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Firms are now scrambling to cut costs of online resources by either cutting subscriptions, or going back to models requiring that online resource tools only be used when that cost can be passed through to the client. With firms now considering alternative fee arrangements with clients, the model of passing online research costs to clients will come under even more scrutiny.

Alternative fee agreements and the general move away from the generic hourly-billing rate will mean that firms will need to have a different negotiating strategy with the online legal research vendor. No longer will online research be seen as a pass-through cost to the client. Because the client will not be paying the attorney by the hour, they will not buy the idea that online charges are saving them money because it saves the attorney time. Clients will say that firms will need to bear the burden of the online research because, if it truly saves them time, then that means they should be able to spend less time on the client’s matter, thus the savings is really a benefit to the firm.

Those 30% profit margins are not sustainable as alternative fees become a larger percentage of how law firms generate revenue.