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We’ve heard for more than a decade* about the demise of cost recovery for legal research. A number of longitudinal studies and annual surveys demonstrate the decline in direct pass-through of costs for legal research and business research as it has become the norm to think of it as overhead or a cost of doing business rather than a directly recoverable cost. The 2008 recession was a contributing factor, certainly. In addition, the rate of realizable recovery (as opposed to the attempt to recover costs) is far below fifty per cent. But this isn’t a doom-and-gloom scenario; there are clear upsides to legal research as overhead, like client satisfaction and workplace efficiency. And it’s reasonable to expect that associates and others will do better, more thorough research when less restricted by billing requirements, thus reducing risk and enhancing outcomes. The heightened client demand for services, problem-solving, and outcomes, as opposed to a focus on specific tasks and rates, is another good reason to move beyond traditional legal research cost recovery.

That said, certain legal research cost recovery is legitimate and ethical but it requires thoughtful evaluation and a strategic approach. It’s important for law firm leadership to make a distinction between the hard and soft costs of legal research and the tools and work associated with it. “Legal research” is often used as a catch-all phrase; for example, it sometimes, inappropriately, includes all of the analytical tools and document preparation applications that are components of legal research systems as well as the value added by information professionals with data analytics, business intelligence, and other work. Especially as products and tools on platforms sold by Lexis, Westlaw, Bloomberg Law, and Fastcase, for example, become more integrated, the dividing line between research and what information professionals and attorneys do to add value can become blurred. A firm should consider the range of services and tasks associated with legal research, identifying hard and soft costs, and have a clear policy.

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* The American Bar Association, for example, surveyed its Solo and Small Firm members in 2008 and showed about a 50/50 split between those who did full or partial cost recovery and those who did not. Prior to the 2008 recession, it was more typical, across law firm types, to see an overwhelming majority of firms reporting cost recovery for online legal research. Just about every study since shows a decline in straight-up cost recovery for legal research. If you’d like to read more, look for cost recovery discussion in the ABA Legal Tech and ALM surveys, for example.

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