Competitive Advantage

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Milbank
library director
Alirio Gomez
Competitive
Advantage
Steven Spiess,
E
executive director
L
A
D
S
of Cravath, Swaine
Business intelligence—finding, analyzing,
E
E
N
& Moore. He’s the
R
and leveraging it—reshapes the role of law librarians.
leader of the pack
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G
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July/August 2008 Law Firm Inc. 00

From the forty-eighth-floor library at library staff—isn’t the death knell for the law firm
Milbank, Tweed, Hadley & McCloy’s library, but the start of its next, better, technologi-
New York headquarters, the view is cally advanced phase. Through online hubs like
revealing. But it’s not just the outside the Milbank Research Portal, lawyers will have fast,
world—the bridges and buildings of fine-tuned access to the resources they need. Li-
Manhattan—that catches the eye. Within, there brarians will have more control over what sources
is a world that’s changing, too. On first glance, it are used—and what expenses are incurred. Pub-
wouldn’t seem for the better. As part of a renova-
lishers will no longer have all the leverage when
tion last year, Milbank’s library space was cut from negotiating contracts for licensed materials; and, in
10,000 square feet to 3,200. Many, many books are the end, clients will get better service that’s more
gone—enough, perhaps, to start a small law school. cost-efficient, too.
Even now, on what is otherwise a bustling summer
Over the past few years, change has become
morning, the silence seems a bit eerie. There is no more than a buzzword among law librarians. It’s
one looking at the books that remain; just a few become, perhaps, the defining characteristic of the
people standing around computer terminals.
profession. Librarians have seen the nature of their
But Alirio Gomez, the librarian-technologist-
work evolve; many now spend as much time as-
MBA who oversees research at Milbank, couldn’t sisting with business development tasks as with
be happier. “I could get rid of all the books, but traditional legal research. They’ve had to become
a couple of attorneys here still like them,” says experts on technology—particularly Web-based
Gomez, his shrug an unspoken go figure. “Clients delivery methods—and aggressive in negotiating
are looking for more efficiencies and more value-
content licensing agreements. And they’ve had to
added service, and this,” he says, pointing to the make their case—and often their plea, for resourc-
giant flat-panel display that has essentially become es—to a growing number of nonlawyer adminis-
the new “walking tour” of the library, “is how we trators who don’t always understand the library’s
provide it.”
role, or why it needs to spend so much money.
In fact, says Gomez, the shrinking space—and at
Each year, The American Lawyer’s annual survey of
some large firms, including Milbank, the shrinking law librarians has highlighted both the new and the
THE LIBRARIAN’S EXPANDING ROLE
Is the library an independent department within the firm?
Do you manage your firm’s intranet?
Yes
83%
Yes
18%
No, it’s part of another departmentent 17%
No
82%
Who does the library director report to?
Competitive Intelligence

2007
2006
Is the library the main resource for developing
COO, director of administration,
competitive intelligence?
or executive director
62%
63%

2007
2006
CIO or IT director
18%
18%
Yes
50%
63%
Managing partner
4%
3%
No
50%
37%
CFO or finance director
1%
-
Other
14%
16%
To whom does the competitive intelligence
division report?
What other departments within your firm are

