Jan
4
Practice Makes Research Perfect
Filed Under B2B, Blog, Financial services, Industry Analysis, internet, Publishing, Reed Elsevier, Search, Thomson, Uncategorized, Workflow | 1 Comment
Don’t you love the way that financial analysts run for the cover of the Big Generalization? So Thomson Reuters buying PLC (Practical Law Company) on 3 January is Consolidation. Big getting Bigger. More market share. Problems of law markets in the recession years need to be addressed by bigger content units. Simples? No, not at all. And this form of analysis entirely misses the point. Why did Thomson Reuters need to buy PLC now? Where does it place them in the evolving story of professional services? And what does this acquisition do to their existing services and their positioning in the place where there is growth – small and medium size law practices? In fact, what is this story which may be superficially easy to categorize but actually tells us a very great deal about what is happening to networked services in the professional sphere of activity.
I have written about this in several pieces in the last 3 months (“Beware: Lawyers at Work”, 4 November 2012 and “The Way Lawyers Work Now”, 13 September 2012). I have tried to underline there that this is not a new process. Robert Dow and Chris Millerchip, who founded PLC, left Slaughter and May to do so in 1990. As I recall the story, their very first impetus was to start a magazine which would advise lawyers on practical processing issues in dispatching routine legal matters, and only later did they turn to devising and implementing those pieces of process – precedents, practice notes, checklists, document templates etc – which would dig down deep in key sectors like commercial, corporate, employment, intellectual property, competition or finance law. They now have what the press release describes as a “comprehensive suite” and they do this in the US as well as in the UK. They are universally respected, used by 96% of the UK’s top law firms and 80% of the AmLaw 200, yet at around £50 m in revenue in 2011, surprizingly small. However, they are exceeding profitable, running subscription services which few ever leave (they become part of the way your law firm works), and often quoted as running ebitda returns in the high 30% range. Estimates of their sale price this week were around £300m, arguing 12X a forward ebitda of £25 m. We shall never know, but even these estimates indicate a very valuable company that Reed Elsevier’s Lexis and Thomson Reuter’s Westlaw have sought to buy for years. But they would never pay the founder’s idea of a full price. So why Thomson Reuters and why now?
I have tried to indicate in those previous pieces that Publishers (aka Butterworth or Sweet and Maxwell in 1990) would not have seen what PLC do as publishing”. And, from the 1970s onwards, big law publishing had invested in the world of Research (which in lawyer terms mean that they were mostly concerned with litigation, always a bigger game in the Us than in the UK). As a result Westlaw and Lexis dominated law library budgets in major law firms globally, but their revenue base was very dependent upon a small base of litigators, and the ability of their costs to be charged through the system to the ultimate client. However, the practise of law is not mostly like that, but rather more like the patient game of form completion and document filing where PLC sought to introduce productivity game. It took a global recession but now the big law publishers get it too. The impressive attempts by Lexis in London to build practice tools and sell more use of research through them bear witness to that: strategy turns through 180 degrees when we realise that we are not in business to simply support and then replace the library, but that we are there to handle the whole business of the law office. This is about productivity gain, better decision-making and cheaper and more effective compliance, this “business of law” thing, and if we can do it for lawyers we can do it for any professionals. As the largest player in Law as Research, Thomson Reuters were the most vulnerable player as the market began to move towards these Business of Law considerations.
But, just a minute, a lot of those future customers in the law office context will not be lawyers. Even lawyers, as polled by Lexis in the UK, see the majority of routine work getting parcelled out to legal services and paralegal services players, both onshore and offshore. And there will also be Expert systems doing some of this work. Law offices will get smaller and more expert, and sell on their expertise alongside and within the workflow that they place with contractors. But how do you ensure quality results – unless the outsourcers use standard precedents and proven workflow modelling from verifiable sources. And what happens when these tools reach medium and smaller practices: quality gets improved and cost competition grows. It is not hard to see the law office and the corporate law/counsel office of the future. It runs on the network, uses work processed by a variety of hands in different places, employs standardized and compliance-approved workflow tools allows users to collaborate in alerting each other to threats or reversals (in the Courts) which may inhibit the utility of some of those processes. Thomson Reuters just joined this world, and not a moment too soon. Some of their thinking and some Lexis minds were there already. But now it is official: Business of Law is the Future of Law.
Two points remain to be made. We have to recall that Messrs Dow and Millerchip left Slaughter and May where they had been working lawyers in search of efficiencies. In other words, they were not the editorial/academic lawyers normally employed by publishers. This says something about the sort of people Thomson Reuters and Lexis will need to employ to get this huge transition right. Then again, one major player is yet to shift. Bloomberg is a private company and what it does is its own business, yet the maintenance of the infant Bloomerg Law separate from Bloomberg BNA is an enigma, as is the apparent indifference in the 12 months since the BNA acquisition towards global markets or these Business of Law issues. Perhaps having to have everything on the Bloomberg box, rather than in cloud/network configuration, has something to do with it. As it is , in contrast to Thomson Reuters and Lexis, Bloomberg’s offering looks a bit off the pace of change. Enough reason, perhaps, for Thomson Reuters to buy PLC in the first place?
