17 Aug 2023

Legal Tech ROI: The Stats are In for Small to Midsize Law Firms Making a Big Purchase

Summary:

In today’s fast-paced legal landscape, purchasing the right legal research technology is critical – especially for solo and small to midsize law firms who have the opportunity to reap benefits that help them outpace larger competition. For example, Lexis+® boasts benefits such as powerful AI features, efficiency gains, happier clients, more clients, and — ultimately — higher profits. 

Of course, legal research technology can require a significant investment, and it tends to become more costly as the content and features improve — after all, you generally can expect to get what you pay for. For an attorney on a budget, the cost of Lexis+ might raise valid questions about ROI. You might fear making the wrong choice and overspending. On the other hand, opting for a free tool might backfire as well, slowing you down and stalling your firm’s growth.

LexisNexis® aimed to get to the bottom of ROI questions through a commissioned 2023 Total Economic Impact™ study conducted by Forrester Consulting, which sought to understand exactly if and how benefits of Lexis+ outweighed the investment.

So, what’s the verdict? Is purchasing Lexis+ worth it?

Forrester Consulting conducted extensive interviews on LexisNexis users at firms with less than 40 attorneys, and the results are substantial:

Investing in Lexis+ produced a 246% risk-adjusted ROI in a span of 3 years.

In the following sections, we’ll discuss exactly how interviewed firms realized a considerable ROI using Lexis+, which we believe will ultimately help you to make the best purchasing decision for your firm.

Study Methodology

Forrester constructed a Total Economic Impact™ (TEI) framework to identify costs, benefits, flexibility, and risk factors associated with using LexisNexis.

  • What is a Total Economic Impact Framework (TEI)? Coined by Forrester, the TEI framework is a multi-step methodology that allows Forrester to fully analyze the economic impact an investment has on an organization.

The TEI framework was driven in part by interviews with four legal representatives from small to midsize firms across the U.S. with experience using LexisNexis. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite firm with the following characteristics:

  • Has strong litigation and commercial law practice
  • Appears in federal and state courts
  • Has an operating profit margin of 40%
  • Has 31 LexisNexis users
Interviewee Information
Role Legal Focus Region LexisNexis Users
Paralegal Business Law Midwest US 39
Managing Partner Insurance and Civil Litigation South US 12
Managing Partner Business Litigation Northeast US 11
Partner Defense and Civil Litigation Northeast US 25

The interviews and composite firm were used in addition to the following methods to determine a 3-year ROI, payback period, and associated benefits (all risk-adjusted):

  • Due Diligence: Forrester interviewed LexisNexis stakeholders and gathered data relevant to LexisNexis
  • Financial Model Framework: Forrester constructed a financial model representative of the interviews
  • Case Study: Forrester employed the four elements of the TEI methodology to provide a full picture of the LexisNexis total economic impact

The results? Attorneys reap significant benefits from LexisNexis; we discuss the details next.

Saving Money with Legal Technology

Attorneys named multiple benefits of using LexisNexis, citing improvements over the technology they used before switching to Lexis+.  Of the benefits, four could be quantifiably measured, amounting to a total 3-year benefits value of $953,283:

“ You have to identify the cases that are distinguished or overruled. Well, a tool in LexisNexis does everything for you. It will pull, download, and analyze cases at a high level. And once you’ve run the brief through, it will tell you if you’ve omitted portions of quotes. It will tell you if there are other cases that are similar that aren’t cited and might be overlooked. ”
— Managing Partner, Northeast US Law Firm

Efficiency Boost

3 Year Risk-Adjusted Efficiency Savings: $624,449
 
Interviewees reported LexisNexis tools helped them conduct research more efficiently, ultimately allowing them to transfer their saved time to other billable work. In the study, built-in and AI-backed features like Shepard’s® Citation Service were mentioned as time-savers, as well as the add-on product, Public Records. 

Eliminated Cost of Prior Legal Research Platform

3 Year Risk-Adjusted Eliminated Cost Savings: $272,445

Prior to switching to LexisNexis, the interviewees used a combination of fee-based platforms, free research services, and state databases. Interviewees reported problems with hidden fees and paying for content on an as-needed basis. With LexisNexis tools and services, users were able to eliminate the cost of less efficient and effective products, while consolidating all of their research needs into one platform

Increased Net Operating Profit from Reclaimed Complementary Work

  • 3 Year Risk-Adjusted Reclaimed Complementary Work Increased Net Profit: $29,531

LexisNexis users were able to reclaim work previously delegated to third-party agencies. Interviewees attributed this to the trustworthiness of LexisNexis legal content and P, noting that the information is always up to date.

For example, a firm that previously needed to serve a regular client by using practical guidance to help modify a legal agreement, as opposed to paying a third party to complete the request.

 Increased Net Operating Profit from New Clients Attributed to LexisNexis

  • 3 Year Risk-Adjusted Increased Net Profit from New Clients: $26,858

Interviewees reported adding new clients to their roster after switching to LexisNexis, with a managing partner at a Northeast US law firm  reporting that offered by LexisNexis allow them to Clients who were happier after the firm switched to LexisNexis then referred more clients, which increased the interviewed firms’ net operating profit.

More Benefits to Legal Tech

In addition to the quantifiable benefits listed above, also surfaced in the interviews:

  • Customer service and training
    • Firms mentioned having questions answered easily through 24/7 access to knowledgeable LexisNexis solution consultants
  • Transparent pricing
  • Access to state-level data
    • Interviewees reaped benefits from having state-level data on a single, trusted platform, reporting that they experienced increased data visibility and insights from LexisNexis
  • Extensive content
    • Beyond primary law, interviewees mentioned the benefits of having a vast amount of data from secondary sources and other authorities. According to the Forrester study, “Having access to this comprehensive content on a single platform allows users to aggregate, examine, and slice and dice useful data across many categories and practice areas.”
  • Intuitiveness and Ease of Use
    • Interviewees reported Lexis+ to be more user-friendly than other platforms, resulting in finding the answers they need faster
  • Help with Continuing Legal Education (CLE)
    • LexisNexis offers an array of CLEs through LexisNexis University, and interviewees reported the cost to be more reasonable than paying out-of-pocket

Forrester also measured “flexibility,” or the benefits a firm may more fully realize over time. Examples include LexisNexis staff operating as innovation partners alongside the firm and the fostered independence legal professionals gain when LexisNexis has all the information they need.

Saving Money with LexisNexis

The interviewees featured in the Forrester study paint a picture of independence, efficiency, and client-delighting speed. With total quantifiable benefits amounting to over $950,000 and unquantifiable benefits like state-level data and training making a day-to-day difference in workflow, the cost of LexisNexis was ultimately a wise investment – one that was paid back in 6 months, nonetheless. And as LexisNexis continues to incorporate advanced generative AI into its products, we expect this ROI to only grow.

If you’re not sure how to maximize your ROI with LexisNexis, we’re here to help. Contact us or try Lexis+ for yourself to see how much you stand to gain.

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