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TAXPAYER ASSETS PROJECT - INFORMATION POLICY NOTE
CROWN JEWELS CAMPAIGN - Juris, Legal Information
August 30, 1994
- Lawyers Legal Research (LLR), a small online data vendor, now
provides online access to U.S. Supreme Court, U.S. Circuit Courts,
and 26 state courts for flat rate of $750 per year, or $10 per hour
(compared to the estimated cost of $240 per hour commercial rate for
lexis or westlaw). Service only includes recent court opinions (post
1990, and does not include West page numbers.
- LLR writes to Congress, supporting changes in the DOJ procurement,
such as public domain citation system, which would provide "level
playing field" for large and small publishers.
The letter, written by LLR President Joe Acton (jacton@llr.com),
follows:
August 23, 1994
Ms. Barbara Strack, Esq.
U. S. Subcommittee on Oversight
of Government Management
442 Hart
Senate Office Building
Washington, DC 20510
Re: DOJ's anticipated RFP regarding CALR; we support an RFC in advance of
the RFP
Dear Ms. Strack:
After speaking yesterday with Ms. Eleanor Lewis, I felt compelled to write
you a letter from the perspective of the third tier in electronic legal
publishing; for our purposes, the first tier is occupied solely by West
Publishing, the second tier by Mead, Thompson, and Matthew Bender, etc.,
and the third tier by virtually all other legal publishers.
Though there are many legal publishers in the United States, only three
compete in the online computer assisted legal research field: West, Mead
and ourselves; those CALR products are, respectively, Westlaw, Lexis and
Lawyers Legal Research OnLine. As you can see, each tier is represented in
this competitive field; that is not to imply, however, that there is an
equality in the playing field upon which we compete.
There are two fundamental barriers to entry into the electronic legal
publishing industry: 1) electronic access to opinions, and 2) official
recognition of those opinions once published, i.e., a citation system.
Electronic access to state appellate opinions has been dominated by West,
due in no small part to its influence with courts through the National
Reporter System, i.e., West's compilation of opinions decided in the United
States. We do not know how long the National Reporter System has been
publishing opinions in book form, but it is safe to say that every
practicing lawyer in the United States uses this system in one form or
another. When West began contacting courts in the 70's and 80's to gain
electronic access, there was little hesitation to provide West with
whatever access it desired based on a trade for either its books or access
to Westlaw. This arrangement remains so entrenched that even Lexis has
difficulty obtaining electronic access to the opinions - Lexis is forced to
scan 60% of the opinions they run on their system.
Many state courts have "exclusive" arrangements with West wherein West is
given electronic access to the opinions in exchange for the Court's access
to Westlaw either free or at a greatly reduced rate. In all instances with
which we are familiar, the court is prohibited by the terms of the
agreement with West to disclose the actual provisions of the arrangement.
When we have tried to gain electronic access to certain courts, we have
been told that the court cannot provide access for us because the agreement
with West specifies that if the opinions are made "generally available" to
the public by the court, West can abrogate their agreement with the court.
In virtually all cases we have seen, the courts place a very high value on
the access to Westlaw that they receive in exchange for electronic access
to their opinions: the State of Washington estimated it stood to loose
$250,000 worth of free Westlaw time if they gave us parity access; New York
estimated it would loose $500,000.
In some instances state courts are willing to give us electronic access to
their opinions, but do not have the physical means by which to do so, since
the only computer the court has to transmit opinions to anyone was given
them by West as part of a West contract; while West allows the court to use
the computer for any purpose it chooses when not transmitting opinions to
West, the court is specifically prohibited from using the computer to
transmit opinions to anyone except West. Moreover, in some cases, the
court is prohibited by its contract with West from allowing anyone
electronic access to the opinions for a certain period of time, i.e., the
electronic version of the opinions is "embargoed" for 48 hours.
The secondary barrier to entry is a much more subtle, though no less
invidious. Simply stated, once a publisher has electronic access to the
opinions of a court, the market value of those opinions is ameliorated if a
court will not accept the publisher's citation system. In short, most
courts have been educated in the West system and continue to use it, both
because it is convenient and because West continues to support court
systems by trading them products and services for access.
Notwithstanding the West domination of electronic access to state appellate
opinions, we know of no state in which the appellate courts demand that
lawyers cite to an exclusive West citation system. Thus, West dominates
the state market through its operational agreements for electronic access,
not its citation system, per se. Such is not the case with federal courts.
In contrast to state courts, most federal courts require that pleadings
cite to the Federal Supplement or the Federal Reporter; this alone affords
West a two-fold competitive edge over all other legal publishers: a) it
essentially makes West the de facto official reporter for most federal
courts, which, b) essentially chills all competition from other publishers
to provide direct competitive products.
