London's business press is reporting on the challenging results that Reed Elsevier posted for 2009 and the strategies that the new CEO Erik Engstrom will have to consider to turn the company around. Erik Engstrom is the third CEO within the last twelve months (To lose one CEO is a misfortune; to lose two seems like carelessness).
Reed reported a 36 per cent fall in pre-tax profits to £487 million, and flat revenues for 2009. It expected the first half of 2010 to remain challenging and described last year’s performance as “relatively robust given the depth of the global recession”. Trade publications and perhaps the conference business will likely go on the block.
But legal publishing is a relative bright spot. LexisNexis generated 42 per cent of overall profits as its adjusted operating profit rose by 13 per cent to £665m. The Times reports that "As the legal profession struggles against the downturn, demand for its lucrative LexisNexis legal services is still declining". The New York Times reports that Reed will increase capital expenditures from 4% to 5% focusing on the LexisNexis part of the business, as the company steps up spending on a multiyear effort to build a new, integrated legal research platform that combines content and analytics.
In an analysts' briefing this morning Erik Engstrom commented:
LexisNexis is motoring: US Legal income fell six percent on customer cutbacks and will continue to be “weak” this year, but the legal publisher and data provider’s revenue is up 13 percent, even though “strong growth in online revenues was offset by print declines”. “If you think about it, lawyers’ time will still continue to be extremely valuable. I am personally very happy that we own this business.” Indeed, it’s Reed Elsevier’s biggest sales contributor.
We don't know as much about the New Lexis as we do about Westlaw Next, but here are a few leads:
The ABA Journal says that LexisNexis is planning its own revamped platform. Referred to internally as New Lexis, it is slated to roll out publicly later this year on a date yet to be determined. It aims at a legal research experience that will mimic the ease of use their customers have come to expect from the leading Internet search engine, Google.
Law.com reports a tight integration with Microsoft Office, so that Lexis becomes built into the lawyer's desktop rather than being a separate application. We know that lawyers live in Outlook so that legal research can be conducted without leaving that interface. There are useful screen shots, there, as well as some from our friend Bob Ambrogi. Bob reported that a staffer described the product as "the first step in our journey of reinvention."
How does it work? The press release says:
While reviewing a Word document or an Outlook e-mail message, Lexis for Microsoft Office users can seamlessly access content and resources from LexisNexis, the open Web, or their law firm or corporate files. Key features include:
1. "Search" – A single search box that delivers one-click access to the vast collection of legal content from LexisNexis, the open Web and the user's internal company information database. Results from all sources are displayed in a window next to the active document.
2. "Background" – This function provides background information on "entities" such as people, companies, organizations and cases mentioned in the text of a Word document or Outlook message. It automatically indexes the working document with hyperlinks to relevant information from internal, LexisNexis and Web resources. Upon clicking the hyperlink, the information is displayed in a side pane within the Microsoft Office applications. The Background feature will also display full Shepard's® reports and apply Shepard's® SignalTM indicators directly to the cases cited within the text of the document. Full text versions of case law, news and information cited within an e-mail message or Word document can also be accessed through the lexis.com® resources directly within the Microsoft software application.
3. "Suggest" – Similar to the Background function, this functionality interacts with any text in a Word document or Outlook message. By manually highlighting text, the user can prompt a search that will pull up relevant information from internal, LexisNexis and Web resources. The content is displayed in a side pane within the application. While using SharePoint Server and Microsoft SharePoint Workspace, subscribers also have the ability to store, organize and share documents on a related topic from a SharePoint site. SharePoint can also act as an internal company database from which Lexis® for Microsoft Office pulls information.
Time will tell whether these investments will pay off. For a Canadian observer, this is purely a Dayton-driven launch. QL is a memory (this innovation doesn't appear to be designed for global markets) and it doesn't look as if the English engineers had much input into the release. I really can't tell if it's as potentially game changing as Westlaw Next or whether the entry of Bloomberg law will siphon off the top of the US market. Bloomberg is certainly competing on the transparency of its pricing model. It offers a uniform, fixed price in contrast to the opaque pricing plans of West and Lexis. A Bloomberg subscription is $450 per user per month, but it covers all usage and for heavy users will be less than is paid to Eagan or Dayton. It also offers a floating license for $1,250 a month for five users, but with single user log in.