Percentage
you responsible for?
Marketing

38%

Percentage
None

22%
Conflicts

34%
Library

21%
Records

29%
Library and marketing

5%
Continuing legal education

17%
Other

14%
Knowledge management

17%
Court services

11%
Is the library the main
None

11%
resource for marketing
No
Docket research

9%
research?
38%
Information systems

3%
Yes
Other

37%
63%
Multiple responses were al owed.
6 Law Firm Inc. July/August 2008

expanding challenges that law librarians face. But cates, savvier negotiators, and vital contributors to
this year’s survey shows something else: Librarians the fi rm’s business—and growth.
are getting a handle on many of these issues. They
“Everyone is saying the biggest challenge we
are leveraging technology and developing strategies face is cost reduction and cost containment, but
to prevail over vendors, budget constraints, and I think what’s really different now is our opportu-
that never-ending pressure to watch costs.
nity to be part of the revenue stream, rather than
All told, the survey reveals a generally happy lot. a back-offi ce cost,” says Linda Will, director of in-
An overwhelming 85 percent of library directors formation resources at Dorsey & Whitney. “We’re
are satisfi ed with their job; 78 percent approve of taking an active role, for example, in competitive
recent decisions fi rm management has made re-
intelligence, and can now calculate our [return on
garding the library; 77 percent are okay with the investment], putting dollar amounts not only on
new roles played by the library. True, their pay-
what we do, but what we bring in.”
checks may have something to do with the good-
Indeed, competitive intelligence continues to
will: 32 percent earn $150,000 or more (and 3 grow as a key focus of the libraries. Fully half of
percent earn $300,000 and up). But in the course survey respondents said that the library was now
of more than a dozen interviews, another factor their fi rm’s main resource for developing the infor-
emerged: satisfaction in becoming tougher advo-
mation. The nature of this work is changing, too.
FINANCES
What is the total 2008 budget for the library’s
How much did the firm spend in 2007 on print materials?
firmwide operation?

2007
2006

2008
2007
Average
$1,723,278
$1,513,001
Average
$5,899,610
$4,251,627
Median
$1,300,000
$1,134,134
Median
$3,804,055
$3,500,000
What was the change in total spending on print
products from 2006 to 2007?
How does the 2008 budget compare to what was spent


Percentage
in 2007?
More than a 10% increase

23%
5–10% increase

41%
The 2008
Less than a 5% increase

12%
budget is
No change

4%
The 2008
smal er.
Less than a 5% decrease

8%
budget is
5–10% decrease

5%
larger.
They are about
More than a 10% decrease

7%
the same.
Compensation
How much did the firm spend in 2007 on library staff
in all offices?
How much did the firm spend on electronic resources

2007
2006
in 2007 (excluding LexisNexis and Westlaw)?
Average
$1,311,570
$1,074,550

2007
2006
Median
$700,000
$720,000
Average
$929,308
$970,782
Median
$592,375
$406,659
Compensation by library position:

Average
Median
Chief librarian
$137,388
$125,000
How much did you spend on LexisNexis research in
Deputy librarian
$92,460
$83,450
2007?
Branch office librarian
$75,479
$75,000

2007
2006
Special librarian
$72,043
$70,700
Average
$1,154,860
$1,234,631
Median
$779,001
$805,469
How much, including bonus, did the top librarian at
your firm earn last year?
$300,000 or more
How much did the firm spend on Westlaw research in
2007?
$200,000 to
$100,000 to

2007
2006
$299,999
$149,999
Average
$1,998,674
$1,681,399
$150,000 to
Less than
Median
$1,500,000
$1,150,000
$199,999
$100,000
8 Law Firm Inc. July/August 2008

