More Speculation on Mergers and Acquisitions in Legal Publishing

Acquisitions and mergers are expected to continue as the major legal publishers explore ways to increase their profitability, achieve growth and increase market share. When organic growth fails to achieve corporate expectations, acquisitions and mergers are the next best thing.

The acquisition of Canada Law Book by Carswell Thomson is simply the most recent acquisition of note in the Canadian market. There have been many others of far greater significance in recent years, including the acquisition of Yvon Blais by Carswell, the acquisition of Quicklaw by Lexis Nexis and the re-acquisition of Irwin Law from Quicklaw by its founders.

Long forgotten is the fact that Carswell’s core publications – the Canadian Abridgment, Western Weekly Reports, and the Canadian Encyclopedic Digest – became Carswell publications only after the Toronto based company acquired Burroughs and Co, a legal publisher based in Calgary. Prior to the acquisition, Carswell was primarily an importer of legal publications from the U.K., with only a handful of Canadian titles in print. Without the acquisition of Burroughs, Carswell would not be a major player in Canadian legal publishing today.

Speculation continues in legal publishing circles in the United Kingdom and elsewhere regarding more mergers and acquisitions. Two of them could have a significant impact in Canada if they materialized. The first was a merger of Lexis Nexis and Wolters Kluwer and the second was the acquisition of The Practical Law Company by Thomson Reuters.

Lexis Nexis and Wolters Kluwer – an acquisition or merger to achieve greater scale

Just a short time ago, the British press reported yet again on the possible merger of Reed Elsevier and Wolters Kluwer. Like Thomson Reuters, both Reed Elsevier and Wolters Kluwer have chosen to compete on the basis of the scale of the content they provide to their customers, but have failed to keep up with their rival. For almost a decade, the merger of Reed Elsevier and Wolters Kluwer has been seen by some analysts as the only way for the two companies to achieve the critical mass necessary to compete effectively with Thomson Reuters.

As it happened, there was an acquisition under way involving the two companies, although not the one reported. Instead of the grand merger expected, Wolters Kluwer simply acquired Lexis Nexis Germany’s legal publishing business while Lexis Nexis effectively withdrew from the German market.

Needless to say, this unexpected acquisition triggered a new round of speculation. Is this type of acquisition a portent of things? Are Reed Elsevier and Wolters Kluwer now considering a portfolio shuffle in which the companies are prepared to buy and sell relatively weak businesses to the other company in countries in which they both operate?

The concept is one worth considering. By the sale of Lexis Nexis Germany to Wolters Kluwer, the position of Kluwer in the German market was dramatically enhanced while competition was reduced. At the same time, Reed Elsevier and Wolters Kluwer were seen in a new light, as being able to undertake significant but smaller initiatives to improve the overall market position of both companies. Following the logic of Germany, is the next step for Wolters Kluwer to reciprocate in another market by selling a business to Lexis Nexis?

What if Lexis Nexis Canada acquired or merged with CCH Canadian?

If so, Canada is a likely candidate. If CCH Canadian were to merge with or be sold to Lexis Nexis Canada, the effect of would be to create a strong competitor for Carswell in providing legal, tax, and regulatory information in the Canadian market. At the moment, Carswell is perceived to have the competitive edge.

This competitive edge would be lost with the merger of Lexis Nexis Canada and CCH Canadian. As well, the combined businesses would have significant opportunities for growth by making it possible to gain market share from competitors:

– CCH would gain ready access to the legal market for tax information through the Quicklaw platform. It already dominates the accounting market, but has traditionally trailed Carswell in the legal market for tax information. At the same time, Lexis Nexis would gain a strong base in the accounting market.

– Lexis Nexis would have a complete offering of Canadian content to challenge Carswell in every market segment for legal research. Its valuable corporate, securities law market, financial planning and tax content, perfectly balance the strengths of Lexis Nexis in primary content and in labour, family and criminal law.

– Both companies would both benefit from collaboration in the Quebec market where CCH, a leading player, with an established sales and marketing structure, could give an important boost to Lexis Nexis’s ambitious publishing program in the Quebec market, i.e. the Juris Classeur series of encyclopedias.

In the past, the proposed merger of the Reed Elsevier and Wolters Kluwer unravelled because of competition issues in Europe. With open access and the rapid transformation of the market triggered by new players such as Bloomberg, the need for Reed and Kluwer to do something dramatic and effective is more important than ever.

In the absence of a full scale merger, what could be better than a strategic transfer of business assets that would strengthen each company in specific markets? If an acquisition lacks appeal for any reason, another possibility worth considering would be to combine Lexis Nexis Canada and CCH Canadian in a new business entity owned jointly by Wolters Kluwer and Lexis Nexis.

Thomson Reuters and The Practical Law Company – an acquisition to acquire the ability to innovate

The second rumour doing the rounds was the possible acquisition of The Practical Law Company by Thomson Reuters. This company is not well known in Canada but it has come to be seen in the UK as the leading innovator in the legal publishing – it is said that while other companies talk about developing solutions that reflect how lawyers work, The Practical Law Company delivers.

The company was founded in 1990 with the launch of PLC Magazine which “rapidly established itself as the leading source of practical know-how for UK business lawyers”. The company claims that its products are built and designed by legal practitioners who provide answers to the real questions of lawyers in practice, at least in the field of commercial law.

A former publishing colleague in the United Kingdom described their product lines in the following terms:

“The focus tends to be the transaction in question and the supporting content, documents and workflow that might be related to the intended transaction. They talk about being the leading provider of legal know-how, transactional analysis and market intelligence for lawyers. They don’t aggregate primary sources or produce academic textbooks. They deliver and maintain the guidance, analysis and materials front-line lawyers need daily. They work closely with law firms and in-house law departments to provide innovative and practical solutions in know-how, technology and practice development”

The “Holy Grail” of Acquisitions

My former colleague described The Practical Law Company as the “Holy Grail” of acquisitions for the major legal publishers, concerned as they are about the decline in the value of their primary and secondary legal information, and actively looking for new product models that complement and enhance their existing product lines. The only stumbling block is said to be the asking price.

The conventional wisdom is that whoever acquires The Practical Law Company will have the edge in developing “solutions” products for the legal market. If it is Thomson Reuters, we can expect that Carswell would develop derivative products for the Canadian legal market using the product concepts and methodology developed by The Practical Law Company.

Mergers and acquisitions can be of benefit to the legal profession

Both of these possible mergers and acquisitions have the potential to be of significant benefit to the legal profession in Canada. While neither is certain to happen, they would make good business sense.

In the first instance, the acquisition of CCH Canadian by Lexis Nexis Canada would create two strong players in the Canadian market with a comprehensive line of high quality legal information products online – Carswell and Lexis Nexis. In the second instance, the acquisition would provide the incentive for Carswell to create innovative new solutions products for the Canadian legal profession. Not a bad outcome either way for both the customers and the businesses.

Neither of these mergers and acquisitions are certain to happen. If they don’t, others will take their place. In the absence or organic growth and innovation, they are seen as essential both for survival and success for the major legal publishers in today’s market conditions.


  1. To quote the wise and soulful Brian McKnight, “If all things in time[;] time will reveal”.

  2. Thanks for the flattering remarks about the Practical Law Company. However, I would point out that this is just a rumour as we plan to remain an independent company.

    Robert Dow, CEO, Practical Law Company