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No business can survive without paying attention to costs, especially for those things that have a significant impact on the bottom line. With the large outlays required for staff and resources and the space required to house them, libraries certainly qualify as a major budget item. Even so, until recently, spending the money to maintain a library or information center was considered a necessary albeit expensive part of doing business. Technology has changed that. Today, a significant percentage of the information used by attorneys is available to end users from their desktops. The physical library is used less and less often, leaving attorney-managers and administrators to wonder why library costs haven’t plummeted downward, as logic seemingly dictates that they should. In fact, many law firms have reduced expenditures for print materials and have also cut costs by reducing the square footage of their libraries. But while the cost of maintaining a physical library may have declined, other expenses are heading in the opposite direction; as a result, the overall cost of meeting information needs has increased. It is the responsibility of the library manager to explain why this is so, by describing the components required to provide quality information services to lawyers and itemizing the costs associated with each. In addition, library managers should explain how these services benefit the firm, quantifying the benefits where possible, and justifying their impact on the bottom line. FROM COLLECTION TO ACCESS To understand the costs involved in meeting information needs, one must first understand how technology is creating a fundamental change in the information delivery model. Print materials are not gone — and never will be — but they no longer sit center stage. The transition from print to electronic resources has been in progress since the mid-1970s, when Lexis and then Westlaw were introduced, but it picked up speed in the last decade. Not only was there a noticeable increase in the quantity and quality of information available via the Web, but also Lexis and Westlaw introduced flat-fee pricing structures that allowed firms to better predict and control costs. These changes, combined with economic pressures to reduce the size of the library, led some firms to jettison their reporters and rely solely on the electronic services. According to the 2001 survey conducted by the American Association of Law Libraries (AALL), the average private law library now allocates more than half of its resource collection budget to electronic resources. As a result, the information delivery model is rapidly changing from the collection of information (books on shelves in a physical space) to providing access to information (links to Web sites on an intranet). A model based on access rather than collection has a number of advantages: It allows the organization to deliver quality products and services to patrons regardless of location, and it allows the organization to avoid some of the expenses associated with duplicating resources and staff in multiple locations. However, as with any system that relies heavily on technology, the new model is more complex, more difficult to administer, and more expensive than the old one. COST COMPONENTS What’s needed to provide access to information and services can be grouped in four categories: content, infrastructure, personnel, and space. Content. Determining the cost of resources used to be easy: Look at what you spent last year, throw in something for new purchases, apply an inflation factor, and that was that. Now the products themselves keep changing, along with the pricing structures. Add to that the difficulty of predicting costs for pay-as-you-go databases, and budgeting for resources is no longer a task for the faint of heart. But, challenging as these calculations may be, they are just the tip of the iceberg. Providing end users with access to electronic content requires much more than a contract with the vendor, and each of these additional elements has a cost. Consider hardware, for example. Most likely, everyone who will use the product already has a computer, but will you need more printers? People of all ages dislike reading from a screen; as electronic resources replace print materials, many firms have had to increase their printing capacity. Next, consider how users will gain access to each product. Will they have to reach the program from the start button on the desktop, or will links be provided on the firm’s intranet and in the online catalog? Will electronic periodicals be delivered to individual in-boxes or will users receive an e-mail with a link? Are user IDs and passwords required? If so, what happens when an attorney can’t find his password at 10 p.m.? Once access has been provided, how will users learn about the products? How will they be trained? How will they be informed about inevitable changes to the content, search language, and the like? What if they use a resource only once a month and therefore have trouble remembering how? What if the same information can be found in several sources — how will they learn that Resource X works best when you have a citation and Resource Y is more effective for subject searches? All of these issues must be addressed to provide efficient and cost-effective access to the resources. Infrastructure. Library infrastructure refers to systems that capture and manipulate the data used to manage internal operations and to deliver products and services. Examples are library portions of the firm’s intranet and Web sites, integrated library software used to automate the major technical services functions (cataloging, acquisitions, serials and circulation control), software used to create an online catalog mounted on the firm’s intranet, and call-center software used to provide reference services to users located in other offices. Infrastructure costs are related to firm size (number of attorneys, number of offices) and also to the number and the level of the services offered. A major decision