Cover feature: TO CUT OR NOT TO CUT?

Many libraries and information units are being faced with difficult decisions regarding the retention of resources. Daniella King considers the thorny issue of cutting costs, and the impact of the current economic climate on library budgets.

With 5 April 2009 quickly approaching, most librarians will be thinking of budgets and planning for the next financial year. To say that the current year has been difficult is probably an understatement, and the next year promises to be no better. Every penny spent needs to be scrutinised, every decision made needs to be analysed and no sector is immune.
Winckworth Sherwood is a highly individual law firm, committed to providing a relevant, competitive and professional service. With its origins going back over 200 years, we cover practice areas such as social housing, ecclesiastical and charities as well as being one of the handful of firms which operates as a parliamentary agent. The firm is very aware of the many challenges associated with the ongoing credit crunch and, as the library and information manager, I must ensure that we have the relevant resources we need without breaking the bank.

Background to the library and how the budget is divided
At Winckworth Sherwood, the library budget is spilt into 11 segments. The main segment is labelled ‘main library’ and covers a variety of both hard-copy and online resources that are used by the whole firm such as access to both Halsbury’s Statutes and Halsbury’s Laws. The management of this budget is purely my responsibility and any overspends are my fault!
The other ten segments cover the individual departments within the firm. These include specialised resources that are generally kept within a department. Most departments have competing needs and requirements, so what is essential to one department may be of no value to another. After all, not all the departments would feel that Crockford’s Clerical Directory is essential, but there would be a near riot by our ecclesiastical department if I threatened to cancel it. We have a named partner in each department who has ultimate authority over this budget, while I deal with the day-to-day responsibility and all purchasing. If these budgets are overspent, then ultimately it is the fault of the partner in charge and not mine.

Justifying your overheads to your finance director
Whether during good or bad times, all departments within a commercial organisation must justify the costs involved in its running. Therefore, librarians must not just be experts in the provision and management of information, but also experts in financial management.
It is far too simplistic to say that this is solely about paying invoices, it is about understanding the goals of the organisation and how, with the effective allocation of resources, the librarian can help to achieve these.
Most libraries will be answerable to a finance director. I work closely with my finance director looking at expenditure across all library budgets, seeing whether there is a pattern of spending and whether any budget needs to be increased for the next financial year.
Finance directors seldom use the library; they are accountants, so their main motivation is to save money. They may not understand why a source is essential, and their first question tends to be ‘how much is it?’ and, second, ‘can we make any savings?’
One prime example of this was when we first considered subscribing to some of the Practical Law Company (PLC) modules. As a smaller firm, we don’t have any professional support lawyers (PSLs) so the provision of external know-how and precedents is of the utmost importance to us. When I joined the firm in 2004, we had no online precedents, just hard copies of the Encyclopaedia of Forms and Precedents and a few CDs that were cumbersome to use.
I suggested looking at PLC as I was used to it from my previous firm, but there was initial opposition to this. The cost was the major stumbling block, as the cost per user was higher than anything else we had access to, while others felt that we shouldn’t be relying on external precedents. I undertook a trial with a major feedback exercise considering issues such as:

Comparing the potential cost of hiring a PSL;
Negligence issues – whether we could ensure that any internal precedents we have are completely up-to-date;
The time that could be saved for both solicitors and secretaries (drafting, typing and proofreading and so on); and,
Whether other law firms were using it, and whether this would put us at a competitive disadvantage if we didn’t have it.

The main factor though was to get positive feedback during trials, even if this involved nagging lawyers to use it – and even providing chocolate as a bribe! The comments I received included:

‘Absolutely essential’; and,
‘I’m able to advise clients on new areas of the law’.

Five years on, we now subscribe to nine of the PLC modules as well as having the Encyclopaedia of Forms and Precedents online. Surely there can be nothing better than being able to justify expenditure and future price rises by stating that it can help win or retain clients, especially if such services have been used for pitches and tenders. Finance directors need to hear that lawyers don’t just ‘want it’ but rather ‘need it’.

Explaining pricing increases to those in the firm without a library background
This can be problematic, as I am sure many librarians have problems understanding it themselves. There is a baffling array of pricing structures and formulae. Hard-copy costs are in general easier to predict, whereas our main worry is the spiralling cost of online resources.

Books
Book expenditure can vary year-to-year depending on the number of new works and new editions that come out. However, the prices of books are widely published and are generally standardised – unless you shop with Amazon. This makes predicting and explaining price rises easier than some of the other formats that are available.
There are a few simple measures that you can take, however, without affecting the quality of service you are providing. If you have a library-management system, you can easily work out how many times something has been borrowed and this gives you an idea of whether you need to subscribe to the new edition. It will also show you who has taken the book out during this period, so you can easily contact these fee earners for feedback. You could also reduce the number of copies of the same title that you have.

Looseleafs
This is one of those formats that is difficult to live without, due to the benefits of being comprehensive and up-to-date. Lawyers, however, find them cumbersome to use, while librarians see them as an administrative nightmare. Initially, you need to pay for the main work, but then there are annual costs relating to the updating. There are two main ways that these are costed:

Cost per issue – it may not be clear how many releases there will be, so these are unpredictable in terms of cost; and,
Annual basis – all releases are included in a one-off annual payment.

This is not the end of the issue, however, as there is the additional ‘human’ cost of keeping these filed and up-to-date, often resulting in thousands of pounds worth of staff time.

Journals
As with books, journal costs are widely published, although some discounts are available if you subscribe to multiple copies. There may be discounts available if you renew using direct debit (not always possible in some law firms) or if you renew for two years instead of one.

