Being Optimally Sized, Focused, Efficient and Effective Are, Perhaps, Keys to Successful Professional Information Publishing
That v-Lex and Fastcase have merged, now called v-Lex Group, is an important and certainly interesting development for customers on both sides of the Atlantic and far beyond, continuing a process in which the two businesses have been steadily advancing through acquisition and consolidation. The deal, ironically, was announced within days of Thomson Reuters having sold, to an alternative asset management firm, a majority stake in one of its significant businesses aimed at legal markets.
Some might argue that neither v-Lex or Fastcase is young enough genuinely to be labelled “disrupter”, but both have built reputations valued for innovation, expertise and quality, and their combined reach is extensive, maybe reflecting their maturity and adult behaviours. V-Lex, however, has been shortlisted for the Disruptive Technology of the Year Award, 2023, in recognition of the innovation behind its products and services. Any previous assertions that each or both may have insufficient scale and/or added-value content are now less valid. Although still significantly far from being head-on competitors to Thomson Reuters or LexisNexis (RELX), it is asserted, with bravado, by v-Lex Group’s chief strategy officer, to be “the beginning of the end of the duopoly in legal research”. More objective observers might keep their own counsel on the scale and impact of any challenge, for the present, but the direction of travel is clear, and it may be that they are now at an optimum size to compete effectively, and possibly even with honour and integrity. A consolidation of this kind, indeed even this specific one, was predictable and inevitable. Equally so, is the new company’s likelihood of becoming larger again, perhaps by being acquired or, with Oakley Capital’s and Bain Capital Credit’s financial capabilities, taking another step forward with a significant and necessary merger or purchase; there are several likely but expensive targets. The fracas surrounding ROSS Intelligence was a relatively recent event and a not unfamiliar reminder of and lesson on the difficulties of challenging behemoths, and winning or losing; many have come and gone. For now, the hope is that the major beneficiaries will be customers, suppliers and employees who survive the merger, and that it will flourish in content, technology, financial growth and competitive terms.
A recently published article, “How a traditional book publisher is positioning itself as the Google of legal journals”, written by Susanne Stein, managing partner of Vienna’s MANZ Publishers, offers an insightful, bold and optimistic view of parts of the law publishing industry, from an insider who is steeped both in its past and its future. It describes the benefits of taking the best of the company’s past, including its legacy content, described appropriately as its “data treasure” and using the opportunities presented by cutting-edge computer technology to carry it forward to meet customer needs of tomorrow and beyond. Using the search standards of Google as a measure, and taking a linguistic approach to research, MANZ seeks to overcome the challenges of natural legal language and the requirement of computers to understand it. As to what is learnt from this example, obviously, it should be remembered that the rules applicable to, and the experiences of a long-standing family business in Europe, in a country whose total population is less than that of many individual large cities around the world, are not necessarily transferable. With regard to the technology, there are those who will opine, possibly correctly, that it is often inaccurate to apply the hackneyed term “artificial intelligence” to much of the electronic innovation and development of computer-aided legal research, but possibly this does not matter excessively. I would suggest that it is pointless to be obsessed by the limitations of any current clichéd language but instead to focus on successful outcomes, such as those at MANZ.
For all that, it is worth noting the stated views, by way of example, of another privately-owned publisher which is a significant and serious publisher of law content, Edward Edgar Publishing, both Independent and Academic and Professional Publisher of the Year, 2023. Its web site states “We believe it is difficult for large corporate publishers who often suffer from very high levels of staff turnover, top down management and offshored production processes to replicate the dynamic, responsive and efficient publishing service we can provide”. I am inclined to agree, particularly with the points relating to top-down management and off-shored, or even centralised production processes, as market intimacy is, in my view, critical to success. No amount of corporate diktat can replace market knowledge, customer needs and reaction to the specifics of any individual national legal system and those of legal practice within it. It is an internal criticism which I have heard and experienced many times, that the desire of corporate management and director level technical specialists to harmonise systems, processes and market offerings from central resources, has negative effects and is counterproductive. In contrast, those, possibly like MANZ, which have served markets for decades, if not centuries, are more lilely to know very specifically and with reference to their own customer bases, what they are seeking to achieve, what problems are solved, which opportunities can be measurably delivered and what are acceptable market prices, by making changes of one kind or another.
