"Acquire, Merge, Destroy" A Year Later

I first posted “Acquire, Merge, Destroy” just about a year ago, on Valentine's day 2008.  What has changed in the past year? 

In October, LexisNexis released disastrous service releases for Time Matters 9 (9.3) and 8, which corrupted the core data. Since many clients were on auto update, even though the patches were pulled after less then a week, many clients had significant problems. Apparently LN put its senior programmers on the upcoming version 10 and let newbie programmers do what was “only a service pack.” LN subsequently scrambled to fix the issues, including offering free tech support even for people with no tech support. The now-current release, 9.31B, seems to be pretty stable.

These problems were reflected in the fact that for the first time in a number of years, Time Matters failed to win an award for “best case management software” from the Law Technology News popularity contest (which has always been heavily determined by ballot stuffing – so the refusal by Time Matters clients and consultants to stuff the ballots is also significant).

In the meantime, LN has laid off about a third of its technical support and is reportedly outsourcing some programming to India. For software that depends heavily on senior programmers having an “institutional memory” of the code, this is not a very bright idea (even setting aside the recent collapse in an Enron-like scandal of one of the main Indian outsourcing companies, Sataym, which employed over 50,000 workers). And the brain drain at Time Matters continues – several senior Quality Control people left (which may have been connected to the TM 9.3 release disaster).

In a recent poll by “Glass door” which lists the “best 50 companies” and the “worst 50 companies” to work for, Lexis Nexis came in 21st on the list of the “worst 50 companies” to work for. So LexisNexis is considered worse than Borders, RiteAid, Blockbuster or Circuit City (which has since gone bankrupt), but not quite as bad as DHL (#1), Radio Shack or Chrysler or Office Depot.  If the rankings were updated, LexisNexis might even make the “top 10" on the Worst list.
http://www.techcrunch.com/2008/12/30/netflix-adobe-google-make-best-places-to-work-list-att-ebay-radioshack-among-the-worst/

In an effort to boost sagging morale among Time Matters consultants, Lexis formed a “Certified Independent Consultants council” of a dozen or so leading consultants. 7Apparently the first meeting was fairly contentious, with the LN people wanting to talk about the next version, and the consultants demanding to know when it was planning to fix the current one!  So in early 2009, LN “reorganized” the consultant program, upping the sales quotas and making requirements more stringent (including a hardware/networking component for software consultants).

The net result of these changes will be to drive out or marginalize the smaller consulting companies and solos.  Lexis still thinks in terms of selling books, and book salesmen are inherently incapable of selling software, if for no other reason than they get paid a commission on new sales only, whereas the lifeblood of any consulting business is ongoing repeat business, and the sale of software may typically make up less than 20% of a consultant's revenue stream.

So overall, it would appear that the “Merge” portion of the deadly trilogy is virtually complete: all the top leadership gone and substantial brain drain in core programming areas; “managers” who know nothing about the product they are supposed to be managing. This is the prelude to the final step, the “Destroy” part, which now seems to be underway.

In fairness, it should be noted that LexisNexis is not alone in this process.  Interwoven, makers of Worksite (formerly iManage) has been acquired by Autonomy, a large “Content Management Solutions” provider.  Speculation is already rampant as to whether Autonomy will perform an “Interwoven-ectomy and shut off the ‘unnecessary’ parts” that overlap with Autonomy. The announced $40 million per annum “synergies” means only one thing: significant layoffs. And the takeover has already spawned efforts to launch a class action suit opposing it.