While much competitive intelligence still consists don’t get done. “Competitive intelligence is a lot of
of research and analysis of clients, potential clients, work, requiring us even to go off-site to academic
industries, events, and litigation that might be ripe and other libraries, and the staff will neglect their
for pitches—“partners don’t want 1,000 pages of other stuff,” says a library chief who declined to be
printouts, they want us to read it and synthesize it identified.
ourselves,” says one library director who declined
Yet many librarians contend that it’s not the drain
to be identified—the rise of Web 2.0 technologies on resources that’s the real problem—but the dif-
has forced librarians to shift gears a bit.
ficulty in getting more resources. “Your reward for
But today’s online world is a two-way street. Law-
being good is more work, but at the same time, it’s
yers and library staff can, as always, search for and hard to get an increase in staff,” says Kate Martin,
retrieve (or “pull”) the information they need. How-
director of library services at McKenna Long &
ever, an increasing number of content providers—
Aldridge. Some firms have recognized—either on
from fee-based publishers to free blogs—are taking their own or, occasionally, after a telenovela’s worth
a more proactive approach. Instead of waiting for of drama—the role of the library in developing
users to call on them, they’re sending (“pushing”) competitive intelligence. They’ve hired, if not more
information directly
research librarians,
to the desktop. The
then at least a librar-
delivery methods are
I know better than ian or two special-
numerous, including
izing in competitive
daily newsletters on
to ask for more staff,
intelligence.
a specific topic and
Meanwhile, many
confides one librarian.
e-mail alerts. There’s
library directors have
often a lot of great
gotten good at creat-
data—and potential leads—but busy lawyers have ing metrics, showing just how much time they’re
little time to shift through it. So, increasingly, law spending on business development tasks. That can
libraries are taking the initiative, becoming, in ef-
help when making the pitch for more staff. But
fect, information gatekeepers, determining what not always. “I know better than to ask,” says one
content gets passed along, and how.
library director who requested anonymity. Adds
Some firms are taking a high-tech approach, de-
another: “Whenever IT staff needs new staff, they
veloping innovative ways to manage, and leverage, get it. But there’s always a reluctance to hire more
all the content that’s being pushed and pulled. At in the library.” According to our survey, 56 percent
Sheppard, Mullin, Richter & Hampton’s library, for of the libraries are operating with the same size, or
example, a librarian versed in Web programming smaller, staff than they did a year ago.
is building an application that, when completed,
On the surface, that doesn’t seem to make a lot
will be able to collect information on a specific of sense: Libraries are, arguably, doing more im-
topic, such as climate change, and post it to a page portant work than ever—work that can result in
on the firm’s intranet. The idea, says Martin Korn, new business. Yet they often can’t get the staff they
Sheppard, Mullin’s head librarian, is to take the in-
need to do this very same work. The reason, per-
formation that’s being delivered in all those differ-
haps, lies in the org chart. While it may be the li-
ent ways from all those different sources and bring brary gathering competitive intelligence, it’s often
it together in a manner that is easily accessible to the marketing department handing off the report.
lawyers. “People can open a link,” says Korn, “and In just 21 percent of firms responding to our sur-
retrieve content on a topic, industry, or company, vey does the competitive intelligence department
and then filter it to suit their needs.”
report to the library. In 38 percent, it reports to
Yet while technology can efficiently sort and de-
the marketing department (in 5 percent, it reports
liver content, it’s still a human being that’s in the to both, but that’s a whole other set of issues). “It’s
best position to make sense of it, deciding what’s hard to make the argument that we need more staff
important enough for a time-challenged attorney if they see the work coming from marketing and
to see and what can be discarded. So at many firms, not from us,” says one library director.
the process of “massaging” data, as the librarians
Budgets are another touchy subject for the li-
tend to call it, is still very much a manual—and brary chiefs. In absolute terms, they’re increasing:
time-consuming—process.
73 percent of respondents said their 2008 budgets
But sometimes there’s a price to pay for the focus were up from 2007. Indeed, average spending in-
on business intelligence: traditional reference tasks creased from $4,251,627 to $5,899,610 (though
10 Law Firm Inc. July/August 2008

