1/19/12

TR Legal to End Pay-As-You-Go


A trustworthy source has informed me that TR Legal is no longer offering pay-as-you-go plans to mid-and large-sized firms. My guess is they are trying to motivate firms to subscribe to their service by contract, thereby guaranteeing a revenue stream for a fixed period of time. However, this is an extremely short-sighted move. As more firms move to a single provider model, it seems to me that the company on the losing end of that process would want to use any means at their disposal to keep a toe-hold in the firm. Remaining competitive requires that you expose as many people as possible to your product. Taking that option away effectively removes your company from competing on a go-forward basis. Those firms that chose other providers will lose any knowledge they have of your product over the length of the contract. In fact, it will result in a segment within the firm that has no history with your product. The end will result will be that contracts lost will not be likely to change providers at the end of the contract.
So what does this all mean? It means that either the market will be divided into those TR Legal and everyone else, with very little opportunity for TR to grow its market share in this space. I guess the folks in Dayton and Manhattan are thanking TR for doing them a favor. But it also means something else that disturbs me even more: TR Legal is blowing a huge raspberry to customers everywhere by showing how little they value their desire to provide TR Legal's resources in a manner of their choosing.

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13 comments:

KenHirsh said...

Seems that TR would rather follow the business models of Verizon and big banks than those of its competitors.

Anonymous said...

LexisNexis blew that same raspberry last year when they made the same move, and I thought the same thing then.

Anonymous said...

As mentioned, Lexis did this in 2011. Also, it has rankled me for years that you are disallowed from buying a Factiva account or Wall Street Journal site license without having a Lexis contract. Seems like an illegal tying arrangement.....

Anonymous said...

TR's main legal competitor did away with access via credit card last April.
TR is maintaining its credit card access.

Anonymous said...

And don't you love the way whenever they do something like this they make it sound like they are doing you a favor, saying that it's less attractive for customers so won't be allowed. Let customers decide what's attractive, not the company.

Michael Ginsborg said...

TR Legal probably expects to make (much) more profit than it loses by ending pay-as-you-go. Switching costs to customers make it likely that enough will accept the new contracts, with add-on subscriptions that bring not just "guaranteed revenue," but even more revenue - and profit - than losses from customers willing to switch another provider. Moreover, TR Legal occupies almost 40% of the legal publishing market in the U.S., and another duopolist in this specific online market(LexisNexis appears to have already implemented the practice in question - arguably a form "of signaling" to TR Legal. Under these circumstances, the chance of increased profits for TR Legal appears to more than balance its risk of losses.

Anonymous said...

This is a great move for new competitors. TR and LN are both losing market share. Time to cut the cord. I am getting better at free legal research and use TLO.com for public records. Each search is only 25 cents and does not require any monthly commitments.

Anonymous said...

This is truly a first in the market. Lexis merely raised the cost of transactional access - they did not remove the option or require subscription to certain menus as part of that option. Plus, I don't know anyone getting "better support" from TR these days.

Jill said...

I agree with Mark, this move is short-sighted for any vendor. Why on earth would you want to bar past or potential customers from seeing your product? If they chose your competitor, how are you going to tempt them back if your last contact with them was essentially, "don't let the door hit you on the rear on the way out?" This is hardly taking the high road.

No matter how "positive" the TR letter tries to frame this decision, it is NOT for the benefit of the customer. In this age of clients refusing to pay for online research, we have to work harder than ever to justify these expenses to our firm leaders and external clients.

The customer wants CHOICES and FLEXIBILITY. We want to pay only for content we really need and will use. We DO NOT want to be bullied into subscribing to a larger block of unnecessary content. We know what our end-users want so please don't try to make those decisions for us.

We understand that the C-level execs at these companies want to increase shareholder value but you aren't going to get there by shutting out past or potential customers. I spent several years as a sales manager at a national trade publisher so I get the need to increase sales. However, my experience was that I could best do this by building positive relationships with my customers and understanding their needs, not by trying to sell them titles they didn't want.

There are many factors that go into a decision about purchasing content - price, quality, usability, available training and support. Yet having a positive relationship with a vendor, feeling that they are truly being responsive to your needs and concerns and not just out to grab all the money they can get is also important. Given the increased competition out there, it is distressing to see less and less of a focus on this from so many vendors.

Anonymous said...

Is the letter shown in the post really a year old? It's dated January 13, 2011. Or is it just symptomatic of the drop in quality and general sloppiness we're now used to experiencing from TR?

Anonymous said...

There is another side to this story. Many, many large law firms use the "pay as you go" option as a means of delaying contract renegotiation -- oftentimes for a year or more. Instead of renegotiating at the end of their multi-year contract, firm administrators often choose to delay the renewal and renegotiation process (and forthcoming price increase) by invoking a month-to-month option.
While I can completely appreciate frustration with legal publishing's duopoly, TR's move in this situation is really no different than cell phone companies, car leases, satellite radio and various other subscription services that require long-term contracts.

Anonymous said...

Mr. Knedsen needs to take a course in literacy, I think

sridhar said...

there will be many who disagree to this. but doing this TR legal will be well profited. thanks for this update.

 

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