Friday, April 28, 2006

Ken Svengalis, Law Library Consumer Watchdog

OOTJ is delighted to present, with permission, Ken Svengalis' recent excellent post to Law Lib listserve about the rising costs and other problems with print resources and serials in law libraries. Let us recommend to you his upcoming

10th edition of the annual Legal Information Buyer's Guide & Reference Manual
(due out May 10)

Here is Ken:

In February, I began updating all the pricing information in my book. This process includes updating all the initial costs of reviewed publications and adding the 2005 supplementation costs for all the supplemented titles to the string of supplementation costs which go back, in many cases, to the early. 1990s. This is a very time-consuming task. Some publishers are very cooperative--LexisNexis, (including Matthew Bender and Shepard's), Aspen, and others provide spreadsheets of supplementation costs. Others, particularly West, are not cooperative. It is only through the aid of many law librarians that I am able to laboriously collect these supplementation costs for the year just completed. The West web site provides some supplementation cost information (much more than former years) by clicking on "Choose Volumes," but the figures for individual components are list costs, not the more useful subscriber costs which are more relevant to libraries on standing order. Moreover, one cannot readily use this feature to ascertain the exact cost for the entire calendar year just concluded unless one uses the fill-up
feature and does it right after the year has ended. And even if one times it right, thecosts are about 15-17%% higher than what a subscriber paid for the same items. West does keep this historical data in its system back a number of years, but they will not readily provide it.

But I wonder how many of you realize that West is the only legal publisher that will not aid the AALL Price Index Committee in its work. That's right. All the other publishers willingly provide the committee with supplementation cost information, but West has
REFUSED to do so. Their current rationale is that the discount pricing of their Personal Practice Libraries makes these figures for individual titles irrelevant. Of course, this conveniently allows them to escape scrutiny of their supplementation cost increases, which
are often quite substantial, and clearly in excess of what their competitors are doing. The Personal Practice Libraries may provide some savings, but libraries are forced to buy more stuff and keep it updated, often unnecessarily so. Sadly, AALL will not call them on it and simply lets their refusal go unchallenged. I served on the Committee which established the new Price Index and served on the index committee for several years after that. All during that time, we heard that AALL leadership was going to approach West management through proper channels to secure their cooperation. Several (now) past presidents promised me personally thy would talk with West management. It never happened.. Consequently, the Price Index figures are obtained from the financial records of various law libraries. This is not to say that the figures in the Index are not accurate, but they probably do not match up with West's own internal
numbers, which I have generally found to be reliable. But West's refusal is unconscionable and contemptuous of its best customers.

Another point needs to be made here. The former FTC Guides for the Lawbook Industry specified, and the present (voluntary) Guide to fair Business Practices for Legal Publishers specify, that publishers were (or are) to provide supplementation cost history. The FTC Guides required the last two years worth. The current Guide to Fair Business
Practices for Legal Publishers specifies (Principle 2. Article 3, i, iv) that publishers are to provide "Where possible, historic data on the cost of supplementation for the product." In my view, this is the most important provision in the entire document, yet it is ignored by West. It was once the practice of some publishers to provide this information on print flyers. Few now do so on web sites (BNA Books being one notable exception). But most at least provide this information to the P{rice Index Committee, or to yours truly, upon request). West does neither. Yet it would be a simple matter to include the string of annual supplementation figures to each product listing on their web site--a feature far less involved than all the individual component pricing they already provide. We all operate in a free market. But at least give us the information to make informed purchasing (and cancellation) decisions. There is no excuse for not being transparent on matters of pricing.

The question we all have to ask ourselves is this: Are the monetary contributions which West makes to our association (exhibit fees, scholarship contributions, etc.) which help keep our dues low, worth the millions of dollars in excessive costs our libraries collectively pay year after year for West publications and which are dramatically changing the size and scope of our collections. Case in point. In 1996 (the year of my 1st edition), the Atlantic 2d advance sheets cost $215,00 annually. They now cost: $689.00, an increase of 220% on 10 years. And this is just one example of thousands of such titles. If your library's budget hasn't increased 220% over that time span, you've obviously made a LOT of reductions in your collection and you can thank the bean counters at ThomsonWest for it.