median spending barely budged, coming in at But others, he adds, particularly those that have
$3,804,055 in 2008, compared to $3,500,000 in been around a while, make use diffi cult and expen-
2007). But much of the added spending is simply sive.
to keep up with price increases for content. While
Print, it turns out, isn’t easy on the budget, ei-
LexisNexis costs were down slightly last year—av-
ther. Even as libraries shelve fewer books, they’re
eraging $1,154,860, compared to $1,234,631 in spending more for them: 76 percent of fi rms re-
2006—Westlaw fees were up markedly, averaging ported spending more on print materials in 2007
$1,998,674, compared to $1,681,399. And that’s then they did in 2006. That’s forced fi rms to ag-
not simply because lawyers spent more time on the gressively weed out even more of their paper-
service; 85 percent of fi rms have a fl at-rate contract bound resources.
with Westlaw (81 percent have one with LexisNex-
One way librarians are leveling the playing fi eld
is). [The American Lawyer’s parent company has a is by leveraging technology to control costs. The
licensing deal with Westlaw.]
thinking: It’s worked for internal costs—Latham
Further straining budgets—as well as patience—
& Watkins, for example, directs all requests for
are what librarians contend are draconian licens-
research assistance to a single e-mail address, so
ing terms forced on them by some of the smaller, when it’s the middle of the night in Los Angeles, a
specialized electronic research vendors. Among librarian in Germany can answer the request, pro-
the less popular policies: licensing a database to viding, in effect, 24/7 service without paying for
ten specifi c users, instead of any ten users, so if a 24/7 staff. So why not for external costs?
named attorney is out for the day, no one else can
The research portals that more and more fi rms
use the service in his place; prohibiting use by li-
are developing can control costs simply by steering
brarians; and forcing the entire fi rm to subscribe preferred vendors to lawyers. Lawyers who see a
to—and pay for—a service that just ten lawyers in practice group page listing resources are more apt
one practice group need. To be sure, there are signs to use one of those than go hunting for another,
of improvement. “The publishers that are new to possibly more costly one. But a lot of fi rms are go-
the industry tend to be better, offering simple li-
ing a step—or more—further. Some strategies are
censing terms and reasonable pricing,” says Korn. relatively simple. “We’ve considered putting dol-
ELECTRONIC RESOURCES
Do you have a flat-rate contract with LexisNexis?
The Future
Do librarians play an active role in the firm’s
Yes
81%
knowledge management efforts?

2007
2006
No
19%
Yes
75%
84%
No
25%
16%
Do you have a flat-rate contract with Westlaw?
Do you have any Bloomberg terminals?
Yes
85%
No
15%
Yes
40%
No
60%
What percentage of online charges paid to LexisNexis
and Westlaw does the firm recover from clients?
Do you anticipate moving toward a single-vendor

2007
2006
approach for electronic research within the next five
40% or less
9%
14%
years?
41–60%
18%
10%

2007
2006
61–80%
39%
38%
Yes
12%
18%
81–100%
31%
30%
No
88%
82%
Not applicable
3%
9%
If yes, which vendor are you leaning toward?
How does online cost recovery compare for LexisNexis
and Westlaw usage at your firm?
LexisNexis

2007
2006
LexisNexis recovery is better.
10%
11%
Westlaw
Westlaw recovery is better.
45%
35%
They are about the same.
42%
48%
We don’t recover online charges.
3%
7%
Out of 12 responses
12 Law Firm Inc. July/August 2008

lar signs next to each source, like in a restaurant
review,” says Marcia Burris, library manager at STAFFING
Ogletree, Deakins, Nash, Smoak & Stewart. “The
I am satisfied with management’s recent decisions
more dollar signs, the higher the cost. So users can
regarding the library.

2007
2006
decide if it’s worth it.”
Agree
33%
35%
Other strategies are more sophisticated. Analyt-
Mostly agree
45%
45%
ics—an area more and more librarians are looking
Ambivalent
16%
12%
into, with new and more capable software tools
Mostly disagree
6%
9%
Total y disagree
1%
-
entering the market—can reveal when resources
are used, by whom, and for how long. This kind
I am satisfied with my compensation.
of information can be a powerful bargaining chip

2007
2006
when negotiating new usage contracts. “We’ve used
Agree
32%
37%
analytics to figure out just how expensive a service
Mostly agree
38%
46%
Ambivalent
13%
11%
really is, and we’ll show that to the vendors,” says
Mostly disagree
17%
7%
Milbank’s Gomez. “Often, they’ll then come up
Total y disagree
-
-
with a solution, perhaps giving us a discount or
building a better interface to increase usage. Some-
In general I am satisfied with my job.

2007
2006
times we’ll just discontinue use.”
Agree
47%
43%
Technology also enables Milbank to eliminate
Mostly agree
38%
44%
duplicate searches—and the duplicate charges that
Ambivalent
12%
9%
result. The situation: Two lawyers in two offices,
Mostly disagree
3%
4%
Total y disagree
-
-
working on the same transaction, will each do the
same search—say, looking for current news about
How many of the firm’s offices have libraries and
a deal. The firm gets charged twice. The solution:
library staff?
developing profiles on specific clients and trans-

2007
2006
actions and proactively running the searches—
Al offices
9%
11%
More than half of the offices
44%
45%
once—with results then available on demand to
Less than half of the offices
30%
32%
any user who is logged into the portal. “You no
Only the main office
16%
12%
longer have each lawyer doing their own search,
duplicating efforts and fees,” says Gomez.
How many librarians does the firm employ firmwide?

