Legal and tax – over the worst?
Jinfo Blog

3rd March 2010

By Tim Buckley Owen

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Following hard on the heels of sobering results from LexisNexis’s owner Reed Elsevier (http://www.vivavip.com/go/e27969), year-end figures from competitors Thomson Reuters and Wolters Kluwer only serve to confirm the intensely difficult time the legal, tax, regulatory and accounting sector is facing as the recession continues. Both companies use the same word, ‘challenging’, to describe the economic and market conditions they’re confronting – ‘the worst global operating environment any of us has faced’ in Thomson Reuters’ case. Key strategic acquisitions contributed growth of 3% to Wolters Kluwer, but underlying revenues declined 3%, ‘largely reflecting the economy’s impact on transactional and cyclical product lines and soft new sales’, the company says (http://digbig.com/5bbdty). Thomson Reuters reports a 9% increase in tax and accounting revenues to year-end but a 1% decline in legal revenues and operating profits down by 1% and 3% respectively (http://digbig.com/5bbdwb). Both try to put a brave face on things. ‘I am confident that 2009 was the bottom of the sales cycle for us,’ says Thomson Reuters’ chief executive officer Thomas H Glocer, while Wolters Kluwer’s CEO Nancy McKinstry expects 2010 to be characterized by ‘a slow but steady economic recovery’. Including LexisNexis, all three competitors continue to innovate vigorously – new search interfaces (see http://www.vivavip.com/go/e27853 for more on this), more and more transactional and back office solutions and, in Wolters Kluwer’s case, a new three-year strategy focussing on ‘intelligent solutions’ based on specific professional customer needs (http://digbig.com/5bbdwc). The three also face new competition from Bloomberg (see Michele Bate’s post at http://www.vivavip.com/go/e27998 for more details). But there’s still everything to play for. At a recent American Bar Association Ethics Committee hearing, there were warnings that lawyers who could not adapt to evolving technology would forfeit business in ever-increasing levels to those who could – and also to non-lawyer information sources (http://digbig.com/5bbdwd). The ABA may be agonising over the ethical implications of this right now – but they’ll need to be quick. As Outsell analyst David Curle points out in a recent blog post (http://digbig.com/5bbdwe), the business of serving the growing self-help market is an opportunity for legal publishers – and for new entrants too.

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