When Dewey & LeBouef filed for Chapter 11 protection, the firm listed the unsecured creditors, and three of the biggest losers on the list were Thomson Reuters (owed $2.3 million), LexisNexis (owed $1.4 million.), and CCH (owed $650K.)

Although the total amount of legal research to debt is something like 1.7% of the total, it still shows the amount of money that firms pay year in and year out for legal research products. I hadn’t thought about the fact that Westlaw/Lexis/CCH, etc. contracts are unsecured debts before, but I guess there’s not really a lot that Wexis can get from the firms they serve to secure the services they provide.

Does the exposure of this information give us any “insider” information on Dewey’s existing contracts with their legal vendors? Could we make some broad assumptions and say that if we calculate out the remaining amount owed by the number of months left in the year, does this come out to mean that Dewey was paying $3.45 million a year for Westlaw (or roughly $260 per month per lawyer… assuming 1100 lawyers)?? Let’s keep on making these “very assumptive” mathematical calculations:

Lexis — $2.1 million annual – $175 per month per lawyer
CCH — $975,000 – $74 per month per lawyer

In an industry where we are always trying to figure out where we are on our contracts versus our peers, there could be some interesting information coming out in the Dewey bankruptcy. Perhaps those Competitive Intelligence experts could find some even more interesting tidbits.

[NOTE: My friend Don Cruse reminded me that “rest of the year” payments would be avoided in bankruptcy, so my calculations are most likely inaccurate. If Dewey just owes, say the five months of this year, then the totals for subscription costs would jump up about 38% higher than these numbers. Of course, I haven’t seen anything specific, so this is just me applying assumptions to come up with these amounts!! – GL (added @11:47 AM]

Image [cc] HorsePunchKid

[Guest Post from Jason Wilson, VP at Jones McClure Publishing, and blogger at rethinck.]

On her blog, Dewey B. Strategic, Jean O’Grady took direct aim at large legal publishers—Thomson Reuters, Reed Elsevier, Bloomberg, and Wolters Kluwer—and urged them to customize their database offerings at the practice-group level rather than taking a firm-wide approach to content access. She cautions that the approach—trying to be all things to all practice groups—will only lead to misery. To survive the “sole provider wars,” she says one must be willing to be flexible.

I understand her point, but it isn’t modern. Flexibility isn’t where data is headed, whether you’re a large legal publisher or a small one. Flexibility is actually just another word for siloed data.

Think of Harry Potter and the Chamber of Secrets compared to the universe of Harry Potter writings, including fan fiction), and data isn’t supposed to be siloed any longer. All of the current thinking about the matter suggests so.

Think of Jeff Jonas’ “data finds the data” line? Siloed data makes discoverability too difficult, and we (legal researchers) don’t like difficult.

Think of WestlawNext as an example. The whole point to the system is to pour everything into one container so you can find it all; no assumption can be made that any one thing will answer your question, so the system must search it all and show it to you.

In fact, the publishers can argue that they themselves don’t know the relevancy of all data within their possession, so it only seems logical to display it all, with facets, of course, and excellent algorithms to parse the data. Lexis is headed in this direction as well, although taking an entirely different approach with HPCC. I can’t say that Bloomberg or Wolters Kluwer is, but they may be.

But let’s draw this down a bit and focus on analytical content, which is what I think O’Grady’s post was driving at.

“There are lawyers who conjure apocalyptic consequences at the thought of losing their favorite resource. I suspect that this is generational characteristic.
Older lawyers who started out conducting legal research in print treatises and then moved online tend to have a stronger sense of a legal publisher’s brand and the reputation of specific products which I don’t see in the post-Google generation of lawyers.”

Her observation here, I think, is meant to scare publishers into customization. A sort of, “hey, if you think your analytical brand is sacred, think again, because the post-Google generation doesn’t care.” But if this is what she means to do, I think it misses the mark.

Legal publishing is counting on the post-Google generation of lawyers to free the market place of selling individual titles, jurisdictional packages, product groups, and the like. The lawyers aren’t after Chisum on Patents. They’re after “the answer,” which in their world can only come from everything (or at least a lot of different resources). Large legal publishing is moving in the direction of becoming the Comcasts, U-Verses, and Direct TVs of the world. You will be offered packages of programming, which will include things you watch and things you don’t (how else to do you fund indie titles?).

