The Lexis/Westlaw Duopoly and the Proprietization of Legal Research

The Political Economy of Legal Research

LexisNexis and Westlaw share duopolistic control of the U.S. market for legal information. Lexis/Westlaw's stranglehold on legal information is founded on the unfortunate circumstance that American law is not freely and publicly available. U.S. courts charge 8 cents per page. Some state courts offer recent opinions, but older precedents are mostly unavailable. Statutes and regulatory orders are generally available online, but even these sources are relatively difficult to access, and they do not have the meta-operability offered by Lexis/Westlaw. To varying degrees, then, the law is virtually proprietized, sold at a profit by Lexis/Westlaw.

Of course, Lexis/Westlaw don't legally own the law. Statutes, regulations, and opinions are produced by agents of the democratic government and enter immediately into the public domain, regardless of public availability. The value added by Lexis/Westlaw is research efficiency--an electronic search of an online database is infinitely cheaper than scouring filing cabinets at a courthouse or library. The Lexis/Westlaw duopoly does not face a serious rival entrant because the costs of building a minimally comparable database from scratch present a prohibitive barrier to entry. At the same time, digital databases operate at increasing returns to scale, so the existing incumbents can easily underprice rival entrants and put them out of business.

The Lexis/Westlaw duopoly's proprietary internment of legal information imposes grave social costs. From the standpoint of political theory, American citizens do not have public access to the laws that are supposed to be influencing their behavior and for which violation could mean punishment by the state. The costs of civil litigation are distorted upward, precluding the pursuit of socially optimal lawsuits. When a wide income gap separates the parties to a dispute, the wealthier party has a superior research advantage. Most ironically, courts must pay Lexis/Westlaw for access to the fruits of their own labor--and the American taxpayer foots the bill.

For the individual researcher, the use of Lexis/WestLaw produces platform-specific human capital (analogous to firm-specific human capital). By using a particular research 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. With attorney wages what they are, a 10 or 20 percent cut in research efficiency will deter most from moving to a different platform. The platform-specific investment also discourages users of the existing platforms from investing in free alternatives.

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 extracted. This hypothesis is confirmed by a passing glance at the staggering turmoils of clutter that suffice as the Lexis/Westlaw interfaces (Cf. Precydent's parsimonious appearance). This is a systemic problem related to that plaguing the "Blue Book," in which managers are incentivized to repeatedly deliver arbitrary changes so that lawyers and legal scholars are forced to purchase new editions.

--+++ Columbia's Complicity

During my first semester at Columbia Law School, my Legal Practice Workshop instructor required his students to register with Westlaw and submit all graded work via [[lawschool.westlaw.com][TWEN], Westlaw's proprietary online courseware. Since registering on Lexis 13 months ago as part of my Legal Research course, I have received 56 emails from Lexis--about one 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 law graduate's platform-specific human capital. There are decent commercial alternatives? to Lexis/Westlaw, as well as irreproachable free services, but Columbia's legal-research curriculum ignores them. Meanwhile, Columbia pairs this indirect subsidy with payment for academic use of the services.

The Free Alternative

The defining feature of the contemporary legal-research market is that its product, legal information, is a zero-marginal-cost digital good. Digital goods are characterized by two unique properties, according to Eben Moglen: 1) functional digital goods are most efficiently produced anarchically, while 2) non-functional digital goods are most efficiently distributed anarchically. Whether legal information is functional or non-functional--and whether "functional" and "non-functional" are coherent and mutually exclusive categories--is an interesting question for a later day. In the present context, though, it is a reasonable expectation that both properties would be extant for legal information.

The practical implication is the deproprietization of all legal information, its

The social benefits of a free alternative to Lexis/Westlaw are incalculable. Because the benefits of such a free platform would be widely distributed across society, it would be ideal if the project was government-funded. But such a course of action faces serious obstacles, not least of which is Lexis/Westlaw's lobbying efforts. It would be more feasible, I think, to establish the free legal-research database as an independent nonprofit in the tradition of Wikipedia. Funding would be provided mainly by leading law schools, supplemented by donations from cooperative law firms. The people behind FastCase scanned and transcribed every federal and state case and statute $7 million. The top ten Ivy League schools could easily fund a similar public-domain effort. Alternatively, the law-school coalition could pay Lexis/Westlaw/FastCase to release documents into the public domain. This might be more feasible than one would expect, because whoever does it first will make some money while remaining players will be out of business.

The free legal-research platform requires two centralized structural components: 1) a central catalog , and 2) a uniform citation protocol. The catalog will be a centralized record of every document in the database enabling searches of the database. A centralized catalog does not require a single centralized server for all information, but rather enables the opposite. Legal information can be stored and distributed anarchically via all the world's networks, with the centralized catalog keeping track of where the information resides.

The uniform citation protocol will be a rationalized system of citing and finding legal documents, with authorial attribution, time of publication, etc., plus a digital code that allows instant access to the document from the free platform's search interface.

Apart from the catalog and citation, other aspects of the platform can be decentralized and customized anarchically. For starters, the search interface will be decoupled from the database searched, with the interface freely customizable. Users and groups will be able to release custom interface packages that meet particular objectives and circumstances. Interface packages mimicking the Lexis/Westlaw interfaces will become popular, because they allow previously habituated users to recover the benefits of their platform-specific human capital--without paying the proprietary services' monopoly rents.

Meanwhile, the meta-information linking legal materials will be continuously updated by law professors and their students. This will initially be an anarchical project, with gradually greater structure and restrictions built in as existing materials are exhaustively annotated. _Nature_'s finding that Wikipedia is just as reliable as the Encyclopedia Britannica suggests that the free legal-research platform can be as reliable as Lexis/Westlaw. With so many smart people using the database, abuses and manipulations can be cleared up quickly and the perpetrators exiled. In the long run, it is inevitable that the free platform would become superior to Lexis/Westlaw in both usefulness and usability.