Thomson Reuters Press Release: http://www.prnewswire.co.uk/news-releases/thomson-reuters-to-acquire-practical-law-company-185535352.html
Dec
28
Scraps and Jottings
Filed Under B2B, Blog, eBook, Education, Industry Analysis, internet, mobile content, Publishing, social media, STM, Workflow | 1 Comment
We had a wonderful Christmas, thanks, – and I hope that you, Dear Reader, did likewise. Immediately afterwards (dawn on Boxing Day) we departed for Nova Scotia to bring greetings to my Canadian mother-in-law – and drove into a violent snowstorm on the Halifax-Lunenburg road which completely wiped my mental tapes of what I was going to do by way of a year end communication. I only recall that I had promised one reader that I would try not to be so apocalyptic in 2013. Well, here then is a first attempt at a lulling, measured message to that individual: “Have no fears for the future – the disruptions that you might have countered are now fully in play, and the only thing we now await is the full effect!”
As I dashed from the Hut on Boxing Day, I picked up two clippings that curiously underline this theme. The first, and Cureus (pronounced Curious) is its name, refers to the announcement of a new Open Source medical journal launched by a Stanford neurosurgeon (http://scopeblog.stanford.edu/2012/12/19). We could, if we wished, take Cureus as an example of the imminent demise of journal publishing in the sciences. Dr John Adler, its progenitor, appears to have at least two issues with current publishing procedures. On the one hand he complains that research results need to be made available immediately: “allowing researchers to publish their findings at no cost within days, rather than the months or even years that it typically takes for research to be made public”. And on the other hand he is an opponent of traditional peer review who wants to crowd source opinion on an article from both expert and non-expert readers. “Nowadays you wouldn’t go to a restaurant without Yelping it first. You wouldn’t go to see a movie without seeing what Rotten Tomatoes had to say about it. But medical journals are stuck in this 200-year-old paradigm.”
So in fact the delightful thing about Cureus is that it ignores both Open Access as practised by PloS and by commercial publishers, or even by the technical evaluation favoured by PloS One, and demands a further level of democratization of access at the same time. “The average Joe has little or no access to the medical literature today. Its a right. Its a human right”. This would delight the early Open Access campaigners in the US, but the crowd source idea is more valuable than the access by non-academic users. We now have a raft of innovations, some of them going back to the Dotcom Boom, which, if fully applied to current publishing processes, would have a hugely disruptive effect. Are we looking at a time when both conventional Journal publishing and newly “conventional” Open Access publishing are both overtaken by the delayed “boomerang” effect of network publishing procedures now taken for granted elsewhere?
I have the same reaction to a wonderful piece by Bill Rosenblatt, a doyen of internet rights commentators, in a piece on 15 December 2012 (http://paidcontent.org/2012/12/15). Entitled “The Right to Re-Sell: A ticking Time Bomb over Digital Goods”, Bill makes two critical points that will be very important on the 2013 agenda. In the first instance, most music and eBook products are now sold without DRM. DRM files were hated by users and arguably created more customer services issues than they were worth. So while legal embargoes on resale or re-use remain in everyone’s licences, the physical barrier has largely disappeared. File transfer between friends – “I’ll loan you that book when I have finished it” – is allegedly commonplace, though I have seen few attempts at quantification. Bill doesn’t offer any, since he has bigger game in his sights. He has been looking at ReDigi (www.redigi.com), a music resale service. This includes a forward – and – delete function so that the company can protect itself against the whole idea that it is a front for IP theft , but could well become the Chegg of the music industry.
Bill’s other issues concern ORI (the Owners Rights Initiative grouping) whose membership brings libraries and resellers together in unholy alliance to lobby for protection against litigious publishers under the slogan “You bought it, You own it”. (http://www.prnewswire.com/news-releases/you-bought-it-you-own-it-owners-rights-initiative-launches-to-protect-consumers-rights-175435921.html) And here lies the fundamental point that I distil from Bill’s piece. As we moved into the networked world we never resolved the fundamental issue about intellectual property ownership. After 500 years of print reproduction, we thought that we could still own the the content and control its re-use. And we are still trying to do that in a network of users who adhere to a completely different view of ownership. They think that a digital object is synonymous with a physical one, and having successfully ignored or evaded the law in the real world of real objects, they will be able to do exactly the same in the virtual world.
Meanwhile, the current world of digital offers just about every variant on lending and resale rights that one might possibly imagine. And the belwether world of journal publishing illustrates yet further variation on the theme of open network publishing. For publishers and those who aspire to recreate publishing, the key remains how you add value to processes that were once your sole domain, but which now can be performed anywhere by anyone with network access. The key to 2013 remains as it has for the last 20 years: understand how users want to behave in the network, and get there before demand chrysalises with appropriate value adding proposals that they will want to pay for. Next year, as in all those years “just publishing” will not be enough.
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