May 26, 2010
TR Legal's New Panacea for the Shed West Era: Marketing Pushes Multi-Year Print Commitments and Not Just to Law Libraries
The always informative purveyor of marketing "facts," TR's Legal Current blog seems to imply that law libraries are moving to Library Maintenance Agreements to reduce West Print Spend. From Law libraries turning to Library Maintenance Agreements:
One place many law libraries with large expenditures on print resources have turned to manage their collections is West’s Library Maintenance Agreement (LMA) program. LMA’s provide libraries with streamlined billing plans that can help organizations save money, cut administrative hassle and simplify the library budgeting process.
Really? More likely many have scrapped their LMAs in this Shed West Era. See Betsy McKenzie's West pokes itself in the eye again. In a move to remedy print cancellations, TR Legal is trying to "herd," in McKenzie's characterization, law libraries into LMAs.
You did see the recent WSJ story, Thomson Reuters Profit Falls on Weak Subscriptions, right?
Thomson Reuters Corp. reported a 33% decline in first-quarter profit as it continued to suffer the effects of subscription cancellations during the depths of last year's economic swoon.
See also LLB's earlier post, Let's Speed Up Cash Flow for Print: West's New Billing System Moving from Monthly to Weekly Invoicing.
Do note, LexisNexis is about to start pitching multi-year print commitments, at least to academic law libraries. Click on image, right, for the announcement to attend a meeting in Denver. No specifics yet available but a big hat tip to Cornell's Pat Court for posting the announcement to law-lib. Like many academic law libraries, she notes that she will not be attending because "our cuts really preclude getting us locked into a multi-year agreement."
It will be interesting to compare TR Legal's LMAs and LexisNexis' MAPs but that will have to wait for another day. This post is about TR Legal Marketing's pushing multi-year print commitments to non-law library institutional buyers
TR Legal's Multi-Year Offers to Non-Law Library Buyers. TR Legal's push to market multi-year commitments extends well beyond law libraries. Here in Ohio, county law libraries are now responsible for coordinating the acquisition of legal materials county-wide since Jan. 1, 2010. This new situation has given me the opportunity to see how legal publishers pitch their wares outside of a law library setting. It's been an interesting experience. Titles thought to have been canceled in 2009 are oftentimes still on vendors' books as active. I'm not blaming TR Legal or LexisNexis customer service reps for that; professionals, that would be us law librarians, ought not leave it up to well-meaning and otherwise competent administrators in county offices and courts to deal with the oftentimes arcane ways and means of purchasing and cancelling in the legal publishing industry.
For small West accounts now under my management, ones that don't qualify under the LMA programs's $40K/yr threshold, I've recently received a multi-year proposal for one county agency account with an annual West Print Spend around 12K. Herding has started; I took a pass. Maybe later as in after the economy improves and our County cuts $4 million or about 5% of its budget by mid-year. Most forecasters, by the way, predict the economy won't improve before 2012. We too are "preclud[ed from] getting us locked into a multi-year agreement."
More interesting is an unsolicited multi-year offer sent by way of a form letter with boilerplate contract for a single judge's account. The judge's account consists of two Ohio official case reporters, that's right, two reporters. TR Legal herding to reduce print revenue bleeding is reaching down deep into the print continuation database when it goes this far.
The offer to the individual judge is called an "Assured Print Pricing Service." It offers by way of an order form either a 24 or 36 month minimum term billed at a set rate monthly with costs capped at 6 percent per year during the term of the agreement. The order form's cover letter offers under a bold, all caps heading:
LIMITED TIME OFFER - 50% OFF!
Agree to this 36-months, predictable pricing agreement no later than June 30, 2010 and we'll credit your current print invoice 50% (Your invoice must include at least one title from the enclosed order to be eligible for the 50% credit.)
Oh boy, such a deal. TR Legal still can't wrap its head around a one year subscription model.
