For core legal search, consumers have two primary vendors to turn to, Lexis and Westlaw (WEXIS). “They have perpetuated a secret market of their own design, denying consumers the basic information needed to make informed purchasing decisions,” observed Feit Consulting in Optimizing Legal Information Pricing 2019 Update (“Feit”). We should emphasize “secret market” because Feit estimates that 15-25% of large law firms pay substantially more for core legal search than the rest of this market segment. Why? While consumers can compare the benefits and features of vendor products, comparison of available products based on pricing is not available because of WEXIS NDAs.
Not knowing the “going rate” – not knowing what similarly situated libraries are currently paying for Westlaw or Lexis, most negotiations start with one of two premises:
- that the renewal of vendor A is going to cost more than the last contract, but switching to vendor B will cost less than that, or
- kicking out vendor A temporarily without a replacement service will result in a lower price offer from vendor A in the not too distant future.
This is churning WEXIS. Churning WEXIS has become a necessity for many law libraries to control legal search costs since the Great Recession because leveraging WEXIS against each other for their core legal search product is the most effective way to obtain cost savings for enterprise search.
Feit Consulting advises “Evaluating and perhaps utilizing the sole provider option has become necessary for law firm administrators to effectively manage these costs. Because of the expense involved and the nature of the market, vendor choice should be re-evaluated in most contract cycles.” The same is true for many government law libraries. So once every three years or so, law firm and government libraries must not renew, or must threaten to not renew, their enterprise-wide search contract to achieve some savings while trying to achieve best in market pricing when market pricing is essentially unknowable. You make your deal and then live with it for a couple of years until it is time to churn again.
Is this the best way to conduct B2B commerce?