for multi-office firms is whether each office library should create its own infrastructure or whether a single system should be shared by all. If systems are shared, a method for allocating costs among the offices must be devised. Personnel. Staff costs include permanent staff, contractors and temporary help that may be called on through the year to assist with particular projects. Although some predicted that desktop access to information would eliminate the need for library staff, just the opposite has proved true. Educated, trained, and experienced staff members are needed more than ever to review and choose electronic products, train users, select content and update intranets, enter and manipulate data in library software, provide sophisticated research services, and handle the many other tasks necessary to operate a high-tech library. The AALL survey supports this contention. The average number of attorneys served by one library staff member has been declining since at least 1997, when the ratio was one library staff member to 26.4 attorneys; in 2001, the ratio was one to 23.6 attorneys. Not only are firms putting more library personnel to work, they are employing mostly professional-level staff. According to the AALL survey, professional staff outnumber nonprofessional staff by a ratio of almost 2-to-1. Space. Space is one area where library costs have declined significantly over the years. The primary method of reducing space costs is to reduce the square footage and thus the lease costs. Some firms have further reduced the cost of the space by locating the library below grade or in other less-desirable space. Costs are also saved by designing the library as a workplace rather than a showplace, replacing solid wood reference desks with modular work stations and Oriental rugs with carpet tiles. COST RECOVERY There are two major areas of cost recovery available to private firms. The first area is billing for library staff time. Although this is a trend that began decades ago, many firms still ignore this opportunity, perhaps because the fees generated by library staff are insignificant compared with those of other timekeepers. Using this rationale, however, there would be no reason to bother with quantity discounts or any number of other practices that save the firm “only” a few dollars. And billing expectations are likely to dramatically increase the number of hours recorded. There is another reason to encourage billing by library staff: Failing to do so provides attorneys with an opportunity to hide some of the expenses associated with specific client projects, thus understating the overall cost of the work and overstating the profit. The second area is online search charges. Most firms attempt to recover some or all of the expenses charged by Lexis, Westlaw, and other vendors; the revenue generated should appear in the library budget as a reduction to the cost of providing content. In the minority are those firms that have decided to treat the cost of providing information services as overhead. In these firms, electronic resources are treated just like books, and the cost is accounted for in timekeepers’ hourly rates. INFORMATION BENEFITS Calculating the costs of providing information services is only the first step. The next challenge is to answer these questions: What is the firm getting for its money, and is it worth the price? These are fair questions for management to ask of any department or business unit. Library managers who provide answers, complete with the data needed to justify costs, may find that their operations are more readily funded. A variety of benefits may be realized from the library’s resources, products, and services. For example, providing links to carefully selected Web sites on practice group portions of the intranet saves attorneys time when searching for information; subscribing to the right mix of resources allows researchers to find the information they need to produce a first-rate product; assigning marketing research to library staff instead of attorneys decreases the overall cost of acquiring new clients. But simply asserting that the library benefits the firm, without supporting facts or figures, may not be enough to justify a funding request. Library managers need to prove a positive return on the firm’s investment. Return on investment (ROI) can be defined as the benefit from a resource, product, or service minus its cost. For example, if using an online database saves an attorney one hour of time, the ROI is one hour times the attorney’s hourly rate minus the cost of providing and using the database. Calculating ROI in a library is not easy, which explains why it is not often done. But there are ways to collect data that can be used to justify the library’s costs. Carefully worded surveys can be distributed to ascertain, for example, the amount of time attorneys saved by using a particular resource or by delegating work to a reference librarian. Even better, this information can be collected at the time the activity occurred by presenting the attorney with a brief form to complete. (A form attached to reference results works well and is also a good method for soliciting feedback.) Librarians can also interview their users, asking pointed questions (How much time do you save by using this resource? How much longer would it have taken if we did not own this resource?). In these days of limited resources, it is not enough to present management with the costs of running the library, assuming that they will support the operation because it has value. Rather, library managers must be prepared to explain what is involved in running a library system that meets the firm’s information needs. Managers must also be prepared to show how the library’s resources, products, and services enhance the firm’s bottom line. Joan L. Axelroth is president of Axelroth & Associates, a Silver Spring, Md., information and library management consulting firm serving law firms and businesses around the country. She may be reached at [email protected].

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