Off course, if account charges go unpaid 30 days after due, the amount due and payable for the remaining Term "shall become immediately due and payable at the sole option of West" with interest and any collection fees. Understandable, even acceptable in principle, since a contract is a contract is a contract. But public agency contracts are subject to budget appropriations which is why TR Legal is on a de facto annual subscription model for the federal government. For an nanosecond, I thought about striking out Minnesota and inserting Ohio in the governing law and jurisdiction clause to see if West would accept this one modification but ... .
Terms of TR Legal's Assured Pricing Offer for This Little Account. The offer raises a number of questions. Monthly charges for the first year under the terms of the offer are $74/month or $888/year for Ohio St.3d and Ohio App3d and Ohio Misc.2d which are published in combined volumes. Our account reconciliation report for this judge's account for all of 2009 indicates print spend was $480 and only for bound volumes. Whoa, that an 85% increase under the "Assured Pricing Plan."
Year to year the number of print volumes varies but not much -- a volume more one year, a volume less another. A quick look at our shelves tells us 8 print volumes were published in 2009, 10 in 2008 and 9 in 2007 by bibliographic, not billing, date. The AR report indicates 11 volumes were paid for in 2009 and three during the first four months of 2010. TR Legal adds no editorial content to the official opinions so each volume is relatively inexpensive. In mid-2009 the price per volume increased from $43.00 to $44.75. Whoa, that's a 4% annual increase instead of the 6% annual increase under the "Assured Pricing Plan."
We looked a little deeper into the account reconciliation from January 1, 2009 to May 20, 2010 to see if TR Legal slipped in separate weekly advance sheet charges (list price for individual advance sheets at $15 per weekly issue) in the judge's account and the answer is "nope.".
Is TR Legal including advance sheet charges that haven't been billed to this account separately since Jan. 2009 by characterizing each title as "full service?" Looks like it might be since the Assured Print Pricing order form states ""Subscription service may consist of updates and/or supplements to the service, including but not limited to: Pocket parts, pamphlets, replacement or ancillary volumes, loose-leaf pages and other related supplemental materials." We''ll be watching to see if volume frequency increases more than 9-11 per year, pricing increases this summer by more than last year's 4%, and if advance sheets start being billed under this standing order account.
For the moment, let's assume 10 bound volumes per year with a mid-year annual increase of 4% to compare this account's projected on-going print spend as a standing order with the offered 3-year option under TR Legal's Assured Pricing Plan. We'll use July 2010-June 2011 as our first calender year and assume per volume pricing will have increased from the current $44.75 rate to $46.54.
After the multi-year term:
"Subscriber ... requests that West ... [be] further billed during the 12 months after the Minimum Term with a 15% increase of the Monthly Assured Pricing Charges for the most recent 12 months of the Minimum Term and thereafter at then-current Assured Print Pricing rates. After the Minimum Term, such subscription services may be cancelled by West or cancelled upon written request by Subscriber."
Meaning after 3 years, there's an automatic 15% bump up to $1,147,42. Under our assumed 4% per year roll-up scenario 2013-2014 print volume costs would be $523.52. "Thereafter at then-current Assured Print Pricing rates," means the next go-around may have higher or lower than the currently offered 6% annual increases if one buys into another multi-year agreement.
What's really "assured" here is that after 3 years, print spend will have increased 29% percent, from $888 to $1,147,42. If one opts for a two-year plan, print spend will have increased almost 22%, from $888 to $1,082.47. Either way, such a deal. But remember, if one agrees to this plan by June 30th, TR Legal will credit "your current print invoice 50%" which for this account would be a savings of between $22.38 and $44.75 depending on whether one or two print volumes have been shipped. And about those advance sheets... .
Bottom Line: A Word of Caution to Non-Law Librarian Purchasers. When one gets a form letter and boilerplate contract from TR Legal's "Strategic Marketing" department/division/whatever for a multi-year print commitment, be wary of whose strategy is being executed by tactics such as this one. It's about a guaranteed revenue stream for TR Legal during this Shed West Era. It's about assuring a 32-33% profit margin.
TR Legal is kicking its print-side marketing tactics up a notch. On the online side, WestlawNext marketing is reminiscent of selling Pez dispensers as a candy delivery system, if you are old enough to remember that. [JH]