Thursday, January 7, 2010

Waiting for the Other Shoe to Drop - Westlaw on the Ropes?

Is it possible that Westlaw has come to the realization that it must change its business model? The last few years have not been kind to the legal research division of Thomson-Reuters. Let's begin to connect the dots. Here are the first four...
1. In early December, Westlaw laid off 240 legal division workers in North America - 120 in the West bastion city of St. Paul alone.

2. Follow this link to Richard Leiter's analysis of Thomson-Reuters stock price back in March and his further analysis later that month. Some may say that this is only a function of the recent recession. In fact, Thomson-Reuters stock appears to have begun its slide in mid-2007, before this recession was a recession. The stock price has recovered since March but not on par with the rest of the market. See for yourself - on the NYSE the Thomson-Reuters symbol is TRI.

3. Competitors have started coming out of the woodwork. Changes in research behavior at the lawfirm level may move the low cost research providers to the forefront. Readers may recall this post from September in which LOISlaw, the newly revitalized Kluwer-Wolters research system, figured prominently. You may recall from this January 1st post, the threat from the upstart Google Scholar LOJ as a first-choice free legal research research system cannot be ignored.

4. And, how long can West continue its current business model when major academic libraries like Stanford are reviewing their subscriptions of West print resources? When Stanford starts to cut subscriptions it won't be long before others follow.
New competitors, economizing customers, layoffs ... are these symptoms of the need for a minor mid-course correction or the beginning of a long term decline? Regardless, it seems clear that Westlaw needs to begin a serious review of its business model.

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