Supplementation costs are one thing, but the initial costs of West publications also bear scrutiny. Generally speaking, I update the initial cost figures in my book in February and March. However, this year, I noticed that prices were not only up (as of February) over 2005, but that, in April, another round of price increases took effect. In ten years of tracking West prices, or those of any of the major legal publishers, I have never seen this happen. This was a seismic price shift for which one would have to go back to the bad old Matthew Bender days to find a parallel. Even in Bender's worst years the annual increases never exceeded 25%. Here is a sampling of West's two-pronged price increases between 2005 and 2006 (where available, I include the intermediate price as well as the current price) and the percentage increase from 2005 to 2006:

Modern Workers Compensation 580--627--795--37.06%
Lane. Medical Litigation Guide 700--883--1026--46.60%
Lane. Goldstein Trial Technique 462--630--715--54.77%
Federal Procedure 2798--3293--3618--29.30%
Causes of Action 2d 1007--1234--1497--48.65%
Am Jur Trials 99 2037--2436--2831--38.98%
Proof of Facts, 1st-3d 3213--4245--4740--47.50%
Am Jur Pleading & Practice Forms 2700--3886--43.90%
Stein. Personal Injury Damages 650--721--838--28.90%
Peel. Consolidated Tax Returns 390--612--56.90%
Social Security Law & Practice 1950--2002--2300--17.90%
Ferrey. Law of Independent Power 422--516--800--89.57%
American Law of Products Liability 1794--1995--2441--36.06%
Callman. Law of Unfair Competition. 1599--2048--28.08%
Martinez. Local Government Law 661--799--875--32.37%
Am Jur Legal Forms 2250--2578--2800--24.44%
Fletcher Corporation Forms Ann. 1263--1600--1888--49.48%
Nichols Cyclopedia of Legal Forms 1968--2309--2956--50.20%
Dore. Law of Toxic Torts 1088--1282--1489--36.82%
Malone. Envir. Reg. of Land Use 331--381--447--43.72%
Novick. Law of Environ. Protec. 542--664--771--42.25%
Stever. Law Chem. Reg. & H. W. 920--1309--42.28%
Wright & Miller. Fed. Prac. & Proc 1400--1867--2021--33.35%
Fox. Health Care Financial Trans. 257--623--142.41%
Miles. Hlth Care & Antitrust Laws 873--1242--42.26%
Rep. of Wit. Bef Fed Grand Juries 386--626--62.17%
Nichols. Drinking/Driving Litigation 580--875--962--65.86%

I could go on...

Obviously something was going on here, like an internal pricing study which produced the second round of price increases in addition to the "normal" hefty annual increases. And maybe a sense that the Justice Dept. Antitrust review ala 1996 is now ancient history and that no one is watching. I am indebted to the West web site for all the numbers.

As I discovered what was happening, I had to laugh each time I received one of those West holiday promotional e-mails offering, for example, a St. Patrick's Day 20% discount on every order of $150 or more. Let's' see now, Fletcher Corporation Forms Annotated: Old
(2005) price: $1263.00. New price $1888 minus 20% = $1510.00. Certainly no pot of gold there. Reminds me of the furniture store sign offering 20% off--20% off of what?

Then there are the less generous offers-- a box of chocolates or a $50.00 American Express gift "cheque" (parlez-vous francais?) with $250 purchase (too late, that was the March Madness promotion that expired March 10, 2006). Do they really think that no one would
notice that all the promotions were preceded (or accompanied) by these across the board price increases of unprecedented size.

Another thing I have noticed when comparing West to the competition (if there really is competition in the particular subject areas in which you are interested): LexisNexis Matthew Bender price (i.e. annual subscription rates) increases are generally much lower
across the board (about 5-7% annually depending on the year). Ditto BNA: 5-6%. Also, the initial prices of LexisNexis (i.e. Michie) titles may remain unchanged for several years in a row. But West increases are significantly higher and relentless; and few opportunities to raise initial prices or supplementation costs are missed. It is clear that the bean counters watch every title and make every effort to make certain that supplementation costs rise (churn out another revised volume, jack up cost of pocket parts, revise index vols., etc.).

It is clear that, when preparing a budget, you must ascertain what percentage you are spending with each of the major publishers and then apply an appropriate percentage increase to each of them based on the available data. And unless you scrutinize West's increases, in particular, and take steps to control them (through cancellations), you will find that West will become akin to the Blob that consumed the law library.

I don't know if anyone else caught these two rounds of West price increases, but it should alert all law librarians to pay close attention to West pricing policies. You simply can't afford to ignore what they are doing because they have obviously devoted considerable time and staff to the effort, and then ply us with stuffed animals and luggage once a year at the annual meeting, They are also now sponsoring many of the SIS receptions as well as the big West bash, ALL of which WE pay for--OVER and OVER and OVER AGAIN. The West PR machine is certainly well-oiled and we have to resist being co-opted either as individuals or as an association.

Ken Svengalis
Rhode Island LawPress (celebrating it's 10th year as consumer watchdog--RUFF!!!)

The photograph shows Ken receiving a lifetime achievement award from Tracy Thompson and Darcy Kirk at the LLNE luncheon at the 2002 AALL annual meeting.

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