Some thoughts on Thomson Reuters Legal

by Jason Wilson on January 29, 2011

By Jason Wilson

It should have come as no surprise to anyone to read the ABA Journal’s post on Thomson Reuters-Pangea3′s (TRP3) job posting for disbarred lawyers to work in a new Ann Arbor, Michigan document review facility, which the Journal was kind enough to promote as a stateside LPO.  According to the post, a company spokesman was quoted as saying:

As we’ve mentioned, we see a multishore, 24/7 operating structure as key to supporting Pangea3 customers in all parts of the world.

As a global information—and now legal services—provider, TRP3 has to take advantage of zoning differences. It’s like running a printing press; it only makes good money when it is operating all the time.

But whether it runs 24/7 or 12/5, there is no denying that the number of customers using Westlaw and related services is jumping. And by “customers,” I mean TRP3 employees.

Expanding beyond document review.

At the time Thomson Reuters Legal (TRL) acquired Pangea3, the LPO was offering

services like patent analytics and patent prosecution services, legal research, business and competitive intelligence services, commercial contracting and licensing services among others.

This list obviously includes document review, e-discovery, contract drafting and management, etc. as well. In an article earlier last year, Sonia Baldia and Daniel Masur of Mayer Brown noted:

Most LPO demand in the United States currently involves low-value, labor-intensive legal services, such as legal transcription, document conversion, legal coding and indexing and legal data entry. For the most part, these services are supplied by India-based LPO providers. As the LPO industry matures, however, the nature of outsourced legal work is expected to ascend the value chain.

Now that Thomson Reuters has skin in the game, that ascension is probably going to come at a faster clip, particularly with their lobbying muscle. It’s going to be a tough battle considering the interests at stake are personal, financial, and practical (e.g., confidentiality issues, unauthorized practice of law enforcement, fee sharing). But given the number of struggling or out-of-work attorneys, there’s a sizable labor market to tap into and no reason why it shouldn’t be explored. (BUT, to give you a hint at steepness of the climb, just consider the current debate before the Minnesota Supreme Court on whether the rules for licensure should be relaxed.)

If the many intelligent people I’ve talked to about the subject are right, TRP3-USA will expand beyond document review, and as a result, their employee demographic will not only grow, but change (more licensed attorneys, for example). All of these TRP3 lawyers become customers of Westlaw and related Westlaw services. In other words, they are not like Westref Attorneys using the services to troubleshoot for customers; they are using the services like a customer would. And this means they get all the benefits of upgrades and improvements (as do you) generated by the hundreds of thousands of other users, with one teensy difference: accounting. After all, I think we’d all like to know how those services are accounted for internally between the divisions. For example, does TRP3 incur a charge from TRL-Westlaw similar to what a firm might pay for those same services? If not, that’s some serious competitive advantage when it comes to an industry dependent on information and technology.

How new services might change support offerings.

Whether the lawyers are overseas or stateside, I don’t think it’s too much of a stretch to look at TRL product offerings and begin to wonder how they might help TRP3 lawyers compete against you, or in a more optimistic view, assist your practice. For example, when TRL finally announces that ProDoc* has been rolled into WestlawNext, how much effort does it really take to see how TRP3 lawyers could be drafting briefs for stateside attorneys given a more robust (read: fact-specific) web-based intake form?

Think about this for a second. What is the value proposition of an overseas lawyer who writes a first draft of a brief while you are asleep? I would argue it’s pretty good if the editorial and drafting standards are medium-high.

And the beauty of this system, from TRL and TRP3′s standpoint, must be that stateside attorneys are generating the data that allows them to be competitive. (WARNING: Zombie apocalypse view coming.) For every lawyer or firm who agrees to use LPO drafting services, there are probably dozens who won’t. But those who don’t are still using TRL’s information services, and pounding away at the keys, and storing data in the cloud, all of which feeds into TRL’s intelligent data systems, and ultimately back to TRP3 lawyers, making them more accurate, more efficient, more competitive. After all, when you consider what TRL has been able to do with WestSearch, it’s ludicrous to think they won’t use the other data being fed into the machine.

You should spend some time and consider what this portends for the future of the legal practice given TRP3′s existence.

Authors’ royalty rights.

In thinking about TRP3 as a Westlaw customer, it occurred to me that the internal accounting question has some serious consequences for authors of analytical content who earn royalties on pageviews through Westlaw and WestlawNext. As I mentioned above, without knowing the structure of the organization it’s difficult to assess whether TRP3 incurs Westlaw charges, and if they do, at what rate. Either way, it seems like an internal accounting issue and one that is probably exempted from an author’s right to receive royalties. If this is the case, authors (and other publishers who have content on Westlaw, like Lexis) need to take a hard look at their contracts and consider renegotiating the terms.

Some other possible acquisitions—law blanks.

I’ve spent some time now thinking about the possible consolidation of the “law blanks” business and whether TRL has made, or thought about making, overtures to these companies. Consider the likes of BlumbergExcelsior and Stevens-Ness. And they aren’t the only ones in business, which is simply remarkable.

I’m not sure entirely how they fit, given the pedestrian nature of many of their forms. But if the category of law-services that TRP3 is providing broadens to include non-lawyer, non-corporate customers, I see no reason why companies like these won’t get swept up. Assuming, of course, they are willing to sell.

A concluding thought.

I like TRL, meaning I’m a fan of the efforts they’ve made to create nice interfaces and improve the overall findability, draftability, and manageability of “legal data.” I honestly cannot say the same for Lexis (although I would give a nod to Ed Walters and Phil Rosenthal of Fastcase, who have made some terrific advancements in pure primary law legal research). So TRL has earned my respect (only I do wish Peter Warwick would give me access to their analytical content to rework for desktop practice manuals). But this LPO business is something else. It’s just the tiny tip of an iceberg, and what lies beneath in store for your clients or potential clients is anyone’s guess at this point.

[Image (CC) ThomsonReutersLegal]

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* At Legal Tech New York next week, TRL is expected to debut Westlaw Drafting Assistant. According to Law Technology News,

The Drafting Assistant, which debuts at the show, combines research, analysis, and drafting software to help you create briefs, motions, and other legal documents from one familiar interface: Microsoft Word. The tool set is implemented as a Word add-in and includes BriefTools to inserts links and cites, CiteAdviser to build tables of authorities and fix citation forms, and a locate authority function to find authority for an issue over mulitple jurisdictions.

I see this largely as a response to Lexis’ integration with Microsoft Word, but a good deal slicker. It is not, however, anything like the monster that ProDoc inside WLN could be.

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