West has made the very wise strategic decision to closely associate both
its electronic product (Westlaw) with its book products (the National
Reporter System); this marketing strategy allowed West to export its
federally protected Fed Supp and Fed 2nd (now 3rd) citation system to its
electronic platform. The result of this is that other citation systems
which are more appropriate in an electronic medium are foreclosed from
usage because the federal courts continue to require lawyers to cite to the
page-based West system when in federal court.
Because West began as a book publisher, its citation system naturally
favored page numbers, even in an electronic format where there are no
traditional "pages". Several other citation systems have been introduced
by electronic publishers (each line being numbered, paragraphs being
numbered, etc.) but all have thus far failed because the federal judiciary
requires citation to the West system. Indeed, even the federal
government's AOC attempted to promulgate an Electronic Citation System two
years ago that was voted down at the Judicial Conference after fierce
lobbying by West.
The two-fold barrier to entry I have attempted to describe has operated and
will continue to operate to insulate West Publishing from competition,
maintain high pricing throughout the marketplace and ultimately deprive
both lawyers and private citizens from obtaining the same timely access to
opinions as those who can afford West's fees.
The DOJ's greatly anticipated RFP for CALR will greatly impact the
competitive environment of the electronic publishing industry for years to
come. It should be obvious that West, given its operational dominance and
its federally favored citation system, is poised to control both the
bidding and the delivery of service; there is a strong likelihood that
without public comment on the CALR RFP, the bid is likely to be drawn so
narrowly that only West can successfully bid.
Because the federal courts require citations to West (at least insofar as
"jump" or "pinpoint" citations are concerned) West is the only bidder with
electronic archives which include an acceptable citation system; it is true
that anyone can bid, but since only West and Lexis have electronic
archives, their bid will clearly be lower than other bidders who will have
to scan opinions or key them in.
What the Department of Justice must come to understand is that as guardians
of our justice system, they must not only protect, but lead. The solution
to this two-fold barrier to entry is a two-fold approach: 1) open the
bidding to multiple vendors who would bid on sub-portions of the entire
CALR contract, and 2) require that the successful bidders use a
vendor-neutral citation system that does not foreclose others from using
it. While neither approach in and of itself would force the judiciary to
accept such a citation system, by making such a requirement, the DOJ goes
far in setting an example by the Clinton Administration that such a system
is the favored evolutionary path for federal citations.
If it is axiomatic that more competitors in a given field generally equates
to lower prices, better products, and more efficient service, then it must
be equally axiomatic that fewer competitors in an industry produces the
opposite result. This is clearly the case in the electronic legal
publishing industry.
As long as there are only two major competitors in the field, Westlaw and
Lexis, there will be little price competition. Both services heavily
compete in services and benefits, but as to pricing, the annual usage on
one system is going to cost about the same as the annual usage of the other
(assuming stated retail prices and no "special" programs). The fundamental
question is whether the United States Government should act in concert to
perpetuate this system.
Our service, Lawyers Legal Research OnLine, carries slip opinions and
decisions from the U.S. Supreme Court (we are members of Project Hermes),
all Federal Circuit Courts, and 26 states; we have access proposals in
front of all other states and are working to acquire full coverage.
Lawyers and law firm in all fifty states use our service because we offer
most of them their only choice for electronic access: 95% of our users do
not have access to either Westlaw or Lexis because they cannot afford them.
Our pricing is attractive: $750 per year flat rate or $6.25 to $10 per our
- no downloading or printing charges. We even offer free Internet E-mail
access and will be adding practice forms and shareware this year.
Regardless of how much our users like our service, regardless of how much
money they save by using us, regardless of the fact that many of them
cannot afford to use Westlaw of Lexis, NONE OF THEM CAN CITE TO OUR
CITATION SYSTEM IN FEDERAL COURT. Thus, no matter that we give our users
the exact same opinion they can get on Westlaw or Lexis, our users cannot
use our product, by and large, in federal courts.
If there were a vendor neutral citation, there is little doubt that the
market would soon observe two related events: 1) more companies like ours
will attempt to enter the online CALR market, and 2) the cost of electronic
legal research will fall - not only because more systems like ours will be
providing access, but because Westlaw and Lexis will have to price compete.
I believe it is in the interests of the DOJ and all parties involved, to
preceded the RFP with an RFC. I have yet to observe a circumstance not
bettered through reasoned discussion. If, after comments are received, the
DOJ is convinced that concerns such as those I have outlined here are
without merit, the contract can be bid and let with no harm to either the
successful bidder or the DOJ.
Please feel free to contact me in the event you have questions regarding
the above or other related issues.
Sincerely,
Joe W. Acton
President
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