A new way of looking at the recovery of legal research costs? Why not.

Recently, I was a guest speaker at the annual Private Law Librarian Summit in Boston where the conference coordinator had requested I address the state of cost recovery in the legal market.  When I gave the presentation, it was the last session on Saturday afternoon right before the conference-ending cocktail hour.  I don’t know the reason, whether it was because the session was right before the cocktail hour or because of the topic itself– but the data was certainly met by a lively group of people and a lively response.

This data point was the trigger:  the results from the Mattern & Associates 2012 Cost Recovery Survey indicates that legal research continues to be the number one area that clients are pushing back on (80%) and refusing to pay (69%). No other area is even close.

I think the obvious question is why.  Why is this area so highly targeted by clients?  What made the discussion so lively was the interesting mix of law firm librarians and clients.  The clients sitting in the room during the presentation offered the following:

  1. Part of the reluctance is the fact that firms are billing for both the legal research and the hours incurred.
  2. The second reason was the lack of trust that the price was the actual cost the firm was paying.  (On a side note, 13% of firms responding to our 2012 Cost Recovery Survey still charge the list rate from the vendor.)

When I suggested that firms move to a hard cost model (Mattern Plan B™) for this area, that’s when things got lively. Many of the law firm attendees defended their current system of reconciling their costs against their discounts and passing that charge through to their clients.  Another group had a different way of allocating their costs – all were very interesting, but all were missing the point.  The problem wasn’t whether a firm was implementing one system or another, but the fact that the firm was producing the charge, not the vendor, and the lack of trust for internally generated costs.

I promised the group that I would research applying Mattern Plan B™ to the area of legal research and report back to them.  That project has begun, and I will keep you posted on the results.

In the meanwhile, non-participating firms are currently being invited to access our web-based Overview of the 2012 Cost Recovery Survey here:  www.matternassoc.com.  The aggregate legal research recovery data is included in the Overview as well as many other areas of traditional and modern cost recovery areas.

We look forward to keeping the discussion lively.