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
Nov
4
Beware: Lawyers at Work
Filed Under B2B, Big Data, Blog, eBook, Industry Analysis, internet, Reed Elsevier, Search, semantic web, social media, Uncategorized, Workflow | 3 Comments
Writing a piece here in September (The Way Lawyers Work Now) drove me back to the sustaining works of Richard Susskind: “The Future of Law” (1996), “Transforming the Law” (2000), and “The End of Lawyers?” (2008). They remain a most impressive achievement, and as well a rare effort to forecast the future of work in a particular vertical market sector. The trends that are apparent now align closely with the Susskind theses, especially in terms of the moves into practice solutioning, where Lexis now pursue PLC much more closely in the UK, with the benefit of being able to support their solutions by invoking the whole research environment as well. Whether these moves support ideas of the democritization of access to the law – Richard quotes Shaw’s dictum that “all professions are a conspiracy against the laity” – is not the question for this blog. However, they certainly deliver a vision of deskilling and cost erosion, and thoughts that many corporate and individual clients may in future have a very different procedural access to the law and its requirements.
I was encouraged in this thinking by discovering that Lexis UK last month published some of their own research survey findings, under the title “Practice Points”. This was a very worthwhile process, though not so that we could learn that 66% of respondents forecast 10% growth per annum over the next two years. With so many UK law practices currently debating their status after the last government’s liberalization measures, no one contemplating incorporation of floatation would say anything else. What impressed me more was the high score that lawyers gave to increased competition associated with the ABS (Alternative Business Structures) legislation, and the increase in M&A activity that this foretold. In order to hold costs and even reduce them (those surveyed saw fixed fee not hourly rates as the future business model) the gearing had to change – they needed to recruit more support staff who were not going to share profits or become partners. The way in which many would do this was by outsourcing to a fixed fee legal outsourcing company, often in the UK but sometimes offshore as well. And IT was the critical element – 60% looked to process automation to reduce costs and create the communications with clients and third party suppliers which will make this work.
This plays well with the line on practice solutions now being taken by Lexis and long held by PLC in the UK. PLC’s US expansion still appears on course, though moving more slowly in the recession. But I wondered about continental Europe, especially given the traditional positioning of German lawyers between clients, and provincial regulation, Federal law and EU requirements. Do not forget that both Thomson Reuters and Lexis, in various ways, quit this difficult marketplace in the last decade. So I was delighted at Frankfurt to find Christian Dirschl of Wolters Kluwer Germany on my panel, and to be able to ask him whether German law publishers were having to adjust their positioning and move towards new access models alongside their existing commitment to research tools. And, since I have always found WK Deutschland very difficult to understand as an outsider, since it has 8 constituent law companies and another four tax imprints, I was hugely impressed by the answer: WK Germany has fully embraced semantic technologies by launching the Jurion interface (www.jurion.de) to make much of its own and growing amounts of third party content accessible in a contextualizable environment.
There are a number of very striking points about Jurion. In the first instance WK have gone back and re-engineered their content acquisition, enrichment and bundling cycle. With their metadata ducks all in a row, and fundamental problems of delivery format and functionality solved, they have been able to invite third parties on to the platform to work through the same interface. So here you can get your Haufe content as well as your Lucterhand WK content, and if you are not a subscriber to the particular Haufe service, you can join up in 20 seconds. Then again they are members of the EU-supported LOD 2 project (http://lod2.eu), with 15 other companies in 12 countries. This lets Jurion swim in the world of EU Open Government (via the publicdata.eu platform), and provides not just another layer of content accessibility, but a context in which open source semantic technologies (DBpedia, Virtuoso, Sindice, Silk) can work jointly. Add to this rich stew a few more ingredients: their ability with semantic analysis and the LOD (linked open data) environments has propelled them into the development of major taxonomic instruments, with the legal thesauri now covering a large range of public/private content and WK becoming the effective gateway and standards setter for legal access. And then consider that at the same time they have integrated document construction and document location, using the same metadata. And then search all of this on legal terms and legal concepts. And then add, from the end of this year, web data as well as web content (look at the Wikipedia -style work accomplished here). Very impressive.
But what does it look like from the user screen? When I open my Jurion desktop I have options. jSearch is a normal law database environment with semantic search. jStore has the WK products, its partners’ products, fast purchase and – almost inevitably, a recommendation system which is likely to be very important. jLink will allow annotation sharing and thus becomes a gateway to social media. jBook allows personalization and rebundling of content – and you can have it as an eBook or print copy too. jCreate allows content creation, metadata allocation and sharing – via jStore for a fee if necessary. And jDesk, which subsumes the lawyers user desktop, giving him indexation, and coverage of the whole or parts of the firm’s network. Here clients have OCR, citation recognition, topic classification, and document creation. This is not yet fully completed, but remains a startling step forward. It potentially transforms the competitive structure of the German law and tax market, and it is based on vital ideas of collaboration which have to underlie all of these developments in future.
WK Germany have gone horizontal in their effort to supply the lawyer in Germany with a complete access point. Lexis in the UK have gone vertical in their bid for practice solutions. Both of these legitimate approaches will one day end in the same place, with comprehensive and collaborative service environments that eventually begin to democratize access to the law.
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