“This white paper is presented by LexisNexis on behalf of the author. The opinions may not represent the opinions of LexisNexis. This document is for educational purposes only.” But the name of the author was not disclosed, the paper is branded with the LexisNexis logo on every page, and the paper is hosted online by LexisNexis. The paper is about as “educational” as anything Trump opines about.

In the whitepaper, Are Free & Low-Cost Legal Resources Worth the Risk?, LexisNexis once again goes after low cost (but high tech) legal information vendors using the paper’s critique of Google Scholar to slip in false claims about Casetext (and Fastcase). This is another instance of the mantra “low cost can cost you” the folks in LN’s C suite like to chant on the deck of the Titanic of very expensive legal information vendors.

In LexisNexis, scared of competition, lies about Casetext (June 4, 2019) Casetext’s Tara McCarty corrects some of the whitepaper’s falsehoods in a footnote:

“A few examples: (1) They say Casetext’s citator, SmartCite (our alternative to Shepard’s), is “based on algorithms rather than human editors.” While we do use algorithms to make the process more efficient, a team of human editors reviews SmartCite results. By using both, we actually improve accuracy, allowing computers to catch human error and visa versa. (2) They say Casetext doesn’t have slip opinions. Slip opinions are available on Casetext within 24 hours of publication. (3) They say Casetext doesn’t have case summaries. Not only does Casetext have over four million case summaries — those summaries are penned by judges, rather than nameless editors.”

McCarty’s editorial is recommended. The whitepaper, not so much.  Enough said.

Trust is a state of readiness to take a risk in a relationship. Once upon a time most law librarians were predisposed to trust legal information vendors and their products and services. Think Shepard’s in print when Shepard’s was the only available citator with signals that were by default the industry standard. Think late 1970s-early 1980s for computer-assisted legal research where the degree of risk taken by a searcher was partially controlled by properly using Boolean operators when Lexis was the only full-text legal search vendor.

Today, output from legal information platforms does not always result in building confidence around the use of the information provided be it legal search or legal citator outputs as comparative studies of each by Mart and Hellyer have demonstrated. What about the output we are now being offered by way of the implementation of artificial intelligence for legal analytics and predictive technology? As legal information professionals are we willing to be vulnerable to the actions of our vendors based on some sort of expectation that vendors will provide actionable intelligence important to our user population, irrespective of our ability to monitor or control vendors’ use of artificial intelligence for legal analytics and predictive technology?

Hopefully we are not so naive as to trust our vendors applied AI output at face value. But we won’t be given the opportunity to shine a light into the “black box” because of understandable proprietary concerns. What’s needed is a way to identify the impact of model error and bias. One way is to compare similar legal analytic outputs that identify trends and patterns using data points from past case law, win/loss rates and even a judge’s history or similar predictive technology outputs that forecast litigation outcome like Mart did for legal search and Hellyer did for citators. At the present time, however, our legal information providers do not offer similar enough AI tools for comparative studies and who knows if they will.  Early days… .

Until such time as there is a legitimate certification process to validate each individual AI product to the end user when the end user calls up specific applied AI output for legal analytics and predictive technology, is there any reason to assume the risk of using them? No, not really, but use them our end users will. Trust but (try to) validate otherwise the output remains opaque to the end user and that can lead to illusions of understanding.

H/T to Bob Ambrogi for reporting that Dean E. Sonderegger has been appointed senior vice president and general manager of Wolters Kluwer Legal & Regulatory U.S. (LRUS). He has been vice president in charge of legal markets and innovation since joining LRUS in 2015. Before that, he was with Bloomberg BNA for 13 years, where he oversaw strategy and marketing for software products. Here’s the press release.

With continued advances in AI, machine learning and legal analytics anticipated, we can expect that legal information platforms will be supplanted by legal intelligence platforms in the not too distant future.  But what would a legal intelligence (or “smart law”) platform look like? Well, I can’t describe a prototypical legal intelligence platform in any technical detail. But it will exist at the point of the agile convergence of expert analysis, text and data-driven features for core legal search for all market segments.  I do, however, see what some “smart law” platform elements would be when looking at what Fastcase and Casetext are offering right now.