Unfortunately, there is an ever-decreasing number of professional publishing businesses which enjoy the benefits of being financially sustainable as small, or rather “optimally sized”, as well as being genuinely independent, so as to determine their own quality standards and strategic direction, with accountability, regulatory compliance and responsibility. More than likely, those which do operate on that basis are targets of short or medium-term takeover, destined to bring their culture to an end. Indeed, it might be that the still-independent professional publishing businesses such as MANZ, Edward Elgar and Lefebvre-Sarrut, regardless of size, are likely to be found only in Europe. Others, one example being Bloomsbury Professional, which are members of the UK’s Independent Publishers Guild, obviously seeing the market benefits of the impression of being independent (of something not defined), are, nevertheless, part of publicly held and international corporations. Those which are small, but in the hands of venture capitalists, are ultimately likely to have the same characteristics as publishing businesses within large corporations, due to the short-term demands for target profitability and competitive growth, being at all times for sale, if it suits the investors better, and the perceived need for cost-cutting. Those which are owned or controlled by academic or membership bodies, or require the support and approval of committees, have all the institutional limitations which accompany the undoubted benefits of their structures.
Finding small, independent but successful professional publishing houses, particularly those which are not desperate to be acquired, is increasingly difficult. This is a pity, in my opinion, as it is within them that the benefits exemplified by Edward Edgar Publishing are most likely to be achieved. The power and ability of one or two liberated internal champions to innovate to create new products, services and technologies without administrative intervention and constraints and at low cost are more likely to be found in such environments.
The suggestion is that the achievements that have been described at MANZ derive mainly from its particular characteristics. It is specifically not an international conglomerate (since Wolters Kluwer disposed of its 40% interest in it in 2019) which is uninterested in being a legal information provider, but rather a technical conglomerate. For the independent publisher, combining its traditions, competences and unique standing within its jurisdiction, it might happen to be “just right” and a model of its kind. To an extent, it might be argued that many of the small participants in the market are too small, while the extremely large ones are too large, with components of them being strategically non-core, even occasionally, in other respects, being unacceptable business partners to some customers. Whether or not the small, heroic businesses, however, focused, efficient and effective they are, can survive to become the next MANZ, Edward Elgar or Lefebvre-Sarrut, before going under, if unlucky, or being acquired and losing their raison d’être, is a matter for speculation. There may come a time when the international giants of the industry move away entirely from legal content; they are said to be under pressure to maintain momentum and increase their focus on environment, social and governance (ESG) compliance, where Wolters Kluwer has an existing bias, and has restructured itself to focus attention in that direction. It may be that the use of artificial intelligence or related tools for legal research will fall to the remaining businesses, supported by the technical innovation sector, the Silicon Valley Bank fiasco having passed.
At the same time, on the negative side, such businesses may be limited in terms of the amount and range of talent available to them, as well as funds, in order to be able to innovate. They have to face the reality that change, and the high cost of it, has to be a never-ending cycle of development, so that one major technical uplift or directional shift will only bring benefits, if successful, for a limited period and that continued investment will be required. Then, of course, there is the question of customer support for change. Chances are, the smaller the business, with regional or single jurisdictional focus, the more likely it will be that its customers have less interest in technical innovation, so that there will be insufficient financial scale to support initiatives. Indeed, according to Outsell’s Hugh Logue, their LegalTech Survey 2023 research indicates that lawyers are prepared to raise spending on legal technology, but they are increasingly frustrated with that which is complex, and are prepared to cut vendors that cannot provide solutions which improve efficiency and cost management. Of consequence, furthermore, might be scepticism, at this stage, generally having a constraining effect, arising from legitimate government intervention and regulation. Limiting and protective rules may have knock-on effects, with investors holding back on occasion, until they have further clarity, resulting in some developments being impeded over concerns about legal ramifications. The European parliament is preparing stringent new draft rules for the use of artificial intelligence, including forcing chatbot makers to reveal if they use copyrighted material, as it edges towards enacting the world’s most restrictive and, possibly, best regime on the development of artificial intelligence.
Finally, in the interests of balance and with supportive thoughts on the future of v-Lex Group, it is worth keeping in mind that no one structure is ideal, nor is all expansion beneficial. While, on the one hand, there are the horrors of being part of a publicly owned conglomerate or avaricious venture capitalists, on the other is the possibility of, as has been seen in the media world and elsewhere, being brought back into private and harmful ownership under a reactionary fanatic and/or a megalomaniacal twit. Some might have thought that the idea of a major international law practice such as Ince Group going into administration to be an impossibility; times are changing.