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Since this is the inaugural edition of Tragically Candid, let me put my bona fides out front in an effort to give you confidence in what you are about to read.  I’ve been a practicing attorney in New York, had a 20-year career at LexisNexis where I was Vice President of Sales and, for the last 5 years, been a private consultant to law firms negotiating research contracts on their behalf with Westlaw, Lexis, Bloomberg, etc. 

While you may not agree, or even like, what I say, I hope you’ll agree I have strong basis for my opinions.

So, with that in mind, I thought a helpful first blog would be a tragically candid description of 5 ways, sorry to say there are plenty more, I see law firms consistently hurt themselves in contract negotiations.

1 – You don’t know what a fair price is:

Maybe I should call this one “you don’t know what you don’t know.”  I can’t tell you the number of times I’ve had a Managing Partner, COO, CIO or Librarian tell me “they have a really good price” only to find out on closer inspection they are paying multiples over market rates.  I heard this when I worked at Lexis and competed against Westlaw and I hear it now as a consultant when I offer to benchmark a firm’s rates.

No one wants to feel like they paid too much for anything, let alone the person the firm has tasked with negotiating a fair contract with one of the legal vendors.  I get it, it’s easy to feel defensive or threatened when someone questions the numbers. 

There are, however, ways to get a handle on where your price is relative to today’s market.  One is to engage the competition.   They should have a good sense of the market in your area.   The other, and here comes the shameless plug, is to engage a cost consultant that can provide benchmarks given your firm size and content needs based on your practice.  

Whatever route you choose, it is vitally important that you put the ego aside and get some help finding out if your price is fair.

2 – You don’t perform full due diligence:

In fact, I’ve seen some firms perform no due diligence and simply accept the vendor’s renewal offer.  While that may save a lot of time, it comes with a price.  Not just in cost, but also by missing resources potentially helpful to your attorneys. 

At a minimum, firms need to engage the competing vendor in a meaningful way. 

Meaningful means understanding their product offering and whether it meets the firm’s needs, having that product demonstrated to stakeholders with a trial of the product to a targeted group and distributing a survey to trial participants designed to provide objective, fact-based feedback.  

This is a process I mandate, and manage, for all my clients.  BTW, if you don’t do this you are sending a clear signal to your current vendor that you have no intention of leaving.   Not the best way to control increases.

3 – You are unduly influenced by vendor scare tactics:

This drives me crazy! Vendors, some more than others, are going to use scare tactics to plant the seed of doubt about their competitors.  I see it in every negotiation and I’m consistently shocked by two things: one, the brazenness of some of the reps claims and two, the willingness of firms to accept these representations as true.

While scare tactics are an insulting way to treat a customer, simply using one obviously does not mean the rep is stretching the truth.  The next time you hear a rep say something like “If you use X vendor, you are using a second rate product.”, “The Supreme Court cites to us more than the competition.” or “The competition has far more errors than we do.” you need to ask them to show you proof of their claim

Facts matter; make them prove it!

If it’s a fact, the vendor’s marketing department most likely gave the sales force supporting materials to illustrate the point.   If there isn’t supporting data it’s, at best, sales-puffing; at worst, it’s a blatant attempt to mis-inform.  Either way, ignore it and keep it clear from your decision-making process. 

4 – You let the vendors drive the agenda, process and timing of negotiations:

This is a huge mistake! The firm must set a timetable for negotiations that allows you to not only assess vendor proposals, but also provide time for a structured transition if the firm chooses to change vendors.

Many times, the current vendor will delay providing their “best and final” proposal as long as possible.  The purpose behind this is to limit the amount of time you have to fully consider the competing offers and, more importantly, limit the time you have to train your users on the competitive product before the current contract ends.  When this happens, many firms simply renew and vow to do it better next time.

Don’t fall into this trap…you drive the ship.

5 – You don’t know how to analyze usage under your current contract:

You must understand what content is, and is not, being used in your current contract before you can negotiate a new one.  Usage analysis is becoming a lost art because it requires tedious, detailed work on the part of the firm and because vendors are not providing firms the level of usage detail they have in the past. (I wonder why…)

But, as they say, the devil is in the details and there are still mechanisms within the firm’s control to mine this information.  Skipping this step, or not knowing how to do it, means you likely have contracts that include costly content that is never used and not needed.  Firms are consistently shocked at the amount of unused content they pay for after I analyze their usage.

With all due respect to the vendors, don’t count on them to give you this information.  You must do it yourself.

These are just some of the ways firm’s hurt themselves in contract negotiations; unfortunately, there are more.  My hope with this blog is to provide firms information that helps you better control the process of negotiating legal research contracts.  Feel free to let me know if there are other topics you’d like discussed.  I look forward to sharing my experience with you.