Checklist for the Negotiation of Digital Subscriptions – Budget Control and Risk Management Strategies

Published on 2023-06-06 byJean O'Grady

Even lawyers who have been the most ardent print advocates have loosened their grip on their favorite treatises and deskbooks. The pandemic-enforced remote work environment drove most print holdouts to online resources. In 2023 many law firm libraries are completely digital while others have shifted significant amounts of their budgets from print to digital.

Although the large enterprise platforms such as Lexis, Westlaw and Bloomberg Law represent a significant portion of most budgets, library directors and knowledge managers also manage dozens and sometimes hundreds of other digital licenses. There has been a proliferation of specialty products targeting specific practice areas or workflows from topics as diverse as credit default swaps, social media monitoring, and predictive litigation analytics. The acquisition and management of these specialty products involves a different kind of licensing analysis, even though many issues may be similar to the large platform licensing issues.

If you are new to the world of digital resource licensing, this checklist will highlight some of the key issues to address when reviewing a license. The first thing you need to understand is that most license agreements are one-sided in favor of the vendor. All the liabilities and risks are on the purchaser. That is why it is so important for you to understand the risks and opportunities associated with digital licensing.

The ground rules. If you are new to your organization, there are several issues that should be addressed in advance. Identify the standard practices and procedures in your firm for procurement, contract review, and security review.

Work with your procurement team. If your firm has a procurement team, you should still be involved in the licensing process. The procurement team needs to understand how the product will be used and who will need to have access. If there is no procurement team, there may be a designated contract attorney who reviews the contracts for the law firm. Develop a collaborative relationship with those professionals. They can be important allies in the process.

Security. Determine if your firm has a specific security review process for vendors. Security compliance can be a complete deal killer. Many firms now require vendors to answer security compliance questionnaires and to disclose their security standards in advance of any trial or contract. Security issues should be addressed in advance of the licensing process. Confirm that the vendor is willing to provide security documentation.

Common Licensing Issues. Below are a sampling of licensing issues that should be considered for all types of digital licenses but are particularly important when assessing a niche product with a limited license.

Ask to see the license. I'm not kidding: some vendors will simply provide an order form which explains nothing about the rights responsibilities and risks. The license itself may be incorporated by reference but lives on the vendor’s website. So in the event you do sign a license it is important to print out the version of the license on the website as it existed at the time you signed it. It can be changed during the course of your subscription.

One year or multi-year? Vendors often provide financial incentives like discounts as an incentive to sign a long-term contract. However, there are certain factors that may suggest that a short- term contract is better for the firm. A short-term contract is a good option when you are trying out a product for the first time, when the product supports a practice area that is shrinking, when you want to consider moving to a competitor product, or when there has been a steep price increase.

Product downtime. The license should address the possibility that the product may become unavailable for periods of time. There should be a clear statement of the amount of  “down time” the vendor has to restore access before penalties are triggered. The license should spell out the type of redress available to the subscriber. Ideally a subscriber should get compensation or a pro-rated cost reduction in the event the product is available for a prolonged period of time.

Is the vendor responsible for notifying you of problems? Over the years I have witnessed a variety of both technical and content quality issues occurring in high ticket products. The license should spell out the vendor’s responsibility for notifying and curing problems.

Password management vs. IP authenticaion. In a large law firm, managing passwords can be an administrative nightmare. It is preferable for the vendor to allow for IP authentication or the use of SAML type technology to minimize the headache of individual password management. Tools such as Onelog and Research Monitor can also enforce compliance with licensing restrictions.

Cancellation/Autorenewal. Many vendors require advanced written notification of the subscriber’s intent to cancel a product. In muliti-year contracts, there may be an annual window for cancellation, or it may only occur in the final renewal year. In either case, it is important to set up a “tickler” system to track the renewal and cancellation windows. Cancellation windows are normally 30, 60, or 90 days before the end of the contract. Realistically the due diligence assessment should begin at least 6 months before the end of the contract. This additional time provides a window for surveying users regarding the cancellation and possible transition to a new product.

Usage Statistics. While many firms have tools that provide some level of analytics on product use, vendors often have more granular data on how a product is being used in your organization. If a vendor is willing to provide usage data, spell out the type of data you need and schedule for the delivery of usage data.