Online
This is when it gets tricky! There is a baffling array of ways in which these are priced, such as:

Benefitting group – how many people have a potential interest in the service;
All fee earners – this may include trainees, secretaries and even librarians; and,
Total number of partners.

Online prices tend not to be published and can also depend on factors, such as:

How many other resources you have with that supplier; and,
How well you know your representative.

There are also other ways that you can actually pay, such as:

One-off annual payment;
Monthly payments (this may include an additional surcharge); or,
Pay-as-you-go

Most librarians would agree that online price increases have been exceptionally high over the past few years and impossible to predict. During 2008/2009, we were being quoted the following price rises by our three main online providers:

Supplier A = 18.84 per cent;
Supplier B = 39.7 per cent; and,
Supplier C = 19.7 per cent.

Although our firm had experienced a small rise in the number of employees, these rises were far above and beyond the inflation increases for this period. Ultimately, you need to negotiate and barter, even if it makes you feel like you are operating in a Moroccan Souk!
Most suppliers will be able to give you an indication of the likely price rises you can expect in the coming year. They can provide you with usage figures so that you can see how often the services are being used and by whom, which helps to show whether the service is still relevant. If you are forced to cut costs, there may be some options that can help without having a detrimental effect. For example, many online subscriptions are modular in nature, so there may be underutilised modules that you could dispense with. If not everyone is using a service, will the supplier allow you to amend the subscription to include a fewer number of users? Will you get a further discount if you renew for two years rather than one?
There is also another issue that helps to complicate things even further – integrated subscriptions. When faced with a steep price rise last year, we made a decision that we needed to give up the hardcopy element of one of our integrated subscriptions. The hard-copy element was 41.7 per cent of the total price, but this wasn’t the amount of saving we would get, as the price of the online resource rose, meaning the saving would only be 13.3 per cent. This sort of pricing structure is very difficult to explain to finance directors and is done purely to help publishers keep up their profits with no consideration of the pressures faced by librarians.

Understanding user requirements to select hard-copy versus electronic materials
Despite various predictions, the book isn’t dead and the paperless office still doesn’t exist. Increased functionality and online coverage means that many libraries have reduced the number of hard-copy sources of legislation and case reports that they hold.
However, the traditional book still has a place due to:

Technology and transportability – whether taking it to an external client meeting, taking it home or reading it on the bus, lawyers still prefer a book!
The cost of e-books is prohibitively expensive. There is one text book where the difference in the cost of hard-copy and an online subscription was nearly £9,000.

Hard-copy legal publishing has been declining and will continue to decline with the growth of online access. In my opinion, costing decisions that have been made by publishers have resulted in many missed opportunities, and a decision by many libraries to keep the traditional book.

Getting maximum value from your existing resources in light of budget cuts
Whether it is because you need to find resources to cut, or whether you need to get the maximum value from what already have, the following issues are important to consider:

Conduct an information audit. Find out exactly what you have, where it is kept, what it costs and who is using it;
Remind people what the library has access to. This may include in-house training, increasing use of intranets, in-house production of newsletters and legal updates;
Continue to monitor usage of online resources and keep abreast of changes to the resource;
Cost recovery. Whether there are any resources that could be charged back to a department or a client, and whether the time and effort involved in recharging make this worthwhile;
Marketing and promotion. Help increase the library’s profile by reminding users what you can do for them;
Get feedback from the fee earners. Find out what projects and clients they are currently working on;
Renewals. Before any renewal see what their competitors have been doing. There may be a better resource out there which offers better value for money. Also, find out whether the fee earners actually want you to renew;
Provide services to other members of your firm – marketing, accounts, IT and even, if there is the potential to do so, directly to clients; and,
See what competitors are doing and how they are funded in comparison to you – go out there and network!

Free resources
There is a general consensus that if you pay for something then what you are using is better, more comprehensive and more up-to-date. However, there has been a phenomenal growth in the provision of free legal resources over the past few years, but are legal publishers having sleepless nights over this? Can we cancel all our online resources?

Some free sources are well-established and here to stay, such as:

Cases – examples include BAILII [British and Irish Legal Information Institute], the Employment Appeals Tribunal and the House of Lord’s Judicial Office. Coverage is selective and not very comprehensive, and abstracting and cross-referencing is virtually non-existant; and,
Legislation – The Office of Public Sector Information and Statute Law Database. Coverage and currency is poor especially as acts are either not updated or could potentially be years out-of-date.

The provision of accurate and comprehensive legal information is of fundamental importance. At present, the free resources only offer a partial solution to this, so legal publishers are still a necessity. Any law firm that is using only free resources is ultimately making a false economy. Libraries need to ensure that fee earners are using the most up-to-date information so that clients are getting the best advice. Hopefully, this will help keep existing clients happy and help to win new clients, which in turn will help your firm through the current credit crunch.

In summary
Over the coming weeks, librarians will be faced with difficult decisions; for example, do you really need both the Encyclopaedia of Forms and Precedents and PLC? Can you cancel either LexisNexis Butterworths or Westlaw?
Both legal publishers and law firms are suffering during the current economic downturn, so it is more important than ever before that we work together as much as possible to find a solution to our budgetary problems. Librarians need their suppliers to be providing realistic price rises and offering flexible pricing modules.
Librarians must work together with their users on any decision that needs to be made. The sooner you plan and evaluate your resources, inform your finance director and get user feedback the better! All resources must show a return in their investment so no resource is immune.
And don’t forget – cuts can also affect staffing levels. A downturn doesn’t always mean a decrease in the need for information and the services of the librarian, so don’t stop proving your worth and highlighting the value of the service that you provide to your organisation.

Daniella King is library and information manager at Winckworth Sherwood and president elect of the British and Irish Association of Law Librarians (BIALL). She can be contacted at dking@wslaw.co.uk