In my opinion, the best contemporary perspective on what a legal intelligence platform would be is to imagine that Fastcase and Casetext were one company.  The imagined vendor would offer in integrated fashion Fastcase and Casetext’s extensive collection of primary and secondary resources including legal news and contemporary analysis from the law blogosphere, Fastcase’s search engine algorithms for keyword searching, Casetext’s CLARA for contextual searching, Casetext’s SmartCite, Fastcase’s Docket Alarm, Fastcase BK, and Fastcase’s install base of some 70-75% of US attorneys, all in the context of the industry’s most transparent pricing model which both Fastcase and Casetext have already adopted.

Obviously, pricing models are not an essential element of a legal intelligence platform. But wouldn’t most potential “smart law” customers prefer transparent pricing? That won’t happen if WEXIS deploys the first legal intelligence platforms.  Neither Fastcase nor Casetext (nor Thomson Reuters, LexisNexis, BBNA, or WK) has a ‘smart law” platform right now. Who will be the first? Perhaps one possibility is hiding in plain sight.

A snip from Casetext’s blog post, Cite-checking the Smart Way: An Interview about SmartCite with Casetext Co-Founder and Chief Product Officer, Pablo Arredondo (May 15, 2019):

“SmartCite was developed through a combination of cutting-edge machine learning, natural language processing, and experienced editorial review. Let’s start with the technology.

“SmartCite looks for patterns in millions of cases and uses judges’ own words to determine whether a case is good law and how a case has been cited by other cases. There are three key data sources analyzed by SmartCite. First, SmartCite looks at “explanatory parentheticals.” You know how judges will summarize other cases using parentheses? By looking for these phrases in opinions, we were able to extract 4.3 million case summaries and explanations written by judges! These explanatory parentheticals provide what I call “artisanal citator entries”: they are insightful, reliable, judge-written summaries of cases.

“The second key data source leveraged by SmartCite are phrases in judicial opinions that indicate that a case has been negatively treated. For example, when a judicial decision cites to a case that is bad law, the judge will often explain why that case is bad law by saying “overruled by” or “reversed by” or “superseded by statute, as stated in…” The same is true with good law. Judicial opinions will often indicate that a case is “affirmed by” another case.

“The third data source we use are Bluebook signals that judges use to characterize and distinguish cases. Bluebook signals can actually tell us a lot about a case. For example, when a judge introduces a case using “but see” or “cf.” or “contra,” the judge is indicating that this case is contrary authority, or that it has treated a legal issue differently from other cases. These contrary signals are powerful indicators of tension in the case law.

“However, using machine learning to look for judicial phrases and Bluebook signals is only the starting point of SmartCite’s analysis. We also rely on experienced editors to manage that process, review the case law, and make decisions on the ‘edge cases.'”

See also this page for SmartCite product information.

For LexisNexis, the pressure in on to recapture solo and two-attorney firms. Competition is getting stiff. For example, over the last 9 months alone, Casetext reports that over 3,000 law firms have switched from LexisNexis and Westlaw to Casetext. LN’s response to the competition is to lower its pricing and make pricing more transparent in the small law market defined as solo and two attorney firms.

Go here to view LN’s offer of three plans: (1) a $55/month “state primary” plan; (2) a $115/month “state enhanced with full federal” plan and (3) a $138/month “national primary enhanced”. Due note all three plans require a three-year contract. In additions to the pricing quoted above, there appears to be a $25/month “administrative fee.”

This in not LN’s only campaign targeting “low cost” providers like Fastcase and Casemaker. Remember the 2017 “Low cost can cost you” marketing campaign? So far, I haven’t seen an LN press release about this latest attempt.

H/T Casetext’s post, LexisNexis’ New Pricing for Small Law Firms: How to Save Thousands Apr. 25, 2019.

In CRIV’s semiannual call with BBNA on December 21,2019, the Company reiterated its corporate objective of becoming a digital-only platform stating “Bloomberg Law is unequivocally committed to becoming a digital-only platform, in the near future. There is not a concrete date set for the complete move to digital-only, but it is not remote and the complete move should be expected within the next few years.” Towards this end, Tax Management Portfolios are still being made available in print but only as a short-term accommodation:

“Bloomberg Law’s production and selling of Tax Management Portfolios (TMP) in print TMP is an accommodation exception for Bloomberg Law or Bloomberg Tax online subscribers who also want to continue getting print TMPs. Access to print TMPs were offered as a convenience. Bloomberg Law is committed to continual updates to the TMPs, something only possible in the digital format but understands many subscribers need time migrating users to the digital platform.”

