Lexis Nexis: Acquire, Merge, Destroy

The following article was written about a year ago, on February 23, 2007 (hence some of the outdated time references). Nothing essential has changed since then, so I made only minor revisions and updates in early February 2008.

Acquire, Merge, Destroy is a well-known litany in the software world. Good products that have been gobbled up by larger companies are often left to languish and go downhill. The list is very long, and now the same seems to be starting with recent Lexis Nexis acquisitions.

Two years after Time Matters was acquired, Bob Butler was abruptly kicked upstairs and hasn’t been heard from since. He has, however, started a web site: “Best Thinking” (www.bestthinking.com) which as yet seems to be mainly vaporware.

Following which, Time Matters 8 was released on schedule but with major flaws, in particular with the installation routine, which Lexis changed for reasons of its own convenience but certainly not for the benefit of clients.

LexisNexis has announced a policy of yearly upgrades. Independent of what its intention may be, this is a recipe guaranteed to lower the quality for the software for one simple reason:  There is not a software company in existence (not even Microsoft) that has the resources to fix problems in an existing release and prepare a new release all within the space of one year, especially as software is becoming increasingly complex. Therefore existing bugs will not be fixed, new bugs will be introduced, and there will be fewer and fewer new features worth the price of upgrading. So a policy of upgrading every other release is becoming increasingly rational.

Time Matters 9 (de-branded to “Lexis Front Office powered by Time Matters 9”) was also released on schedule - less than a month after version 8 was finally stabilized for newer computers with hyperthreading and dual core processors. And the "stabilized" version of TM 8 (SR2A) introduced a number of significant new bugs. That says it all.

When PCLaw was acquired, Ron Plashkes, the historic founder, was dumped as part of the package. Now, two years after acquisition, all three of the original partners in PCLaw are gone, as are a significant number of the senior personnel. Meanwhile, there have been two price increases, as well as an increase in technical support costs (technical support was always a profit center for PCLaw, very unusual among software companies, so the increased price represents pure profit for Lexis).

Lexis has decreed that PCLaw Pro will only henceforth be sold as an SQL product. Unlike Time Matters, which needs the SQL version for more than half dozen users if you want to use all its features, PCLaw does not (at least until you get to a much larger number of users). Again, this is pure profit for Lexis.

Further, it seems very likely that the PCLaw offices in Toronto will be liquidated and the whole operation “moved” to Cary and/or Dayton. Attempts to move technical support and other personnel from one place (not to mention country) to another have historically taken a heavy toll on the quality of support - look at Corel’s move of WordPerfect from Utah to Canada.

Lastly, when Concordance was acquired by Lexis, owner Jeff Lipsman left within a few months. In an interview with Law Technology News (October 2006), Lipsman said that after “a little self reflection,” he “made a list of all the things I wanted to do. Guess what: working for LexisNexis wasn’t on it.”

Tom Collins, one of the founders of Juris, who has traditionally hosted the Juris blog, morepartnerincome, has apparently been bumped from doing that (he is now referred to as the “former host” of the blog).

Combined with a number of other significant departures, overall there has been a significant brain drain of senior personnel from both Time Matters and PCLaw since their acquisition by LexisNexis.

While LexisNexis offers the latest example, it is certainly not alone in the AMD scenario. Why does this happen? When you clear away all the smokescreens, the answer, basically, involves two central factors.

Most importantly, companies such as LexisNexis – which is in the publishing/research business, not the software business – most often don’t have a clue as to how to run a software company. Look at the disastrous Novell acquisition of WordPerfect (Novell was a networking company, not a software company). They tend to release a product and "wait and see" what the reaction is, rather than trying pro-actively to prevent negative reactions. Thus they commonly have release dates on which a new version must be released even if it is far from ready (typically the end of a quarter). If the new version doesn’t work well, tough, they met their targets. In short, the priorities of a large companies tend not to focus on how to produce the best software possible. One could even apply Stephen D. Levitt’s concept of “Freakonomics” and argue that it is not in their economic interest to produce the best software possible (even taking into account the adage that a CIO who held up a product release until it was bug-free should be fired for malfeasance). The fact that Lexis has hired a number of “product managers” who have no knowledge whatsoever of the products they are supposed to be “managing” is not a good sign.

The main figure in single-owner private companies (even when there are a couple of partners) such as Time Matters or PCLaw, are driven individuals committed to putting out the best software possible (while hopefully making a profit doing it). The big advantage to these companies is that the (typically somewhat megalomanic) owner can make decisions and drive the company in whatever direction he chooses. If he makes good decisions, the company prospers, if not, not. So by definition, these companies have prospered because the principal made good decisions.

Again, an anecdote speaks volumes: at the first-ever consultants conference, LexisNexis booked a facility for about 150 consultants - that had no internet access!! (at least not at a reasonable price).

What does the future hold?  LexisNexis is reliably reported to be working on a single code-base product that would integrate Time Matters and PCLaw. This makes sense. However, apparently this product will be available on a subscription basis only, in line with other Lexis research products.  This means that both Time Matters and PCLaw are likely to stagnate and become orphaned, if not dead, products, since the development resources will likely be going into the “new” product.

Lastly, the massive introduction of “wizards” and graphic simplification in TM 9 point to marketing directed at small firms on the pretext that they don’t need consultants and can “get up to speed” on their own. One wonders if the consultant program will be radically cut back, made more onerous (charging for the privilege as TimeSlips does), or even eliminated à la West. Based on more recent information, it would seem that the “Independent” consultants are being reduced to the status of technical adjuncts to the Lexis sales reps. There are a number of consultants I have spoken with who are perched on a diving board and just waiting for a decent pool to dive into.

Lexis continues to acquire companies at a great rate, and I have to conclude that this pattern does not bode well for more recent acquisitions such as Juris or Redwood Analytics.

Full Disclosure: On Oct. 12 2007 I received a letter from LexisNexis excommunicating me from the Consulting program on the basis of a clause known as “convenience termination.” No reason was given.
This comes after 9 years of consulting with PCLaw and nearly 7 years with Time Matters, as well as over 100 posts and technofeatures on Technolawyer and over 30 issues of a Newsletter over a 10-year period. See my web site at www.heckmanco.com or the "tips & tricks" sections of this blog.

Comments

[David Rakowski]

Excellent insight as always John.

FYI, the law librarian community (which I'm currently working to become part of) has similar feelings about Lexis and their fellow conglomerate West.

Dave Rakowski
Allentown, PA

[Frank A. Rivera]

Great blog.

Being very familiar with TimeMatter and Lexis-Nexis as Cheif Architect and engineer of TimeMatters WorldServer I can attest to the fact that although Bob and Kevin worked very hard to deliver a great product and at the time I was very pleased to be working with them but in all honesty it was the community of users and consultants that made the product a success.

When the Lexis folks announced their plans to aquire TimeMatters I felt they were in software war with their rival Thomson and that the purchase of TimeMatters was just to keep West Law at bay instead of using their resources to improve the product and customer satisfaction so I refused their offer to stay onboard after the purchase and joined Sun Microsystems instead.

I certainly agree with your post but I'm sure the need for consultants will continue well into the future if not with Lexis products then with new emerging solutions.

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