SLA 2007: Strategic Budgeting: educating your management, own your own numbers

Linda Will and LaJean Humphries jumped off from Linda Will's article in Legal Information Alert from a few years ago to create a comprehensive and detailed session on budgeting in law firm libraries.

Handouts, including a budget worksheet are on the Legal Division website. See link below.

Basically: document everything, educate management

Law firm libraries are basically fourth after office space, insurance, associate salaries in cost to a law firm. It is important to understand where libraries fall in the grand scheme of profits per partner.

Ken Svengalis has already done a lot of the work for you in his Legal Information Buyer's Guide from Rhode Island Press. He has information about costs of basic resources by practice areas.

Tracking
Marketing library services creates a natural rise in the number of requests. When you note what new resources will be needed also say how you will offset costs. Management tools such as West Research Partner and OneLog give you the information you need to make decisions about content. Not only do these systems allow you to bill clients, but they allow you to more accurately see what files are being searched. This gives you leverage in cancelling materials.

Your ILS should be able to print out usage reports. Include information in your ILS about why resource/book/item was purchased, who requested it and what the cost was. This is institutional memory.

LMA - help you know what the costs for materials are. They prevent surprises. These are evolving.

Firms and vendors have analysts crunching numbers behind the scenes. Realize that vendors have budgets and quotas as well.

Feit/Nuzzo - may contact partners/ management and offer to save them money. Linda's inside counsel decided that it would break NDA to work with them on LexisNexis/Westlaw contracts, but gave them other tasks like UPS accounts where they saved significant amounts.

Outsourcing - most firms aren't going to outsource their research, because they like their librarians, they appreciate the librarians knowing what they want and how they like it presented. It is an issue we need to be aware of, however.

Competitive Intelligence

If firm isn't doing it, the librarians need to work with marketing to do it, because it will enable firm to be more competitive in getting new clients.

Slice out costs for C.I. and point them out in budget.

Get someone to tell you (Marketing, Accounting??) when library research helped win a client.

Vendor Reps

Job is evolving.

Provides one point of contact. This is good, because rep understands librarian's personality, firm personality and culture. Some companies are allowing one rep to service an entire firm regardless of location, which provides even better customer service.

Linda would like them to do more 'consulting' with regard to budgeting in terms of warning us about new products, services so that we can budget for them in advance.

LaJean Humphries

She thinks of strategic budgeting as a cohesive, long term plan. In the dictionary, however strategic has many meanings associated with war. Budeting in a law firm is kind of like a war.

Strategy vs. Tactics
-long term vs. short term
-big picture vs. local
-forest vs. details - trees

You won't win every battle. It may take 2-3 budget cycles to get something accepted, so connect your activities to your firm's goals.

Practical Tips for Creating your Budget
-provide a summary
-state your assumptions, e.g. firm is expecting to hire 10 new attorneys in new year; online services contract will cost 15% more in new year. Make sure your boss knows what is getting you to the numbers that are in your budget.
-create a line item for things that don't exist. This will allow you to answer 'yes' when your boss asks you if the new thing you want is in your budget.
-auto date/time stamp all versions of your budget. If the CFO frequently asks for revisions near the deadline, you will know you are handing in the most recent.
-keep track of your own expenditures.

Management Tools
-Cost Recovery Manager (or similar) - this is a tool that allows librarian to see what resources people are using so that you can accurately design contracts that work for your firm
--improves bill back
--provides usage reports
--improves contract management

-Develop your toolkit
--cheatsheets (e.g. how to do a ratio, how to figure out a percentage)
--calculator

Library Staff
-Improve continuing education opportunities - CE is a srategic necessity, because the profession is changing so quickly.
--regional and local
--at least 1/hour per day

-Professional dues
--save cost in reduced price of conferences

-Fight for salaries
--participate in salary surveys
--share survey information with CFO

Other
Advantages of electronic information
-Time: everyone gets the information at the same time
-Space: requires no shelf space
-Cost: equivalent to adequate print copies (adequate means enough copies to get information to people at the appropriate time)
-Currency: more current than mailed print copies

You need to know:
-firm's business
-know trends
-know costs
-know contracts - couch the changes in terms that CFOs can understand (e.g. if there is an increase in a contract, fiure out the per attorney cost, such as "this is an increase of $1/attorney, which is less than a 1% increase)
-know users

Create a spreadsheet of 50-100 titles. Choose the titles that are most heavily used and/or most expensive from each practice area. You consider using the most expensive, beause they make a big impact.

Vendors won't always say if there is another installation for the same product in your firm, so try to get all electronic resource purchases to go through the library manager. This allows you to budget adequately and negotiate discounts on multiple purchases.

clipped from www.slalegal.org Strategic Budgeting: Educate Your Management and Own Your Numbers Linda Will, Dorsey & Whitney Presentation LaJean Humphries, Schwabe Williamson & Wyatt Presentation Worksheets How can you work to minimize yearly budget cuts? How can you get new money for resources your users need? By proactively educating your management, one day at a time! Hear how two law firm librarians practice the art of strategic budgeting and ensure the success of their firms. There will be plenty of time for audience discussion and problem-solving.