From the FTC’s tying page:

Offering products together as part of a package can benefit consumers who like the convenience of buying several items at the same time. Offering products together can also reduce the manufacturer’s costs for packaging, shipping, and promoting the products. Of course, some consumers might prefer to buy products separately, and when they are offered only as part of a package, it can be more difficult for consumers to buy only what they want.

For competitive purposes, a monopolist may use forced buying, or “tie-in” sales, to gain sales in other markets where it is not dominant and to make it more difficult for rivals in those markets to obtain sales. This may limit consumer choice for buyers wanting to purchase one (“tying”) product by forcing them to also buy a second (“tied”) product as well. Typically, the “tied” product may be a less desirable one that the buyer might not purchase unless required to do so, or may prefer to get from a different seller. If the seller offering the tied products has sufficient market power in the “tying” product, these arrangements can violate the antitrust laws.

Example: The FTC challenged a drug maker that required patients to purchase its blood-monitoring services along with its medicine to treat schizophrenia. The drug maker was the only producer of the medicine, but there were many companies capable of providing blood-monitoring services to patients using the drug. The FTC claimed that tying the drug and the monitoring services together raised the price of that medical treatment and prevented independent providers from monitoring patients taking the drug. The drug maker settled the charges by agreeing not to prevent other companies from providing blood-monitoring services.

Can you see the similarity of the FTC’s example and LexisNexis tying?

 

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:

  1. 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
  2. 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?

The LexisNexis tying controversy was on the agenda for our association’s Spring executive board meeting. It appears on the April 5 agenda as one of six items listed under the heading “informal considerations.” See the Spring 2019 Meeting Board Book. The agenda indicates that AALL President Femi Cadmus gave an “update on current LexisNexis Practices.” There was no action item associated with the tying controversy agenda item. Hopefully AALL will communicate the substance of this update to the rank-and-file membership in the near future.

H/T to Bob Ambrogi for reporting that Fastcase will be adding ABA publications:

Steve Errick, chief operating officer at Fastcase, told me that he is working with the ABA to add publications from different sections one at a time, with family law, health, trial, IP, and criminal law among the first sections in the pipeline. He did not specify the titles to be added but said the arrangement would average 30-60 titles per section.

Subscribers will have access to these titles from directly within the Fastcase 7 platform, but they will be required to purchase the titles to which they want access. Individual titles will be sold at the ABA’s retail price, while firms that purchase multiple or enterprise subscriptions will be eligible for discounts based on number of titles purchased and number of firm users.

Even though individual titles will be priced the same as purchasing them from the ABA, subscribers get two benefits by purchasing them through Fastcase, Errick said. One is ease of access to the titles directly from the platform and the other is the addition within the books of links to cases and regulations.

From the press release:

“The vision for Fastcase is to make it easy for users to connect the legal research workflow dots, from primary law and public records, dockets, expert witness, legal analytics, and legal news,” Errick said. “The collection includes law review articles from HeinOnline, alerts, digests and blogs from LexBlog, and now our fast-growing collection of more than 1,000 market-leading expert treatises. To see it all come together and be able to showcase these fantastic books represents the culmination of 20 years of effort, and we feel like we’re really just getting started,” he added.

State and local bar partners, consumer bankruptcy customers, and AmLaw 250 subscribers have been asking Fastcase for risk solutions that include public records data according to Fastcase President Phil Rosenthal and Fastcase COO Steve Errick. To satisfy the request, Fastcase has partnered with TransUnion. In a nutshell, Fastcase users who sign up with TransUnion to access its TLOxp platform can use TransUnion information to perform due diligence, conduct litigation support, locate witnesses, track ownership of assets, verify identities, and conduct other investigations.

The integration will be available in Fastcase 7 when it comes out of beta sometime later this month or early in April. Both Bob Ambrogi and Jean O’Grady have the details. Recommended.

LexisNexis Legal revenues for the year ended December 31 2018 were £1,618m, compared with £1,686m in 2017. Underlying adjusted operating profit growth for LexisNexis Legal was +10% which produced a profit margin of approximately 19.8%. In 2018, 67% of revenue came from North America, 21% from Europe and the remaining 12% from the rest of the world. Subscription sales generated 77% of revenue and transactional sales 23%. Read the report here.

Bridget J. Crawford’s Information for Submitting to Online Law Review Companions (Feb. 2019) “contains information about submitting essays, commentaries, reviews, responses, and other writings to online companions to the main law reviews and journals at selected law schools. The document includes word-count limitations, subject matter specifications, preferred submission methods and other information of possible interest to authors. It covers 20 online companions to main law reviews.”