Friday, August 26, 2011

Bloomberg Gets BNA's Intellectual Capital in the Capitol!

The synergy Between Bloomberg and BNA
  • Both are non-public companies. 
  • Both rooted in journalism 
  • Both “Made in America”
A slight digression: The recent decades of consolidation in the legal publishing industry has resulted in the wholesale  expatriation of control of American’s primary legal research content. (Lexis, born in Ohio is owned by Anglo-Dutch company, Reed Elsevier; West Publishing, born in Minnesota was bought by the Canadian, Thomson Corporation and CCH, born in Illinois, is owned by Dutch, Wolters Kluwer). What surprised me more than the mergers themselves,  is the absence of outrage or even a lively discussion about the "expatriation of American law."   So I am saying it now. Finally a merger where the control of two American  born engines of legal research are staying onshore!

It Looks Like a Win - Win to Me

In short, Bloomberg needs BNA’s content and BNA needs Bloomberg’s technology, innovative spirit and "deep pockets."

 Bloomberg has only existed for 30 years and yet it is growing a media empire while the established icons of journalism are dead or dying. So will that same combination of determination, innovation and calculated risk allow them to succeed in the legal market? It is not an insignificant  factor that Bloomberg is a private company which  is free to experiment and innovate in ways which are reminiscent of a Silicon Valley start up.

Bloomberg Law and Bloomberg Government Expansion

Bloomberg’s acquisition of BNA makes sense for two separate market initiatives. Bloomberg Law had developed a solid product for primary law and dockets. Bloomberg has recently completed a re-audit and validation of their citator which will enhance it’s competitive standing, but it still lacked the secondary source treatises and commentary that lawyers rely on to flesh out their analysis of an issue.

Several years ago Bloomberg Law seemed to be indicating that they planned to develop newsletters to compete with BNA. While the newsletters that they were producing were popular with lawyers they simply didn’t replicate the depth of the BNA bench.  In recent years BNA had also expanded it's digital platform beyond newsletters and built out a number of resource centers. In a happy symmetry - while Bloomberg had been focused on building out practice areas with the tightest alignment to business (securities, corporate, finance, bankruptcy, Intellectual Property and litigation), BNA had been building resource centers for Employee Benefits, Labor, Intellectual Property, Environmental, Health and Professional Ethics. With the exception of IP, BNA brings a collection of digital libraries which Bloomberg had not yet begun to develop on BLaw.

Bloomberg had been tight lipped on product acquisitions but their executives and field staff were always listening for leads in the marketplace. The likely candidates for secondary materials included BNA, CCH, Law360, ALM’s Law Journal Press and Practical Law Company.

But the acquisition of BNA makes the most sense in light of the launch of the "other" Bloomberg product. With much less fanfare, Bloomberg has recently entered the government and regulatory space dominated by Congressional Quarterly by launching Bloomberg Government.  Just as Bloomberg Law integrates law with Bloomberg’s robust cache of business data, Bloomberg has built a platform which integrates business analytics with legislation and regulation. The breadth of intellectual capital from BNA’s legislative and regulatory “brain trust” can serve both Bloomberg products quite well.

BNA Needed to Reposition (C-Span vs. People Magazine)


BNA has remained the “A Student”  at the front of the class handing in sober and thorough “A+" assignments every day.  But were they positioned to appeal to the "Google generation?"

BNA was facing growing challenge from smaller niche publishers especially Law360 which has taken a “lighter” approach to monitoring legal developments and moving aggressively to poach BNA's market share. Law360 tends to provide shorter "snapshots" of legal issues  and perhaps talking a page from the American Lawyer, gives more attention to the personalities of the law. Each issue of a Law360 publication displays a prominent index to law firms mentioned (and what law firm doesn’t like publishers to act as its marketing arm?) They also offer  regular profiles and Q & A s with leading lawyers. Perhaps the focus on the personalities in the law explains its growth in a fairly mature market,  and one which was largely "owned" by BNA.

Was BNA Too Good at What it did to Survive?

