For the past few years LexisNexis has been taking an increasingly combative stance in contract negotiations with their customers by tying a growing number of products together. It is a rather sad commentary that Lexis appears to  view their flagship legal research product Lexis Advance as a sinking ship which must be held afloat by their other product lines — mostly products which Lexis did not develop but acquired over the past few years. Are Lex Machina, Law 360, Ravel and Intelligize really  commercial pontoons keeping Lexis Advance afloat?  Perhaps most troubling is that Lexis Nexis  has a virtual monopoly on legal news. They have acquired this dominance through acquisition of Law 360 and through  exclusive sales alliances with American lawyer, New York Times and the Wall Street Journal.   This means that no law firm can purchase a corporate license for the Wall Street Journal without a subscription to Lexis Advance. This means that no ALM 200 law firm can get  access to the numerous  ALM news sources including the American Lawyer magazine, and such iconic local legal news sources as the New York Law Journal unless they purchase Lexis Advance.  Ironically the very law firms who help ALM create one of its most valuable offerings: the ALM 100 and ALM 200 rankings are not able to get access to the surveys unless they subscribe to… drum roll please…. Lexis Advance!

The Law Librarians Revolt  Today The American Association of Law Libraries *  sent a “cease and desist” letter to Mike Walsh, CEO of Lexis Nexis objecting to the Lexis bundling of unrelated  products. This practice has the effect of requiring law firms to purchase products which they don’t need or don’t want in order to be able to purchase products they do want.  It should be a surprise to no one that since 2007, law firms have been trying to operate with “flat budgets.” During this same period exciting new specialty products have emerged incorporating AI and analytics. Lexis Nexis owns some of these great new products. Instead of letting their customers select a curated mix of products based on their needs – LexisNexis has engaged in increasing “desperate”  tying tactics. They finally “pushed the product bundling envelope” too far into anti-trust territory. In addition to the legal issues raised by their practices, it’s just plain bad business.    And it  also appears to be a public admission that Lexis Advance can’t compete in the legal research market as a stand alone offering. (* I am a member of the AALL Board and participated in the decision to take action against LexisNexis.)

 

Restricting Access to Books – The Last Straw

Earlier this year LexisNexis added a new and egregious twist to their contract negotiations. If you don’t have a Lexis Advance contract you can’t purchase LexisNexis/ Matthew Bender books. This was the last straw for law library directors who have to manage budgets and need to be able to select the right mix of products to support many practice groups.. Budgets be damned!… Lexis wants to dictate not negotiate. Complaints to the American Association of Law Libraries Committee on Relations with Information Vendors (CRIV) skyrocketed.  Let’s consider the irony here. LexisNexis is admitting that their classic treatises such as Colliers on Bankruptcy and Chisum on Patents are more valuable to their customers than all of LexisNexis. Lexis  the true pioneer of online legal research — which beat the then dominant West Publishing into the full text online legal research market  in the 1970’s- is now clinging to their treatises to keep their online product alive. Does this signal anything other than pure desperation on Lexis’ part?

Market Dominance – The Legal Test

One of the legal tests for anti-trust claims is to examine the share of the market. While it is true that there are competitors to some of the Matthew Bender treatises, I took a look at some citation history last week. If there is no reasonable substitute and I would argue that for at least two of their treatises – there is no reasonable substitute – then they exercising unfair market dominance in requiring customers to purchase Lexis Advance in order to purchase key legal treatises.

Federal Court Citations to  Collier on Bankrupcty:

  • Collier on Bankruptcy (Lexis Nexis)  – cited in 3,860 cases
  • Ginsberg & Martin on Bankruptcy (Wolters Kluwer)  – 7 cases
  • Norton Bankruptcy Law & Practice  (Thomson Reuters) – cited in 141 cases

Federal Court Citations to Chisum on Patents 

  • Chisum  on Patents (Lexis Nexis) cited in 999 cases
  • Harmon on Patents ( Bloomberg) cited in  133 cases

When Lexis says  that “Chisum on Patents is recognized as the leading authority on U.S. patent law.” as they do in promotional materials  this is not mere puffery. The citation counts above suggest that a lawyer really could not practice bankruptcy or patent law effectively without  access to Colliers or Chisum. So I can’t help but wonder aloud if the iconic status of these two treatises might provide the stake that can be driven into the heart of the new  Lexis “strong arm” strategy.

Here is the AALL Briefing to members:

LETTER TO LEXISNEXIS

 

Today, in response to member concerns James P. Fieweger, partner at Michael Best and Friedrich LLP, sent a letter on behalf of AALL to LexisNexis CEO Mike Walsh requesting the company “cease its recently enacted policy of tying access to its electronic and print publication products to the purchase of a license to its Lexis Advance search product.”

 

The letter states that:

 

. . . [i]t is evident that LexisNexis has elected to leverage the demand for certain products and publications to extract purchases of its Advance search product. Such conduct is anticompetitive and likely prohibited by law. Equally as important to AALL, this new policy is detrimental to its members and the law firms they serve.

 

It also has put LexisNexis at odds with standards AALL has promulgated for its members and publishing professionals. The AALL Guide to Fair Business Practices for Legal Publishers describes standards for the business practices of publishers that most directly affect librarians and other legal information consumers. . . .

 

SITUATIONAL BACKGROUND

AALL’s Committee on Relations with Information Vendors (CRIV), in partnership with the Executive Board, has been working to address this issue since 2017. CRIV has received a number of requests for advocacy from members after their attempts to address the LexisNexis sales policy directly were not resolved. In response, CRIV representatives attempted to engage in a dialogue with LexisNexis representatives throughout 2017 and early 2018, which failed to get a response to questions regarding the new policy. In April 2018, CRIV requested action from the AALL Executive Board, and the issue was discussed in the executive session. In that session, a group of board members were assigned to gather information and facts regarding the CRIV request. In an effort to remedy the situation, the Executive Board elected to retain counsel.

 

SUPPORT FOR VENDOR RELATIONS

New editions of the AALL Guide to Fair Business Practices for Legal Publishers and the AALL Principles & Practices for Licensing Electronic Resources are now available on AALLNET. These publications offer guidance and best practices for legal publishers in providing services and products to law librarians, attorneys, and other legal information consumers. This includes fair business practices regarding: communications, disclosure policies, sales policies, customer service, product quality, and licensing agreements. Additionally, CRIV accepts requests for assistance from members with questions or concerns regarding a particular publisher.