The Lexis-Westlaw Duopoly

The Political Economy of Legal Research

The use of Lexis/WestLaw produces platform-specific human capital. By using a particular platform, a user becomes habituated to and proficient with that platform, the benefits of which cannot be recovered on alternative platforms. To the extent that platform-specific human capital has been vested, Lexis/Westlaw can extract rents from their users; as long as the monopoly-rent tax is less than the costs of rebuilding platform-specific human capital for another platform, the user will remain loyal and pay the tax.

A side effect of the duopoly model is that Lexis and Westlaw share an incentive to differentiate their platforms. If they had identical interfaces, then habituated users could costlessly change systems, and market competition would preclude the extraction of monopoly rents. This dynamic can be observed in the functionally equivalent but symbolically differentiated search terms implemented by Lexis and Westlaw.

A less obvious implication is that Lexis/Westlaw have a standalone incentive to complicate their platforms. The more complicated a platform, the more platform-specific human capital can be invested, and correspondingly the higher the monopoly tax that can be imposed. This hypothesis is confirmed by a passing glance at the staggering turmoil of clutter that suffices as the Lexis/Westlaw interfaces (relative to Precydent's parsimony). This is a systemic problem related to that plaguing the "Blue Book"--that is, the editors are incentivized to repeatedly deliver arbitrary changes in new editions so that lawyers and legal scholars are forced to purchase the newest copy.

The effectiveness of a distribution system can be measured by its cost. The ineffectiveness of the old-world music distribution system was illustrated by the share of its revenues that went to feeding the distribution system, rather than the content-production system. The same can be said of Lexis and Westlaw--In 2005, Lexis managed revenues of $8.94 billion with a 23.1% profit margin. Lexis's corporate parent, Elsevier, spent [$12.5 million between 1998 and 2006 lobbying the U.S. Congress.

The Role of The Law School

During my first semester at Columbia Law School, my Legal Practice Workshop instructor required his students to register with the Westlaw legal research system and submit all graded work via [[lawschool.westlaw.com][TWEN], Westlaw's proprietary online courseware. Since registering on LexisNexis 13 months ago as part of my Legal Research Workshop, I have received 56 emails from Lexis--just shy of one email per week. These emails offer me "Lexis Points" in exchange for using their service--not for schoolwork, but for playing around on an arbitrary legal-research task or tutorial.

The purpose and effect of Westlaw's TWEN services and Lexis's bribes, of course, are to habituate me to working on their respective research platform. By participating in such policies, Columbia is complicit in the services' later abuse of their graduate's platform-specific human capital. There are decent commercial alternatives? to Lexis/Westlaw, as well as irreproachable free efforts, but Columbia ignores them. Columbia's legal-research curriculum ensures that Lexis/Westlaw can tax Columbia graduates.

Law as Intellectual Property

The corrupt circumstance enabling the existence of the Lexis/Westlaw duopoly is that the law isn't free. The free PDFs provided by federal courts do not have the metaoperability that makes Lexis/Westlaw cases that much more functional. The free PDFs provided by state courts--oops, well, actually, many state courts don't even provide free electronic versions of judicial opinions. In these ubiquitous cases, the law--the system of norms enforced by state violence--is constructive proprietary information, guarded and sold by Lexis/Westlaw.

It would be argued that law has expressive, aesthetic content and is thus deserving of copyright. By virtue of the fact that some judges, as composers of legal materials, [[cite]evidently believe this, there is some truth to the argument. But it is an unfortunate attitude, and it has deleterious effects on the quality of the fruits of legal enterprise. Law should be conceived as software code rather than poetry, written by legislators, compiled by the executive, and debugged by the courts. This metaphor offers hints as to how problems with the legislative versus executive versus judicial process should be dealt with. For example, as illustrated in [[cite][Anarchism Triumphant], anarchical production of software code is a superior strategy, and it should be applied to the production of legislation. The [[cite][GPLv3 process] is a preliminary example of an anarchical legal drafting process.

When law is proprietized, an obvious concern would be manipulation of the law by its private owners for their personal benefit. It would be rational, supposing low probability of the infraction being publicized, for Elsevier/Thomson to tamper with case law concerning company litigation. In a competitive legal-information marketplace, objectivity would be an overriding concern, because competitors would publicize infractions and keep each database honest. But here, we have duopoly, and that invites collusion. There has been little, if any, investigation into whether Thomson and Elsevier have attempted such manipulation. An investigation into whether cases in which Elsevier/Thomson (and subsidiaries) are parties are characterized by statistical differences in the database's meta-information is in order. What we do know, in the meantime, is that Elsevier has, at least once, manipulated a scientific medical publication for economic reasons.

The problems with Lexis and Westlaw are representative of the more general problems associated with the proprietization of functional knowledge. Bergstrom (2001) showed that nonprofit economics journals were generally superior to commercial economics journals, despite the fact that similar commercial journals charged almost ten times as much for subscriptions to their journals.

The Free Alternative

The social benefits of a free alternative to Lexis/Westlaw are incalculable. A free legal research platform might consist of a public database of legal materials maintained by the nation's largest law schools. The meta-information linking cases will be a continual project undertaken by law professors and their students.

The people behind FastCase estimate that scanning and transcribing every federal and state case and statute will cost them $6 million. Apart from the unionized-labor complication, the top ten Ivy League schools could easily fund a similar open-source effort.

Law journals should be the first organizations to sign onto the free-law effort. Since they are locked in libraries and . On the one hand, this circumstance protects them from being widely read and thereby condemned for incompetence. But, as demonstrated in Chris Anderson's The Long Tail, there is demand, however small, for a virtually infinite range of creative and functional content (pg. ). By unlocking the storage and meta-connection of law journal articles, the free-law effort would facilitate the synthesis of wider blocks of information and argument.

An alternative to a centralized free-law resource would be instead a uniform system of citation, pagination, and meta-data standards for legal materials that could be implemented on a wide range of information-hosting platforms.

A free legal wiki would separate content from presentation, allowing users and groups to customize the presentation of information to meet particular goals and circumstances. The free platform can parrot the presentation systems of Lexis and Westlaw, allowing previously habituated users to recover the benefits of their platform-specific capital without paying the monopoly rents exacted by proprietary systems.

A not insignificant objection to this is that, as a product of unpaid altruists, it would not be as reliable as Lexis/WestLaw. This is possible, but at the very least it will be a decent alternative for those who cannot afford or who are politically opposed to Lexis/Westlaw. Besides, the science journal Nature found that the facts presented in Wikipedia are just as reliable as those written in Encyclopedia Britannica.

Another objection to the free platform is that private actors would manipulate the meta-information to sabotage opposing legal actions. Wikipedia, again, is a testament to the growth of internal safeguards against abuses.