Jordan Furlong brings up an interesting insight in his recent post, “Law firm of the 21st Century.” He notes “the company that used to sell lawyers their textbooks and caselaw databases is now, in effect, competing with them in the delivery of legal services.” He’s referring in large part to the recent acquisition of Pangea3 by Thomson Reuters (TR). I think he is sounding the right alarm bell here. I’ve been surprised we haven’t seen more of an out-cry over this. Maybe that is yet to come.
- As posted on 3 Geeks, TR is cutting services to large firms. Laying off the people who sell and service law firms indicates, at a minimum, a shift away from them.
- Last year I had to remind a consultant connected to TR that we were their client, not the companies we represent. I had seen too many reports, articles and comments from consultants on how clients can cut their legal fees using AFAs. In fact, I am still waiting for consultants to approach firms on how to deal with AFAs. Instead these consultants are going around firms, represent clients’ interests against them.
- In October TR acquired Serengeti. This is a matter management and e-billing tool for clients. I repeat – this tool is for clients not law firms. It serves as “a system that helps in-house counsel control legal spending.” Or in other words, cut law firm revenues.
- This month, TR buys Pangea3 which sells legal services to clients in direct competition with law firms. Over 90% of the press I have seen on LPOs shows them selling to clients – not law firms. I understand some law firms are hesitant to be public about using LPOs, but either way, clients are the buyers right now. The best example is clients using LPOs for first review in discovery. Although this saves clients money – this also is work that used to go to law firms. In this instance, TR has completely crossed the line into competing with their customers.
Now – do I understand why TR is doing this? I understand there is money to be made. However, I also understand whose market they are taking.