Enterprise license vs limited license. Enterprise licenses offer several advantages, but they are almost always significantly more expensive than a limited license. You simply need to do the math and assess the risks. Enterprise licenses limit the risks of unauthorized sharing within the organization because access is granted to the whole organization.

Limited licenses can save money but require a thorough understanding of the workflow needs of the users. Limited licenses can apply to a handful of users, a practice group or an office location. Some vendors offer pricing tiers requiring that a minimum number of licenses be purchased. Limited licenses can also be purchased at the practice group or office level, but it is important to understand whether lawyers outside the designated practice group or office need access to the resource. If multiple practice groups or offices need access you may be better off with an enterprise license which significantly reduces the risk of license violations.

Authorized users. It is important to understand who is defined as an authorized user under both enterprise and limited licenses. Try to negotiate for the definition that fits your firm’s workflow needs.  Make sure that the contract does not limit access to attorneys. Many business professionals including paralegals, secretaries, researchers, marketing, and knowledge teams may also need to have access to the resource in order to support the attorney’s work.

Notice of Violation. Subscribers should not be held liable for misuse of the product if they have acted in good faith to comply with the license. Vendor must notify subscribers promptly of any suspected misuse.

An opportunity to cure misbehavior. Some contracts call for a termination and forfeiture of the subscription cost in the event of unauthorized use. Subscribers should be given a reasonable amount of time to investigate and cure suspected problems. There are risks of password sharing when lawyers are given individual passwords. Technically a secretary using a password on behalf of an authorized user could result in termination if the contract does not permit such delegated use.

Copyright. The license should not restrict the rights of authorized users under copyright law including fair use. The license should not restrict the use of public domain content.

Integration of RSS feeds into aggregation platforms. Aggregation platforms help mitigate information overload by consolidating updates from all of a lawyer’s subscriptions into a single news update. Make sure the license will allow you to send RSS feeds to an aggregation platform for redistribution to authorized users.


Ongoing Training and Mitigation of Risk

The combination of a well negotiated license and appropriate technology can be used to protect the firms investment in digital resources and mitigate risks of misuse. There is sometimes a false assumption made that lawyers graduate from law school with an understanding of the copyright and licensing risks associated with the use of digital resources. In fact, library staff who spend hours reviewing research contracts often have more Library directors should include compliance notices on the firm's intranet and include compliance training as a standard part of associate and business professional onboarding.



About the ExpertView Profile
Jean O'Grady

Jean O'Grady

LTH Expert Venable LLP

Jean P. O’Grady has over 30 years of experience developing strategic information initiatives for Am Law 100 law firms. She holds a J.D. from Fordham University School of Law, an M.L.S. from St. John’s University and a B.A. in History from Fordham University. She is a member of the NY State Bar.

She is also a columnist at Above the Law and a panelist on Bob Ambrogi’s weekly  Legal Tech Journalist’s Roundtable.

Jean was the 2013-14 Chair of the Private Law Libraries Section of the American Association of Law Libraries and a past President of the Law Library Association of Greater New York. She is an incoming Board Member of the American Association of Law Libraries ( 2017- 2019). Board Member, New York Law Institute (2015-2018.)

She is a frequent author and speaker on the transformation of libraries and information centers, digital contract licensing , knowledge management, and the legal publishing industry. She has spoken at programs sponsored by the Information Industry Association, the Association of Newsletter Publishers, Practicing Law Institute, International Legal Technology Association , West Publishing, Price Waterhouse, LegalTech, Lexis-Nexis. Janders Dean Knowledge Management Conference, American Association of Law Schools. as well as AALL, Canadian Association of Law Libraries, Australian Law Libraries Association and the Special Libraries Association.

In 2011 she launched her blog “Dewey B Strategic” to promote awareness of the strategic importance of librarians, libraries and knowledge managers as change agents and innovators in the organizations they support. She has written provocative pieces on a variety of law firm management, publishing and technology issues which have sparked important debates in the industry. Jean started writing a regular blog for Legaltech Hub, Jean O'Grady for LTH, in 2022.

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