Several years ago I was fortunate enough to have one of BNA’s top editors accept a lunch invitation to meet with my library staff and provide an overview of BNA’s editorial process. It was one of those events that forever changed my view of a publisher. In this case, it cemented my respect for BNA as not just another newsletter purveyor with fungible content which could easily be cranked out by a rival collector of regulatory documents. The range and depth of the BNA’s editorial team was astonishing. BNA has more reporters on Capitol Hill than the New York Times, The Washington Post and the Wall Street Journal combined. While a daily newspaper might assign a reporter to follow a proposed tax law for a current congress, BNA’s tax reporters would have been following the tax legislation for decades and could provide a perspective not only on the current proposal but on the history of similar proposals through prior congresses.

Reading vs Power browsing

A provocative discussion on the web’s impact on our brains can be found in the chapter entitled “The Juggler’s Brain” in Nicholas Carr's, The Shallows, which provides an ominous clue about BNA's dilemma. Our brains have become adapted for browsing rather than reading. Studies indicate that a "power browser" spends fewer than 30 seconds "reading" a web page. (So if you are still reading this post, "congratulations," you are still a reader!)

BNA is good, perhaps too good. BNA requires deep reading. If the younger generation of lawyers have developed "browsing brains" rather than "reading brains,"  BNA was likely to encounter an erosion in readership unless the company could make a radical reassessment of it's platform, editorial and delivery models. Bloomberg’s infrastructure, innovative technologies and ability to offer BNA an " outsider's perspective" may just help them make that transition.

BNA’s Intellectual Capital in the Capitol

The long term success of the BNA/Bloomberg deal may lie in Bloomberg’s ability to retain the BNA “brain trust.” Since BNA is an employee owned company, the acquisition may mean that the intellectual capital which has distinguished BNA from it’s rivals could make a hasty, bolt for the door.

Competition Is Good

Competition and innovation are good for the legal information marketplace. I hope this is a successful merger for all parties (including their customers).

Related Dewey B Story: Bloomberg Law Takes on the Titans: An interview with Lou Andreozzi, Chairman of Bloomberg Law

Friday, August 5, 2011

Both Sides Now: Advice on Redesigning Law Firm and In-House Strategy from Jim Jones and the Corporate Executive Board

Jim Jones’s (Hildebrandt Institute) PLL Summit presentation “State of the Legal Market 2011” outlined a series of factors which combined with the financial downturn created the “perfect storm” of disruption in the legal marketplace. The Corporate Executive Board issued a report to member General Counsel that was recently reported in the press giving the “In House” perspective.

The factors outlined below are forcing firms to rethink their strategies in the “post crisis world.”

  •  Increased access to Information about law firms. Blame it all on Steve Brill. He tapped into the thirst among lawyers to read about themselves and their competitors. He threw open the floodgates which exposed competitive law firm data to the world. There is now a cottage industry of competitors in the US and abroad creating ranking lists, exposing profits per partner, measuring associate satisfaction, prestige, diversity and pro bono commitments. This wealth of data has armed clients with competitive information and leverage in negotiating with competing law firms.
  • The drive towards commoditization. Contrary to popular opinion, the quality of work product goes up as firms move from totally custom “bespoke” solutions for clients through the standardized, systematized, packaged, commoditized continuum.
  • The growth of enabling technologies. Firms have been able to develop self service subscriptions for clients such as Linklaters Blue flag online services for compliance, Allen & Overy Online transactional document services. and commercial products from Practical Law Company which provides lawyers with checklists and templates for drafting. 
  • Emergence of New Service Providers. Legal Process Outsourcing companies, compete with law firm directly because, clients can chose to use them for certain projects rather than a law firm. But law firms can also take on large projects without having to invest in hiring long term staff. Projects like ediscovery and document review are now routinely outsourced through the hiring of temporary attorney or by hiring a PLO company such as Pangea3 and Integreon
  •  Law firm profitability in the boom years was driven by the ability of firms to raise their rates 6-8% each year Client pushback was inevitable. The economic downturn made continuous price increases unsustainable.
  • Changed basis of competition. Following the 2008 crash, the supply of lawyers exceeded the demand. Organic growth requires stealing market share from other firms.  
  • Clients begin to demand lower costs, alternative fee arrangements and higher efficiency. Firms begin to work implement workflows. 
  • Positioning Strategies. Firms are forced to develop more sophisticated strategies for positioning the firm’s practices, implementing technologies and processes to improve delivery and change the talent model to emphasize training and development/
The Corporate Executive Board recently released a report “Five Forces that will Change Legal.” As reported in Corporate Counsel “Five Forces that Will Change Legal..  The report was based on interviews with 100 Corporate Counsel and highlights 5 factors that will impact corporate legal departments.

