Law in Contemporary Society
[still under revision]


-- By GraceChan - 17 Feb 2010

Legal research costs tend to be the second highest cost at law firms, after personnel costs. In 2008, the legal division of Thomson (West) generated $3.5 billion in revenue with a whopping operating profit margin of 32.1%. This money is made from information that is both free and public, though, to be sure, there is value added in the organization and additional information provided by Westlaw. In the first part of my essay, I will discuss the problems with the current system of legal information.

The nature of the duopoly of Westlaw/Lexis makes it unlikely that change will come from within. For the second part of my essay, I will discuss the potential impact of Google Scholar Legal and Online Journals (SLOJ) and other possibilities opened up by the Internet.

The Problem With the System Today

The Vendor-Firm-Client Structure

For the past 25 years, most law firms have operated on a model of passing online legal research expenses to the client, a practice encouraged by Westlaw and Lexis themselves. Yet it is the law firms—the party spared the total costs of using online research—who negotiate the prices with the vendors. This means that law firms have a weaker incentive to pressure the vendors on price than they otherwise might. The duopoly structure has not resulted in the benefits associated with a free market economy. In fact, annual price increases in Lexis and Westlaw's supplements have outpaced inflation. Neither vendor uses price as a marketing strategy, and both negotiate fixed rate contracts with customers (typically confidential) rather than charge a flat rate.

Lack of Innovation

Rather, like most oligopolies, Westlaw and Lexis are competing on product differentiation (for example, adding tabs and sidebars) rather than on price or in enhancing usability. (Consider that a cut in price may cause the other to respond similarly, leaving both with the same market share but with a lower profit margin.) Further, most of Westlaw and Lexis' revenue is supplied by big law firms, which tend to be more conservative and reluctant to experiment with innovative technologies—even Lexis and Westlaw were initially met with resistance. Ultimately, this lack of pressure from each other and from the consumers gives the producers little incentive to invest in research and development.

The Future of Legal Information Access

Differences Between Then and Now

How John West Made His Fortune

In 1872, John West, recognizing an inadequately-filled niche in the legal information market, began to issue a series of reporters tied to geographic regions containing all the latest court decisions. Prior to his entry into the market, legal information was in disarray. An excessive number of reports was in circulation with no coherent system of organization. Significant time lags existed with the slow release of state court decisions and the delayed availability of publications from the East Coast to the west.

The Internet Changes Everything

Today, we no longer need to worry about typesetting handwritten opinions or time lags in the availability of information. As more courts begun using word processing to write its opinions, digital copies are made immediately available. Transmission costs are lower while search algorithms continue to improve. Sites such as Justia, Cornell's Legal Information Institute offer free large collections of legal documents.

In fall 2009, Google Scholar rolled out a new search feature for legal texts. Although not posing a serious threat to Westlaw or Lexis, it has taken over the niche of free search services like AltLaw? and PreCYdent? , both of which have shut down in its wake. Still, West employs a 22-step editorial process of 800 attorney-editors who analyze the cases, write the summaries, and approve computer-generated recommendations, with multiple people cross-checking each other's work. Google Scholar, on the other hand, is overseen by three people, none of which have a legal background. Case analysis will be accomplished by automated searching and links. It's designed for members of the public.


Also with the Internet comes the potential for large-scale distributed collaboration. As demonstrated by entities like Wikipedia, network of volunteers can now do things that previously only large businesses with deep enough pockets and staffs could have done.

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Webs Webs

r5 - 27 Feb 2010 - 04:38:43 - GraceChan
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