Most firm’s                                                                               recovered.
  recovery rate has
     remained the
                                                                                Decreased,
    same over the
                                                                                   11%
    last two years.

                                      Remained
                                      the same,
                                         54%


n=189
Base = those who attempt to recover online research costs

Compared to two years ago, would you say the percentage of online research costs recovered by             14
your firm has increased, decreased or remained the same?
    COST RECOVERY PRACTICED


    REQUESTED COST RECOVERY TOOLS

       Firms that do practice cost recovery would find ABA guiding principles,
      articles or white papers, and market research beneficial tools to help with
                      their cost recovery strategy and processes.

arket research on SLF best practices                                                                          69%

                 ABA guiding principles                                                                     63%

                Articles or white papers                                                      48%

               Online Training/Webinars                                                    45%

                                            CLE                                    36%

                                          Other              9%
                                         -10%      0%     10%      20%     30%      40%     50%       60%    70%        80%

  Base = 200
  Which of the following would help you with your cost recovery strategy and processes? (Firms that                15
  practice cost recovery n=171)
Cost Recovery – NOT Practiced
    COST RECOVERY NOT PRACTICED


    REASONS FOR NOT PRACTICING

    More than 1/2 respondents cite their firms do not recover online legal costs because it
    is tradition not to charge, or to maintain relationships with clients, or the time and
    cost for billing and tracking is not worth it.

            Firm traditionally does not charge for
                                                                                                                    76%
                      OLR costs (n=197)



              Maintain client relationships (n=197)                                                         62%



         Not worth administrative time and cost
                                                                                                    52%
                  for tracking (n=198)


      Competitive Advantage to not bill clients
                                                                                                  47%
                     (n=196)

                                                                     0%   10%   20%   30%   40%   50%   60%   70%   80%
  n=197
  Base = those who do not attempt to recover online research costs

Thinking about the reasons your firm does not recover online legal research costs; indicate your level of
agreement with the following statements.
                                                                                                                          17
1 – 5 scale where “1” means strongly disagree and “5” means strongly agree.
  COST RECOVERY NOT PRACTICED


  REASONS FOR NOT PRACTICING

   Adjust hourly billing rates to include OLR
                                                                                                              45%
                     (n=196)


                          Client refusal to pay (n=199)                                         33%


       OLR chrgs not assembled, prepared or
                                                                                    21%
       approved when client invoiced (n=194)

       Failure to obtain client approval before
                                                                                   19%
              expense incurred (n=195)

     OLR chgs not assigned to right client ID
                                                                           9%
                    (n=195)

                                                                   0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
n=197
Base = those who do not attempt to recover online research costs

Thinking about the reasons your firm does not recover online legal research costs; indicate your level of
agreement with the following statements. Please use a 1 – 5 scale where “1” means strongly disagree and “5”     18
means strongly agree.
  COST RECOVERY NOT PRACTICED


  LIKELIHOOD TO START COST RECOVERY

                                                                                         15% are likely to
                                                       Don't        Very Likely,         start recovering
                                                     Know, 3%           2%                     costs.
       Most                                                                        Likely, 13%
     Overhead                       Very
                                  Unlikely,
   SLF firms are                    32%
                                                                                          Neither
                                                                                         Likely nor
    not likely to                                                                         Unlikely,
      shift to                                                                              15%
     Recovery
   Model in next
      2 years
                                                                            Unlikely,
                                                                              36%

 n=199
 Base = those who do not attempt to recover online research costs

                                                                                                             19
How likely is your firm to start recovering online legal research costs in the next two years?
  COST RECOVERY NOT PRACTICED


  HELPFUL COST RECOVERY TOOLS
  Firms that do not practice cost recovery would find ABA guiding principles,
   articles or white papers, and market research beneficial tools to help with
                   their cost recovery strategy and processes.

             Market research on
                                                                                         55%
             SLF best practices

                   ABA guiding
                                                                                                    66%
                    principles

               Articles or white
                                                                                         55%
                    papers

                   Online
                                                                            41%
             Training/Webinars


                               CLE                                       38%



                             Other              10%


                                     0%      10%      20%      30%      40%       50%     60%       70%   80%
Base = 200

Which of the following would help you with your cost recovery strategy and processes? (Firms that               20
do not practice cost recovery n=29)
  SUMMARY OF KEY FINDINGS

– Two-thirds subscribe to legal research services through Westlaw/Lexis
– Half of respondents attempt to recover all or part of their online research costs.
– About half review costs on a client by client basis
– Majority of clients include out of plan charges and document retrieval as part of
  their recovery efforts
– Two-thirds of online subscription charges or out of plan charges are recovered
– Typically partners are involved in setting / managing policies around cost recovery
– One-fourth indicate an increase in costs recovered over the last two years
– One-half said their costs recovered have remained the same over last two years




                                                                                       21
  SUMMARY OF KEY FINDINGS (cont.)

For those who do not recover, common reasons include:
  • Have never charged for research costs
  • Maintain relationships with their clients
  • Administrative time and costs involved


Noteworthy:
Firms that practice cost recovery and firms who currently don’t practice both
state they would benefit most from:
     – ABA guiding principles
     – Market research
     – Articles or white papers about cost recovery




                                                                            22

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:7
posted:7/22/2010
language:English
pages:22
Description: Law Firm Legal Information Service Research document sample