2. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Today’s Speaker
Nina Platt
Principal Consultant
Nina Platt Consulting, Inc.
3. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Agenda
• Trends in Cost Recovery
• Budget
• Electronic Resource Management (ERM) Tools
• Disbursement Management
• Tracking Progress
• Communicating to Firm Leaders
4. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery
Movement towards not charging clients
vs.
Firm decision to continue charging
5. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Current Trends in Cost Recovery
AmLaw 2008 Survey
Recovery of online research costs increasing
6. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Current Trends in Cost Recovery
AmLaw 2008 Survey
3% of firms do not recover online costs
7. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
ABA Survey
% of Lawyers Who Don't Know How Their Firm Recovers Online Research Expenses
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
Solo 2-9 lawyers 10-49 lawyers 50-99 lawyers 100+ lawyers
Size of firm
39.7%
35%
21.4%
5.2%
2.1%
8. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
Expert Interviews
• No significant change in the near term
• Movement to not charge for online
services over time (10-20 years)
9. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research
• What contributes to the devaluing of
information?
– Lawyers aren’t taught to value research in law
school
– Lawyers want to be seen as experts who
have the answer
– A whole lot of waffling on the decision to
charge clients
10. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research
• What contributes to the devaluing of
information?
– Law firms don’t communicate openly with
clients about the value
– Clients have no trust in how the research is
being invoiced
– Clients won’t pay for services they don’t value
and invoices they don’t trust
11. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research• How can lawyer behavior be changed?
– Discussions with leadership – team with
group leaders
– Creation of transparent pricing policies
– Individual discussions with lawyers
– Presentations at practice group and team
meetings
– Lawyers providing message to clients
12. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Trends in Cost Recovery –
The Value of Online
Research• How can client behavior be changed?
– Partners having the value discussions with
their clients
– Engagement letters that include transparent
research pricing policies
13. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Face the responsibility w/o authority dilemma
• Budget your projected recovery against expense
to create the % of costs you hope to recover
• Depending on individual firm needs and vendor
bill groups, this budget may be split out by office,
practice group, etc.
• Set up accounts for each service where you plan
to recover costs
14. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget Example
GL for use in paying expense and another for
dispersing costs
15. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget Example
Percentage expected to recover
16. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Set up two accounts
• The two accounts should be related to be able to
report on the recovery against cost
• Work with your accounting department may
have alternative ways of setting this up
depending on software and firm processes,
policies, and procedures
17. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Budget
• Work with Pro Bono to budget use of
research services
– Handled differently at each firm
– ProBono team may have their own budget
– Lexis vs. Westlaw
18. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – The Players
• Lookup Precision (Advanced Productivity
Software - US) This is not a West product.
• OneLog (Info Technology Supply, LTD – UK)
• Research Monitor (Priory Solutions – UK)
• Cost Recovery Manager (LexisNexis – US)
• Research Agent (sold to nQueue and taken off
the market)
19. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Market
Penetration
• Survey of NLJ 250 with 100 firms responding
regarding the use of cost recovery tools
– 37 out of 100 firms have purchased the software
– 51 out of 100 firms plan to purchase in the near future
– If other NLJ 250 firms follow suit, 88% of that
population of law firms will be using this type of
software.
20. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools - Market
Distribution
21. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – The
Features and Functionality
• Site tracking
• Client/matter validation
• User id and password management
• Auto-population of user ids and passwords
• License management
• Reports
– Usage reports
– Cost recovery reports
22. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Past Issues
• Difficult to set up
• Limited reporting
• Desktop plugins
23. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
ERM Tools – Use in Practice
Functionality Implemented
0
5
10
15
20
25
30
35
40
Cost Recovery Site Tracking Password
management
License
management
Access Control Other
NumberofFirms
24. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Disbursement Management –
Vendor Tools
• West Quickview +
• Lexis Power Invoice
• PACER
• Dialog
• Others?
25. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Resources
• Westlaw Cost Recovery Solutions
• Lexis
– Lexis Power Invoice
– Library Relations Article
– LexisNexis Cost Recovery Manager
26. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Disbursement Management -
Vendor Tools
• Use of macros
• Uploading files to Accounting
• Cost recovery vendor solutions – e.g.,
Equitrac Online Services Module
• Providing backup
– Power Invoice – Enhanced report
– Quickview + - Target options
27. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress – Reports,
Reports and more Reports
• Internal library reports
– Maintain payment history in library system or
spreadsheets
– Report on how payments were broken out
from month to month (e.g., out of contract vs.
in contract)
– Report predicted recovery based on billable
vs. non-billable in usage reports
28. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress – Reports,
Reports and more Reports
• Internal accounting reports
– Reports for each unit (office, group, etc) and resource
being tracked - monthly
– Clients who are not charged or where research has
been discounted - quarterly
– Write-offs and non-billable charges in spreadsheet
format with clients, lawyers and practice groups
included in report – quarterly
– Exceptions report - monthly
29. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Tracking Progress –
Reports,
Reports and more Reports
• Vendor reports
– Quickview + and PowerInvoice reports
– Outside of contract details – monthly,
quarterly and annually – insist on spreadsheet
format
• Use to determine what resources to add to
contract
• Do not add outside contract content that can be
passed on to client (e.g., briefs)
30. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Communicating Recovery to
Firm Leaders
• Don’t be surprised
• Call leaders or accounting to discuss issues the
reports unearth
• Call group heads to discuss non-billables or
exceptions
• Treat write-offs with care
31. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Conclusion
• Cost recovery is here to stay for now
• If beliefs don’t change, we will continue to
struggle in recovering costs
• If we do change beliefs, we will be
contributing to the firm’s bottom line
32. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Questions? Need Help?
Contact Us
• Nina Platt, Owner, Principal Consultant
• nplatt@ninaplatt.com
• Carrie Long, Research Analyst
• clong@ninaplatt.com
• Emily Harder, Office Manager
• eharder@ninaplatt.com
33. Cost Recovery: The Basics, a NPCI
webinar
Cost Recovery: The Basics, a NPCI
webinar
Contact Us for More
Information
• Nina Platt Consulting, Inc. (NPCI)
nplatt@ninaplatt.com
Call us: 612-235-7485
Visit us on the web: www.ninaplatt.com
Read our blogs:
http://strategiclibrarian.com
http://lawfirmintranet.com
http://electronicresourcereview.wordpress.com