You will choose a sole provider, and it may be by region or firm size, but it will happen because the differentiator will be what I call “The Triple A’s”:

  • the applications
  • the algorithms, and 
  • the answer

That’s how legal publishing is going to compete for the next decade or so, because right now, there are no Hulus, Netflixes, or Google TVs that are capable of competing with them. There are no alternative channels, unless you actually start talking about how the small legal publishers (the Ganns, James Publishings, Jones McClures, and the like) do compete, and how firms should utilize them.

I look at the web now, and all the interests divvying up the properties and not letting anyone else in: Apple, Google, Amazon, Facebook, Twitter, to name a few. These aren’t companies who want to share, or if they do, it will be on their terms and the price will be steep. There is no reason to think the legal publishing market will be any different.  And why should it be? If Thomson Reuters believes it can build a better sandbox for you to play in, then it will take the risk because the upside is enormous. And it did. The post-Google generation seems to agree with the decision as well. Whether they are willing to pay for it post-graduation is, however,  a different question.

All of this sounds bad for the consumer, but I would actually argue that it isn’t, at least if it is implemented properly. Flattening analytical content and charging a single monthly or yearly rate will actually be better for the consumer in a few important ways. First, you’ll be exposed to more content and more possible answers to your questions than if you were buying by the slice. The system is designed to avoid your ignorance of sources. Sure, you may be really smart and know which one you want, but not everyone is you, and in O’Grady’s post-Google generation scenario, the lawyers don’t know or don’t care to. Second, publishers will recognize that “data” means up-to-date data, and editorial processes will evolve to make sure the content is accurate at the time you look at it. Print titles and most electronic titles don’t reflect this temporal correctness now, but they will, and it will be more than colored flags or stop signs by cases; it will be an accurate answer. Finally, publishers will recognize that a key feature of digital content is the ability to add material because there are no longer restrictions—what we used to call book bindings and PPI (pages per inch)—to limit growth of the content. And we can do this without an additional cost to the end user. Everything is geared toward more and better answers, which is really just a way of saying we want to make you feel smarter, sooner.

I wish I had a suggestion for how you might approach the future, but I don’t. The next three years are going to be ugly, particularly as large legal publishing tries to figure out how to satisfy you and the great unwashed (i.e., non-legal) masses. But that’s a subject for another post.

I’ve been thinking all day about what the Bloomberg acquisition of BNA will eventually mean in the legal publishing world. I first thought of what it would mean to Westlaw and Lexis, and whether Bloomberg Law would now truly bring some competition to the duopoly we’ve all come to accept (and loathe.) However, what really kept popping into my mind was another vendor, CCH… actually CCH’s parent, Wolters Kluwer. In a way, Bloomberg is becoming what CCH “should have become” years ago but never got its act together to be a true competitor. Wolter Kluwer had all the pieces to be competitive, but persisted in the business model of being a holding company for all of these pieces rather than integrating them into a single platform. Sure, the whole IntelliConnect platform was supposed to work toward integration, but it never really recovered after its initial stumbling out of the gate (although, they have given a lot of effort to rectify that blunder over the past couple of years.)

With Bloomberg now having all cases/statutes/regs plus Dockets, a citator system, and now quality secondary resources, it “should” become a major player in the market. Whether or not it can break into that market is still yet to be determined. WestlawNext and Lexis Advance are still relatively new products, and the whole WestlawNext launch fiasco is finally seeming to settle down (although statistics on the adoption of WLN by current Westlaw subscribers is still a little iffy, in my opinion.)

The biggest mistake that Bloomberg can make right now is assuming that they can be competitive simply because they are not Westlaw or Lexis. They bombed at that approach with the whole BLAW launch a few years ago (along with that awful interface.) Bloomberg better come in with some serious pricing deals for firms willing to take them on. Bloomberg needs to get “in the door” of these firms and be on the desktop, laptop, and or iPadtop of attorneys, paralegals and librarians. Right now, Bloomberg needs to learn to speak the language of those in charge of buying law firm research products… “price sells!”

The second biggest mistake that Bloomberg could make is screwing with existing BNA contracts and access points. If they want to see customers bolt for BNA’s competitors, simply tell them that they’ll have to move off of the current platform and onto Bloomberg’s black-and-orange platform. Now is the time to lure customers into the whole Bloomberg Law platform (now improved with BNA!!) It is not the time to bring in ultimatums of move over or lose access.

Although many of us are sad to see an employee-owned organization like BNA go away and merge into the one-employee owned Bloomberg product, I think this may eventually fill all those empty spots that Bloomberg currently has in content, and even make the BNA materials better over time. At least we can be happy that Thomson Reuters or Reed Elsevier didn’t get their hands on BNA.