2007
But the librarians’ newfound, tech-driven leverage
Average
9.29
isn’t the only thing that’s changed the face of con-
Median
7
tract negotiations. While our interviews turned up
the traditional anecdotes of vendor intractability—
How has the number of full-time employees changed
in the past two years?
requiring firms to take a product they don’t want, to

2007
2006
get one they do; take-it-or-leave-it prices—they also
We have more.
44%
45%
uncovered something else: These stories, in contrast
We have fewer.
18%
19%
to years past, now seem to be the exception. Librar-
We have the same number.
38%
36%
ians aren’t dreading contract negotiations like they
Is it harder to recruit law-trained librarians now than
used to, partially because they’re getting better at
it was five years ago?
it, and partly, as McKenna Long’s Kate Martin de-

2007
2006
scribes her own recent experience negotiating deals
Yes, it’s harder.
60%
62%
with West and Lexis: “They just seemed hungrier
No, it’s easier.
1%
8%
The market for recruiting law-trained librarians
this time, much more willing to negotiate.”
has remained the same.
39%
30%
But there’s another factor here, too. Increasingly,
library directors are seeking outside help to snag
What is the average number of hours a full-time
the best possible deal. They’re hiring consultants to
research staff member bills to clients each year?

2007
2006
do the bargaining. In particular, they’re seeing that
Average
378
406
take-it-or-leave-it pricing doesn’t always need to be
Median
300
325
taken or left. “One of the vendors said they simply
would not negotiate,” says Martin. (She declined to
What is the average billing rate of the library staff?
say which vendor.) “We called in an outside person.

2007
2006
Average
$145
$144
He analyzed the contract, got it down—even more
Median
$145
$148
than we had [pushed for].”
For more information about the librarian survey, visit lawfirminc.com.
14 Law Firm Inc. July/August 2008

The downside, say two librarians who declined to
Now that they’re seeing some success at the bar-
be identified, is that working with consultants—who gaining table, the buyer’s remorse librarians used to
typically are paid a percentage of the savings they experience has been replaced by a different kind of
obtain—can itself be an unsavory business. “Some regret, namely: What took so long? “I don’t know why
of these consultants are like junkyard dogs, very we cowered before—we’re the customer,” says Dorsey
difficult people,” says one library director. But that, & Whitney’s Will. “In the last year or two—and cer-
she adds, is what makes them good at what they do. tainly in 2008—we’ve become extremely aggressive.”
There’s something else that makes them effective: By
But getting tough with vendors is just the first
working on multiple deals, they know which firms step. In order to do their job well—and get the re-
are getting what—a handy piece of inside baseball, sources they need—library directors will need to be
given that these contracts are typically confidential. aggressive advocates within their firms, too. That’s
“They may know that another firm got a better deal, something that’s rarely come easy, but is essential to-
and they’ll give you a sense of what you can and day. “We’re not like marketing, where it’s just in their
can’t get,” says this librarian. In fact, sometimes just blood to toot their horn,” says one law firm librarian.
the threat of bringing in a consultant is enough to “But we can no longer just sit around and wait for
get some movement on price: “Some vendors will the rest of the world to recognize us. Like it or not,
offer you a better deal if you agree not to bring in a we’re in the business world now.”
third party,” she says. “And if [we] think we’re get-
ting a reasonable offer, we won’t bring them in.”
E-mail: [email protected]
Our seventh annual Law Librarian Survey was conducted this past spring. We surveyed head librar-
ians at Am Law 200 firms about the librarians’ responsibilities and the library’s budget, resources, and
staffing. Ninety-four librarians responded. Some percentages may not add up to 100 due to rounding.
Others may exceed 100 percent because respondents were allowed to select multiple responses. Not
all respondents answered all questions.
—Craig Savitzky