Court in the crunch

With barely a whisker between them competitively, Reed Elsevier’s LexisNexis and Thomson Reuters’ Westlaw still dominate the field of legal, regulatory and tax information. But the two big hitters acknowledge they face stiff competition from more specialised providers, and some users are anxious not to tie themselves in too closely to one provider.

In theory, two head-to-head competitors should be good for the market, but one independent information professional isn’t so sure. “This is more than offset by the rigidity and lack of creativity such market dominance imposes,” he suggests, adding that it “encourages them to mirror each other’s moves rather than strike out on a radically different path”.

For another customer, from a large law firm, it’s a Big Three rather than a Big Two. She spends as much on products from the independent Practical Law Company (PLC) as on LexisNexis and Westlaw. But she’s concerned at what she sees as a take it or leave it approach increasingly adopted by the bigger suppliers.

“We are using a library move as a reason to review our whole collection, with cost very firmly in the equation,” she adds.

But Simon Drane, head of knowledge solutions at LexisNexis, doubts whether cost is that big an issue. “As customers experience our new or improved products and better customer service, we are finding that the cost of the products and services they regard as fundamental to their business is less of a talking point,” he says.

Both Westlaw and LexisNexis dismiss any talk of duopoly. “The amount of legal information available continues to grow apace, as does the number of online services through which that content is made available,” says Alina Lourie, director of enterprise-wide solutions at Westlaw’s Sweet & Maxwell.

Challengers
Drane takes up the theme: “PLC has been building its customer base and customer spend effectively for several years; Thomson Reuters is building out its Lawtel offering; while CCH continues to challenge in the tax arena,” he says. “Free information is an increasing challenge and we also have competitors to our client development, risk and compliance and practice management offerings.”

One of those rivals is compliance and anti-money laundering specialist Bureau van Dijk Electronic Publishing (BvDEP). “There is still a lot of interest in how our data can be used in this context because our offering focuses on the depth of our ownership information and the ability to identify the beneficial owner,” says marketing and communications manager Louise Green.

BvDEP is developing an automated customer screening system that will search for links with other businesses and any conflicts of interest. However, while compliance is still a growth area, Green acknowledges that the pace of growth is a little slower than it was when the European Commission issued its third directive on money laundering and terrorist finance (December 2007 in the case of the UK).

With an economic downturn picking up speed, how are customers reacting?

“The suppliers do not appear to have taken on board the fact that times are tough,” says the major law firm customer.

“The legal sector is having to make some hard decisions when it comes down to what is core content,” adds another legal information professional. “This may mean drastically scaling down subscriptions or choosing between the two major players. Budgets are going to be a lot tighter due to the effect of the credit crunch, and customers may well seek reductions in the cost of information – an interesting position when supplier costs are rising too.”

“Information becomes even more valuable during economic downturns,” the independent professional points out. “It’s easy to make money in booms, much harder in slowdowns.” But he still fears that “most senior executives will take the quick and easy decision to retrench on research”.

In response, suppliers continue to innovate in their efforts to get closer to their users.

“Customers have requested that we assist in the integration of content from various providers to aid the legal research process,” explains Lourie. “Westlaw UK has responded, for example, via integration with federated search services and RSS feed functionality.”

Suppliers are also dipping a toe in the Web 2.0 pool. Sweet & Maxwell has put up a Facebook page for the Lawtel and Westlaw UK student population and is also reviewing the implications of Web 3.0 (the semantic web, artificial intelligence, data mining) for its customers and its services.

LexisNexis allows lawyers and corporate counsel who use its Martindale law directory to build their own online networks and has just partnered with leading corporate networker LinkedIn.

But with tougher times on the way, users of innovative services of this kind may be more concerned with watching their backs.

“It will be interesting to see how many professional advisers want to share experience and information which they may regard as their USP or whether the networking is more focused on career progression,” says Drane.

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