Regulatory Issues will converge and the regulation of issues will fragment across international, national and local jurisdictions.

Increased focus of global regulatory compliance. Issues such as data privacy, anti-trust, executive compensation and corrupt practices are gaining importance globally, but there is no harmonization between local, national and foreign regulations, making it difficult for companies to have standard global policies and practices.

Information Grows Exponentially. Ediscovery requests are getting bigger as more and more data is collected within corporation. This will change how corporations manage their internal data.

Competing Demands for Corporate Transparency and consumer privacy will collide. Data security infrastructure will have to accommodate the competing of national and local regulations regarding privacy.

Corporate Legal Department Center of Gravity will shift. As corporations become more global they will need to manage their risks locally which may require legal departments to decentralize.

• Changing Legal Services Market Competition, GC’s will; chose among firms and LPO’s competing for the same work.

The Conclusion is that like law firms, legal departments will have to rethink staffing and talent management strategies, and embrace changes in their approaches to process and technological infrastructure to enhance efficiency.

 Implication for the library and knowledge managers

• Increased importance of our Competitive Intelligence capabilities to support strategies

• Increased importance of regulatory monitoring will mandate the development of knowledge resources to aggregate, distill or analyze comparable regulations arising form local and national authorities.

• Escalate migration from Knowledge Management tools to Knowledge Process Improvement that delivers real efficiencies to clients. Shift focus from knowledge harvesting technologies and “search” to implement knowledge regimes which integrate knowledge tools into best practice workflows.

Monday, August 1, 2011

"The Know it All" at the Library Convention, Esquire's A.J. Jacobs, Makes Us Howl--- Makes Us Think!

So what is the connection between a popular culture humorist and the law library community? Answer: 18,000 pages of legal treatises. and perhaps a million footnotes.

Esquire's Senior Editor, A. J. Jacobs came to the Annual Private Law Libraries lunch meeting last Sunday in Philadelphia and served up his unique mix of insights about several issues at the heart of our daily lives: knowledge, truth, outsourcing and the law... except not quite in the way you might expect. 

A. J. Jacobs is the author or The Know it all: One Man's Humble Quest to become the Smartest Person in the World. and A Year of Living Biblically.

I had the honor of introducing A.J. Jacobs as the guest speaker. There is of course a story, which I used to convince the Board  that this unlikely choice, was the perfect choice.

It all started several years ago, in a fall associate research class where I try to impart my "rules of research" to each incoming class of eager, young lawyers. My "Rule 11" is "consult an expert by identifying and reading a leading treatise on your subject..." I always amplify this rule with a first hand account of my experiences at Shea & Gould in the late 1980’s where I encountered obsessed law firm partner, legal scholar and serial prankster Arnold S. Jacobs.

It would be an understatement to say that Arnold S. Jacobs was a library supporter. He was in fact a library user of Olympic magnitude. I learned to understand and respect the process of treatise writing when Jacobs came to the library seeking research assistance while updating his 5 volume Litigation and Practice Under Rule 10b5. 

It was an exercise that extended for months. He was always monitoring and reading every new case on rule 10b5. But as part of the editorial process he would read and “cite-check” every case cited in the treatise and then read every case citing to the original 10b5 case, ad infinitum.

I should have been suspicious the day he asked me to research the criteria for getting into the Guinness Book of World Records. Jacobs wanted to find out if writing a law review article with the largest number of footnotes would qualify for a Guinness record. He didn’t meet the Guinness criteria but he did manage to get his first footnote record  into something called the "Harper’s Index." He held the record for an article with 1,247 footnotes,  but lost the title briefly to Professor who wrote an article with 1,611 footnotes.  Then Jacobs "upped the ante" by publishing An Analysis of Section 16 of the Securities Exchange Act of 1934, 32 N.Y. L. Sch. L. Rev. 209(1987). This weighed in at 4,824 footnotes. And no one has broken that record in the past 25 years.

