New Bloomberg Law- Jones Day Deal- What Are the Implications?

May 17, 2012

New Bloomberg Law- Jones Day Deal- What Are the Implications?  

 

Bloomberg Law announced today that it has signed an agreement with global law firm, Jones Day, to bring Bloomberg Law to the desktop of all 1,800 attorneys in Jones Day’s US offices. This deal follows on the heels of Bloomberg Law’s agreement with DLA Piper, and raises further implications for both Bloomberg, large law firms, and the publishing industry – particularly LexisNexis and Westlaw.

The immediate and obvious reaction to the news is that Bloomberg Law has responded to skeptics who viewed the DLA agreement as merely a fluke – a rare golden opportunity for two large players to strike a win-win deal. The Jones Day agreement silences some of these critics by clearly signaling that Bloomberg Law has the credibility, the intention and the ability to duplicate these huge deals with global law firms. Bloomberg law has demonstrated in a very short time, that they are serious players in a very competitive market dominated by Lexis and Westlaw, and that they intend to be around for a long time.

The Bloomberg Law- Jones Day agreement like the DLA-Bloomberg one was a relatively safe win-win for both parties, based upon the same assumptions.  I am presuming  that Jones Day has avoided any exclusive usage agreements with Bloomberg Law ,while still retaining its preferred database provider (either Lexis or Westlaw), enabling it to continue to have at least 2 database providers to meet its research needs. l doubt if they lost much (if anything), in terms of its resources in the change, and like DLA, they have at least three option to make up for any loss:  1) supplement its preferred vendor content with Bloomberg Law, 2) add additional or missing content from its preferred vendor (hopefully at very favorable rates), or 3) it can stay pat. As with the DLA agreement, there was no mention in this press release about either the length of the agreement or about the impact on Jones Day’s offices outside the US.

The implications for both large law firms and the legal publishing industry are what intrigue me the most about this event.  Steve Lastres and I have suggested in previous blogs that it is unlikely that a large law firm will bear the expense of having 3 large and costly legal research databases. Therefore, Bloomberg’s gain suggests that another database provider has lost Jones Day’s business. Was it LexisNexis, the presumed loser in the DLA deal? If so, a second high profile loss for Lexis would send a troubling message to their corporate headquarters.  If Westlaw was the loser this time, it would indicate that no online vendor is exempt from displacement in this economy, and it would further disarm the old assumption that mega firms need both Lexis and Westlaw to meet their research needs. Once this old adage is discredited, momentum for new database choices will shift to firms of all sizes.

As in the case of DLA, I believe that Jones Day got a very favorable pricing deal in exchange for enhancing Bloomberg Law’s credibility with mega firms – despite  Bloomberg Law’s reputation for being rigid on pricing and  refusing  to negotiate. For me, the reason for even getting Jones Day’s ear has to be attractive and transparent pricing. Why else would they even take the time to listen to Bloomberg’s sales pitch? As Don Jaycox, DLA Piper’s Chief Information Officer, said about his firm’s deal with Bloomberg Law, “Law firms need to cost effectively deliver great client service in a highly competitive environment….  Plus, Bloomberg’s inclusive pricing model helps us manage costs in a predictable way”. , Jones Day can piggy back on Jaycox’s statement to make a convincing case to its clients re: its innovation and cost-effectiveness. While predictable and inclusive pricing is certainly important to law firms – perhaps now more than ever, there are other factors that are important also. These other factors include  database content, ease of use and intuitiveness, innovation, and the ability to easily toggle back and forth between legal, news and business resources.

In addition to its inclusive pricing for legal news and business information, Bloomberg Law has a powerful and innovative new platform with unique resident information and pull-down menus that turn traditional search and focus research on its ear. For some at least, this approach is more intuitive than either Lexis or Westlaw. In addition, it has added content from respected partners like BNA and the Georgetown Legal Center.

Perhaps it’s time to see more innovation from LexisNexis and Westlaw – before Bloomberg Law leaves them in their tracks. This news will surely catch the attention of both major law firms and Bloomberg’s competitors- Lexis and Westlaw. Business as usual has come under fire once again.  What do you think?


TLO – In Intensive Care or On the Mend?

May 11, 2012

TLO explained this week’s massive layoff (2/3 of their staff of 2000 was “temporarily” laid off), with this brief and ambiguous statement: “Some projects had TLO off course from supporting our core research and investigational products which are growing nicely. The layoff was a necessary adjustment.”

Hmmm. What were the projects? Was it competing in the law firm sector? Which products are growing nicely? How can they continue to operate with just 1 office in Florida, a staff of maybe 50 people, less than 25,000 customers, no real marketing effort except for any remaining telemarketers at the home office, and a product they offer to law enforcement for free and sell to paying customers at $.25 per search? 

