Years ago I was introduced to the concept of the Virtuous Circle at a meeting with Brian Hall, the first post-Merger CEO of ThomsonWest. In Hall’s presentation, “The Virtuous Circle” was  all about  what I would call the “karma of client relations.”  Treating  your customers fairly  will create loyal customers who will spend ever more money and help you to develop better products which deliver ever  more value to your customers who will then pay more money…..

The Virtuous Circle in Legal Publishing

According to the Legal Information Buyers Guide and Reference Manual,  between 1995 (the year before the Thomson acquisition)  and 2008 West’s print prices increased 232%. During that same period Lexis/Matthew Bender print prices increased a mere 70%.

The unprecedented and inexplicable print price increases were the overwhelming factor cited in defining the Thomson-West merger as the “worst legal publishing merger.” It is hard to understand how anyone at West could “square” the post-merger print  pricing strategy with Hall’s vision of the Virtuous Circle.

  Qualities of the bad legal publishing mergers:
  • Dramatic price increases (West, Aspen, Dialog)
  • Failure to integrate the products (CCH – both aspen & Loislaw)
  • Eliminating pay as you go option / change in pricing structure (GSI, Losilaw)
  • Loss of customer focus 
  • Loss of client loyalty 
  • Decline in quality 
  • Loss of competition (West)
  • Destruction of a great product (GSI) 
  • Decline in usability (GSI)  
  • Strict focus on profits

Is the Thomson West Merger Also a Metaphor for Something Else?

There was an under current of “longing for things past” in the comments submitted by readers. Criticisms of the Thomson-West deal decried the changing culture of the legal publishing industry and emergence of new market forces. Loss of old and familiar brands, endless growth and globalization, decreased focus on personal relationships, increased emphasis on profits…. Sound familiar? These comments describe not only changes in the legal publishing industry but also echo the changes we have experienced in the law firms where many of us work.

 West Publishing as a Fading Landmark. West’s history also represents a significant chapter in the evolution of American law. West was a uniquely American company which developed a taxonomy and classification system for weaving together the complex tapestry that is American caselaw. The West Brothers were “American originals.” As  the Wright Brothers were unschooled in engineering, but conquered flight. the West Brothers were not lawyers but enterprising stationery salesmen who virtually invented a uniquely American process of legal research.

The history of West Publishing which used the now somewhat ironic slogan – “Forever Associated with the Practice of Law” is all but obliterated from the Thomson Reuters’ company timeline. There are only 3 major events noted : 1872, the founding of West Publishing; 1996, the acquisition by Thomson and 2010 the release of WestlawNext. There is no narrative reflecting the deep impact West had on the development of American legal research analysis and practice.

You will on the other hand learn riveting  trivia: In 1851 Paul Julius Reuter arrived in London from Aachen Germany where he developed a news business “leveraging” the a fleet of 200 carrier pigeons as part of it’s information dissemination platform. He soon began integrating the emerging telegraph technology and coined the motto “follow the cable” which has presumably now been updated to “follow the money.”

It is noted that the use of emerging technology “helped Reuter establish an enviable reputation for speed accuracy, integrity and impartiality.”

Gee sounds like it could have described West Publishing to me, but there isn’t a hint of what West represented to the legal profession in America to be found in the Thomson Reuters timeline. A more enthusiastic history of the company was published by a small Minnesota newspaper… Westlaw Rises to Legal Publishing Fame by Selling Free Information

Thomson West Marked The End of Competition. Really?
The Thomson West deal, has not prevented new entrants to the market. Innovative new products keep emerging: Law 360, Intelligize, Mergermarket,  and  Fastcase demonstrate that there is still a healthy environment for competition. Who would have expected a major new player Bloomberg Law to break into a head to head competition with Lexis and Westlaw in this mature online research market? See also, Greg Lambert’s 3 Geeks and a Law blog Could Thomson Reuters be in Trouble? and consider if we may see a divesiture of West by ThomsonReuters and the possible market impact.

Would the Old West Have Thrived in the 21st Century?
I suspect not. In the early 1990’s a very senior West executive commented to me that he didn’t think that lawyers would ever want to have  personal computers at home. This struck me as strangely disconnected from emerging trends. Young lawyers had carried laptops to class, law firms were experimenting with flexible work schedules, and then there was the ever present pressure of the billable hour. I give the West executives credit – they understood that the economics of their industry was changing, they would need capital infusion to improve their infrastructure to remain competitive. Had West not been purchased by Thomson we might have seen the company targeted by a Godon Gekko and sold off in parts.  Innovation is expensive. A walk around the exhibit hall this summer at AALL revealed how few legal publishers were up to the task of developing eBooks, only the “big players” Lexis and Westlaw had taken on the eBook challenge.

As  a “rising tide raises all boats,”  we were the indirect beneficiaries of the advances in legal research technology which drive the marketplace of innovation. Advanced  technologies hold the promise of continuing to offer efficiencies for the practice and business of law. Information professionals will continue to play an important role in introducing and managing these innovations. Mergers are painful affairs, products have a life cycle and sometimes they die. The legal information marketplace will continue to be shaped by   the polar forces of  “information that wants to be free” and technological innovation that comes at a cost.

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