Back to the training class. When I took a break after describing Jacobs’s thorough research process, I was approached by a young associate. She said she had just read a book that she was sure was written by the son of my rule 10b5 obsessed partner – and "it was the funniest book she had ever read."  I got a copy of the The Know it All and I howled. I gave copies to my managers and they howled.

AJ Jacobs is not only the son of Proskauer partner, Arnold S. Jacobs who has written over 25 books , but also the grandson of the late Theodore Kheel, the great labor arbitrator, who wrote the classic 10 volume treatise Kheel on Labor Law. I knew the name Kheel from my childhood in NYC, it was a time when union strikes were long and disruptive:  teacher’s strikes, subway strikes, newspaper strikes. Mr. Kheel’s name was a staple of the morning radio news reports.

So what’s a young man with such a pedigree to do when graduates from college? AJ became a writer for Entertainment Weekly. But the seed of competitive intellectual ventures had been planted.  

"Jacobs the Elder" had once attempted to read the entire Encyclopedia Britannica and had only gotten as far as Borneo....

Knowledge

The Know it All  recounts "Jacobs the Younger's" one and half year marathon read of the 32 volumes of the Encyclopedia Britannica. Jacobs explained to the audience that the The Know it All grew out of his attempt to finally accomplish a goal which his seriously over-achieving father had not accomplished. This project did take a toll on his eyes and his life. He inserted little known facts into conversations at work and at home. His wife ended up fining him one dollar for every useless fact he inserted into a conversation. 

The book not only fascinated me because of the interesting or outrageous factoids, but also because of his exploration of various "cults of knowledge." Jacobs hunts down, interviews and or joins a wide variety of information obsessed communities: Mensa meetings, puzzler competitions, Jeopardy contestants... However if there is one omission... it is an exploration of one of the many communities of librarians who transform the glut of available data in to meaningful answers for millions of knowledge seekers in public libraries, academic libraries to private special libraries around the globe.

Truth

In the most edgy moment of the day, Jacobs described his attempt to adhere to a "radical honesty" movement. This is recounted in an article entitled, I think you're fat, which says it all!

Outsourcing

My Outsourced Life describes  Jacobs’s month-long attempt to outsource his life to Bangalore, India. And of course, Jacobs didn't just stick to the obvious daily routines: responding to emails, making his appointments, paying bills. He tried to outsource, fights with his wife, reading bedtime stories, finding a "Tickle me Elmo" toy.

Reading the full article you will discover that he outsourced a research project! Ok, it wasn’t a legislative and regulatory history, but we still have cause for concern. An assistant in India named "Honey" conducted a research project for Jacobs on the person Esquire had chosen as the "Sexiest Woman Alive."

If you weren't worried about the threat of outsourcing before now, Jacobs assessment may be a wake up call. “When I open Honey's file… There are charts. There are section headers. There is a well-organized breakdown of her pets, measurements, and favorite foods (e.g., swordfish). If all Bangalorians are like Honey, I pity Americans about to graduate college."

The Law

Jacobs explained that the idea for A Year of Living Biblically  arose when he and his wife learned they were having their first child. While growing up,  his family had been "Jewish in the same way that the Olive Garden is an Italian Restaurant." He wanted to explore his Jewish roots in order to determine if any of this heritage should be passed on to his children.
He read various versions of the Bible and determined that there were over 700 laws. He set out to try to follow all of the laws to see if they improved his life. He stopped shaving completely because he couldn't figure out where the "corners of his beard" were, he wore only clothes of unmixed fibers. He confessed that as a NY journalist he faced special challenges "Not coveting, not gossiping, not lying." Stoning an adulterer proved particularly elusive. One day while walking through New York's Central Park dressed like a Shepherd, he finally confronted a man who confessed to being an adulterer and sprayed him with a handful of pebbles he has been carrying for this unlikely event.

At the end of the year Jacobs said that felt he had been changed by the experience. He was happier. He noted the particular importance of "giving thanks" in all spiritual traditions. The most profound change came from actively engaging in a daily practice giving thanks throughout the day. He learned to be thankful for every small thing that went right in his life. At the end of the year he came to realize that for the 2 or 3 things that had gone wrong each day, a hundred things had gone right. 

Like other members of the audience (who thanked me throughout the day for inviting A.J. to our lunch) I was profoundly moved by his comments. I am thankful to him for the gift of laughter and especially thankful for the powerful reminder to give thanks!