After a little thinking, I think this acquisition will turn out okay and will finally give Wexis some real competition in the legal publishing and financial news market. I’ve been harping that Bloomberg was too narrowly focused (mainly at big law firms in Manhattan). Now, they step out of NYC and try to take over the (legal publishing) world!

We mentioned last week that Thomson Reuters Legal is going to double-down its efforts to sell its products to the one- to three-attorney law firms. From some of the people I’ve talked to, it appears that the majority of these efforts are going to take place through an increase in phone sales focused on these attorneys. So that headline that popped up on the Twin Cities Business website that lead with 60 Eagan, Minnesota jobs going away, but followed up with

“On the flip side, the Eagan campus plans to add an unspecified number of customer-facing sales and marketing positions in order [to] put more of a focus on a growing clientele – one- to three-attorney law firms.” 

I guess “customer-facing” was more figurative than literal in this case.

I know how much we all love sales calls, so I thought I’d point out a few things that my solo and small firm friends might want to do before they head out for the Thanksgiving weekend.

Do Not Call List
Most of the companies you’ll deal with should comply with national Do-Not-Call (DNC) requirements and honor opt-out requests through that service. To add your name to the national DNC list, you may register at www.donotcall.gov. Check with your local state to see if it has also created DNC lists for their residents.

Company Privacy Statements
If you wish to be removed from specific company direct sales lists, you should check out the privacy pages that most (if not all) of the legal publishers post on their websites. I have to give some recognition to LexisNexis for having a very straight-forward opt-out page that isn’t hidden like some of the other publishers seemed to have done. Here is a list of the privacy/opt-out pages that I could find:

Westlaw Online Privacy Policy
LexisNexis Direct Marketing Services Opt-Out
Aspen Publishers Internet Privacy Policy (w/Opt-Out) [note: I did not find one that covered all of Wolters Kluwer Publishers]

Personal Relationships Trump Phone Sales
The key message that I want to spread here is that most of us are turned off by phone sales. Most of the folks I’ve talked to really like dealing with their local representatives (even if we don’t agree with how they are pressured by the regional, national or international managers they work for.) We would much rather sit down with them and go over the new or existing products that may help us in our work. I didn’t talk to a single person that said that they would prefer having direct marketing via phone sales over their local representative. Well… I did have a couple mention that they know the area codes that these calls come in from, and tend to ignore those calls.

We may poke fun at the vendors, but don’t think that a faceless voice on a phone is going to be a better option when it comes to sales and building relationships with your customers.

Well, we weren’t the only ones having some April Fool’s Day fun yesterday.  In fact, there was so much tomfoolery going around that no one could tell what was real and what was a joke.  I’m really hoping that the iPad/Donkey Kong console is true!!  That’s a much better use of an iPad than reading boring US Supreme Court cases on it.  Here are a few of our favorite April Fool’s Day posts from some of the legal bloggers we follow:

We had a couple other ideas on a good April Fool’s Day post (anyone remember last year’s where we posted that all attorneys at a BigLaw firm were getting Kindles preloaded with case law and statutes?)  One idea I had was to say that the Texas Board of Education was setting standards for legal publishing in Texas, and would be removing any decisions written by Justices Marshall and Brennan along with ‘select’ other major decisions, however Bush v. Gore would still be included.

The other thought was that we were entertaining the offer to sell the blog to WestlawNext and would only be available through the “Used to be Free Blogs” Database at $3400.00 an hour.  But that LexisNexis, Bloomberg and Wolters Kluwer were making counteroffers and it was becoming a bidding war on who would buy-out the 3 Geeks.  Actually, if anyone at WestlawNext, LexisNexis, Bloomberg or Wolters Kluwer is reading this…  think about it (we still all want to retire to some small Caribbean island… see #10 of my 2010 projections.)  We decided not to run with that story since the “we’ve been bought by Google” was making its rounds about the blogosphere yesterday, so we thought it had been overdone.

Now it’s Good Friday and some of us have to ask for forgiveness for our Thursday follies.  For all those partners at a Houston firm that saw my post yesterday about SCOTUS adopting iPad formatting (and buying it hook, line and sinker…  I’m sorry.)  For those single attorneys that were really hoping that AVVO Singles was finally your path to true happiness…  well… I’m sorry… but for a completely different reason.

For all of you poor souls that have to work today (myself included), I’ll be doing a live Webinar/Podcast later today with some other poor law librarians that also didn’t get the day off.  We’ll cover how budget cuts are impacting law school’s ability to teach and train students legal research skills and what that means for those baby lawyers that are coming your way.

Until then…  I’m going to go order this…