Founder Hank Asher named the company TLO (The Last One) – as in his last entrepreneurial effort. The massive layoff hints at a need for a fresh infusion of capital. With that in mind, what are the options? Asher was flush with $750 million from the sale of his previous venture to LexisNexis, yet how much (if any) of that was seed money for the TLO venture is unknown, as the company is privately held. How about a potential white knight? Asher has successfully sold his previous ventures, so who might be interested in partnering with TLO? I’d scratch LexisNexis, as it already owns Accurint (a variation on one of Asher’s previous products), and Thomson Reuters, as it already has its own CLEAR public records database.

How about Bloomberg Law? Bloomberg certainly possesses the necessary cash and has demonstrated a willingness to spend it on content from third-party sources. Yet I’m not sure TLO would be a good fit. Given Bloomberg’s recent high profile deals with BNA, the Georgetown Law Center and its contract with the giant law firm, DLA, TLO’s appeal to the lower end of the legal market seems out of synch.

What about the probability of new player entering the market to either partner with TLO or acquire it? There isn’t a need for another vendor except at the low end of the scale where TLO operated. The flip side of the argument is Bloomberg Law, who entered a tight legal database market where its competitors were firmly entrenched with sizeable market shares. Bloomberg dove in anyway, and started turning the sector on its ear. Yet for Bloomberg, the cost was heavy. It used its financial resources, name recognition, put its reputation on the line, gave up its trademark Ubiq terminals and built an innovative web platform, recruited big-name talent away from its competitors, bought third-party content and integrated it into its own database, and made big, high-profile deals, such as the one  with DLA.

TLO, on the other hand, offers a vast database of records and a powerful search engine that allows the user to get surprisingly good search results with a minimal amount of information, as well as the ability to narrow results using features like a 5-year age range search or a search involving a subject’s connections with multiple cities. Its search interface mimics Accurint, and its Google maps and photos of real and personal property are often only Florida-specific. TLO still touts its ties to law enforcement and national security, rather than reinventing itself in a way that would be more appealing to a broader base, including corporations and law firms.

What was more troubling was their approach to undercut the competition with $.25 searches and $5 reports. The volume necessary to generate enough revenue to sustain the company boggles the mind.

Readers, what do you think? Is there something I’m missing? I’d love to hear your comments


TLO Online Investigative Service Lays off 2/3 of Its Staff While Seeking Venture Capital

May 8, 2012

I was following up on an information request yesterday to TLO VP Bill Parker for a blog that I was doing about the company, when he told me that the company had temporarily laid off 150 of its 200 employees- including him. TLO (which stands for “The Last One”- founder Hank Asher’s last entrepreneurial venture), was attempting to compete in a market dominated by such online giants as Lexis/Nexis and Thomson Reuters.  John Walsh of TV’s “America’s Most Wanted” fame and Hank Asher founded the small company in 2009, after Asher had sold his previous data-fusion investigative software products, and after his non-compete agreement with Lexis/Nexis had expired. Asher had sold Database Technologies to CheckPoint in 2000 for close to $500 Million and Seisint (which later became Accurint), to LexisNexis in 2004 for over $750 Million. In between, he reportedly received an $8 Million grant from the Department of Homeland Security for another one of his ventures, since his earlier work had focused on catching  child predators and 9/11 terrorists.

TLO. LLC is a small company located in Boca Raton, Florida with less than 25,000 subscribers that competed in the public records market dominated by larger and more familiar names such as LexisNexis’ Accurint and Thomson Reuter’s CLEAR.  TLO had maintained close ties with law enforcement agencies, and in fact,  offered its TLOxp software and vast database records to law enforcement entities in all 50 states for free. (This has probably helped Asher, since he had encountered privacy concerns about his data collection in the past, and maintained a Chief Privacy Officer on staff). TLO listed the legal, financial services, insurance, global risk, corporate security, collections, fraud and asset recovery, and private investigation industries as paying customers, but apparently it had not significantly penetrated these sectors to generate sufficient revenue.  Unlike, its competition, TLO didn’t have a large staff to market its product. This was curious, given its relatively low name recognition and market share. (Even a major player like Bloomberg, with its vast financial resources, knew that it needed to invest heavily in an effort to penetrate the legal database market dominated by such entrenched competitors as Lexis and Thomson). TLO had relied instead on its small team of telemarketers based at its Florida headquarters, and its pricing structure, which appealed to smaller law firms and solo practitioners that couldn’t afford expensive database contracts or costly pay-as –you-go searches.  

Some major questions remain for TLO:

  • Can they convince venture capitalists and potential clients that some neat features (powerful search engine, Google maps for property, mobile capabilities with Android and I-phones, photos of real and personal property), and low pricing –it costs only $.25 (yes – cents!) for a criminal background check or $5 for a full comprehensive report sway customers away from the competition?
  • Can TLO continue to severely undercut its competition (e.g. Accurint can charge $30-$60 for the same report) and still generate enough revenue to survive?
  • Will TLO merge or be taken over by a competitor? If so, by whom?
  • What will happen to TLO’s  vast database(estimated by some as “trillions” of records), containing information on  people, assets and liens, court filings, bankruptcies, dockets and judgments culled from public records, credit headers, commercial vendors, law enforcement agencies and even public information from social media sources- if the company fails?

Tune in for further developments on this breaking story.