Friday, January 4, 2013

The Race For Content Continues: Thomson Reuters Acquires Practical Law Company

Today Thomson Reuters and Lexis Nexis released almost simultaneous announcements that they were acquiring specialty legal information companies.

TR announced the acquisition of  PLC Practical Law Company and Lexis Nexis announced the acquisition of Knowledge Mosaic. Today's post will focus on the TR/PLC deal.

TR and PLC

PLC is a private company based in the UK which provides know-how and workflow tools. The acquisition of  PLC will have to undergo anti-trust review in both the US and the UK. While the press release promises nothing less than the transformation of legal workflow, TR executives offered no specific plans for integration with existing TR products. This vagueness may be due to the requirements of the  pre-merger waiting period or maybe  they don't want to tip their hand to their competitors. Additional details are contained in this FAQ.

No Immediate Changes

The PLC US business will remain an independent product in the portfolio of Allison Guidette, Managing Director, Large Law Firm Segment at Thomson Reuters. According to Guidette, TR recognizes the value of PLC's high quality editorial staff. Both TR and PLC pride themselves on their employment of attorney editors. PLC was a beneficiary of the recent recession which drove highly qualified Amlaw 100 lawyers into the job market. At PLC these lawyers have had a chance to build the kind of guidance tools which they wished they had had when they were in private practice.

What this will bring to PLC?

While PLC has a unique offering of drafting tools, sample clauses, "what's market" data and checklists, it has been regarded as being a little thin in providing "authority". Commentaries often lack citations to underlying authority. Presumably the TR alliance will enhance their access to the most current citations and updating tools so that they can more easily enhance their editorial analytics.

How Will TR  Leverage PLC?

Although the press release promised that "together we can create and integrated solution that changes the way lawyers practice," the TR executives I spoke with were not able to  provide more details on which TR  products or functions might be integrated with PLC. According to Guidette, TR plans to take some time to study the process improvement and workflow needs of lawyers in specific practices before deciding how PLC will be integrated with existing TR  products.

My Two Cents

When I first heard about the acquisition of PLC, I immediately saw opportunities in aligning PLC with the Westlaw Business and  Dealproof (now called Transactional Drafting  Assistant). The West KM product, also used in drafting which is in need of  a reboot and then there is WestlawNext which is continually growing in content and enhancements. I don't believe for a minute that PLC will be a stand alone product for long. The acquisition makes little sense if PLC is to be an island within an ocean of TR content and resources. TR like its competitors  wants to own every facet of a lawyer's desktop that they can. But owning the desktop will require deep integration of many current and future products.

Strategic Implications

Globalizing. PLC is deeply entrenched in the UK and beyond. So PLC may be a wedge which TR may use to gain ground on desktops outside the US. We can also not ignore that this comes on the heels of TR's recent alliance with Netherlands based Wolters Kluwer. WK is another publisher who owns serious "desktop real estate" in Europe.

No Cost Recovery. There are also the interesting implications of TR acquiring a product for which there is no market for cost recovery. As clients and law firms have soured  on cost recovery for online research, the acquisition of PLC is an implicit recognition of the fundamental change in the legal information marketplace. As one revenue stream dries up another vein must be tapped.

It seems like a smart deal for both sides of the table.  But as always I hope that it will be a three way win, which has a payoff for law firm and in-house counsel customers as well.

Tomorrow: LexisNexis Acquisition of Knowledge Mosaic. (OK - I lied - the Lexis-KM post will appear some time this week. My apologies.)

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