"I will divide even if I am alone" - so said Lord Halsbury (aka Hardinge Giffard) in a serious spat over the 1911 Parliament Act - the one which established the primacy of the Commons over the Lords. Halsbury was a Tory rebel, son of a Spectator editor - not quite the Glen Beck of his day, but, well...
Perhaps the descendant of the great Halsbury - Lexis - is now spread too thin or trying to cover too many bases? Until very recently Butterworths, Tolley, IRS Eclipse, Halsbury, EFnP, All England etc were seemingly unassailable brands. Certainly with headline sales of c£200m - you'd think so. Part of a 2.5bn legal empire to boot. But the devil as always is in the detail. Thomson Reuters is now a 32bn empire - dwarfing Reed Elsevier's 6.7bn. At a divisional level as well, all is not so secure. For Lexis UK there's some 9% overseas revenue - mostly US, and in the international UK law sources business, Lexis UK is no stronger than CCH, West or the other international brands. Then there's the tax sector, where they are head to head with CCH again in publishing, and not even in the game against CCH and IRIS in accountancy firm software. This is a big chunk of the overall UK revenues. The Axxia and VisualFiles deals bought a strategic stake in the top of the private practice software market, but this is another slice of the business where they are not market leaders compared to Tikit, IRIS and Elite, etc. In training they are small players behind the likes of Wilmington/CLT and BPP. Thankfully they leave the advertising based B2B businesses to another division, as well as the directory businesses and education publishing.
You are left with less than 2/3rds of the headline UK sales in core legal information services, and even this is increasingly subject to challenge. Specialists like Jordans and Practical Law lead in family law, and large practice company/commercial services respectively - not to mention the age old head to head competition from Sweet's (Thomson Reuters) across the board.
So who'd be Lexis UK? First half results for 2010 showed declines of -4% in international legal divisional sales; actually a very creditable performance given the continuing declines in demand for the old legacy publishing. Second half results should come soon. Fundamentally they are seeing -14/15% core declines against electronic lifts of only 6-7%. So they are expected to make up the difference without compromising the profit or subscription nature of the core business and with only sporadic acquisitions. A tall order - very tall.
Halsbury was undoubtedly a veritable tome, but latterly it resembled the "furniture publishing" of all large encyclopedias. It is time for a long view - all the way back to the first Earl of Halsbury perhaps and the heresy even he espoused when pushed. For decades the easy profits from the furniture publishing bolstered group imperial ambitions. Now that the old sofa at the heart of the empire is having its stuffing knocked about, group heads need to look beyond -4% here, or even -14% there. Its time for one of those fixes which only really happen every generation or so in Chancery Lane; and it needs wise heads in The Strand, Dayton, Ohio and New York. Group HQ in the UK had a nasty habit of always coming for more from Butterworths just when they needed even a little bit more for themselves. Group pressures and temptations must be higher now than ever before, but the radical Tory tradition must reassert itself if they are ever to get to the bottom of this strategic conundrum.
For a profile of Lexis UK see http://www.rbponline.co.uk
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