PROFESSIONAL PUBLISHERS FACE BIGGEST SHAKE-UP
FOR 200 YEARS.
IS THIS THE END OF LOOSELEAF?

Publishing information for lawyers and accountants has, in the past, meant loose-leaf ring binders and regular printed updates to keep track of legislative developments. Michael Herson asks if the web will change all this?

Market leaders Butterworths Tolley, Gee and Sweet and Maxwell, who have been keeping lawyers and accountants updated on what's new in their professions for generations, are now turning to the Internet to sustain competitive advantage.

Information on changes in tax legislation and legal precedent has traditionally been delivered to customers in loose-leaf printed format. These updates are then filed and kept on shelves in libraries and individuals' offices, often for decades.

But the web now offers customers a new way of receiving the information, allowing expansion of the range of products and services available.

In addition, the Internet revolution has removed the heavy publishing and distribution costs, which have been the main barrier to entry for years. As a result, several enterprising dot.com start-ups are now challenging the existing order and looking for a slice of the lucrative £554 million UK professional publishing market.

Net Growth

Traditional professional publishers realise that they cannot prevent growth of the Internet, and are responding to the changing market situation by launching their own services. The industry now recognises that customer satisfaction comes first and is developing niche products to meet market needs, which is increasing reliance on product development and new technology.

The three main customer groups are lawyers, accountants and more recently, personnel practitioners - all of whom need to be kept up to date on fast changing legislation and all of whom also require access to important analysis and interpretation from renowned authors.

Established in 1818, Butterworths Tolley is the UK market leader with a 20 per cent share, concentrating on the law and tax segments of the market. Managing Director, Stephen Stout, is not fazed by the growth of the web, and feels "the opportunities far outweigh the threats".

At present, six per cent of Butterworths Tolleys' turnover is online, which is expected to rise to 25 per cent by 2002. The company has invested £6 million in electronic hardware and a staff of 125 people at their Woking on-line centre. It is offering free training and a 24-hour technical support line, in what he calls a "working partnership with customers".

Incentivising Customers

Butterworths Tolleys' sales force is actively incentivising customers to move from hard copy to web based delivery, by giving them discounts on their hard copy if they subscribe to the web offering. Stout reveals that accountants have been "earlier adopters" than lawyers in using the web.

Butterworths Tolley has also linked up with sister company Lexis-Nexis to form Butterworths Lexis Direct, to provide a news service and more efficient information search mechanism for lawyers. The system will automatically alert individual lawyers by e-mail to any important new legal developments once they have keyed in the areas of law they are most interested in.

Butterworths Tolley is actively looking to partner and supply content to other key online information providers such as the government. According to Stout, Butterworths was "a natural choice partner" for the Health and Safety Executive to develop an online legislative database linking health and safety legislation with the relevant guidance. Designed to help SME's understand and meet their health and safety obligations, the service will offer an innovative 'day ticket' subscription.

Global Access

Gwenda Sippings, Head of Information for London of top global law firm Clifford Chance explained: "Our strategy is to explore the availability of electronic information, so that lawyers can have access to it wherever they are in the world. Although we have reduced our expenditure on print it is not significant, but partners are using the web versions more for searching."

Law firm Gouldens has used Butterworths Lexis Direct for many different subject areas. Librarian, Aileen Griggs, says the ability to "do a random text search normally sells the product to the partners".

Thomson-owned Sweet and Maxwell, which has also been existence for around 200 years, has a UK turnover of £56 million, representing 34 per cent of the UK legal publishing market.

Managing Director Wendy Beecham believes that providing choices for customers is the key and that as long as many lawyers still prefer print format, publishers will continue to provide information in this way. "We are not forcing change," says Beecham. "We are not trying to migrate the customers, unless they want to be migrated".

However, Beecham admits the introduction of the web-based offering has "intensely changed the culture at Sweet and Maxwell". Although Avenue Road in Swiss Cottage is the head quarters of the company, a new editorial facility comprising over 150 employees is now based in Hebden Bridge, Yorkshire, where content for its news service Westlaw UK is created.

Partnerships and Acquisitions

Beecham takes a pragmatic view in terms of new market entrants. "Some we would like to partner with, some we will acquire," she said.

An example of this strategy is the recent acquisition of New Law and the legal market list from Croner.CCH. The acquisition increases the number of products the company can offer smaller law firms and members of the Bar, and strengthens its online capability.

Another division of Thomson making big strides in Internet publishing is Gee Publishing, which focuses principally on human resources, payroll, company administration and health and safety, and is rapidly increasing its market share in environmental publishing and facilities management.

Managing Director Robin Sutton estimates Gee's share at 23 per cent of a total market currently worth £100-£125 million in these sectors, with further growth inevitable due to increasing regulation and the need for compliance.

Gee's aim is to provide "plain language explanations" on what to do about the legislation and "all content is organised with this objective in mind", explains Sutton.

Bigger Advantages than Print

Gee also has a number of industry association deals linked to membership charges and customised content. Sutton is bullish about the web: "The switch of format gives us a distinctive advantage, more so than print - we can retain our existing customer relationships and open up fresh ones. It adds lubricant to the market place". He believes the speed of legislation makes the print method of delivery less reliable, with the web helping companies to introduce "consistent practice across their organisation".

Gee uses the Verity search engine to allow customers to search the detailed architecture of its site in an example and of how sophisticated knowledge management technology is being deployed in this market. Butterworths Tolley partners with Autonomy and Sweet and Maxwell uses customised Boolean search facilities, developed in house, specifically for legal research.

Online Personnel Management

One of the highest profile Internet start-ups is OneClickHR, whose origins are in the software company, Vizual Business Tools, which has steadily built up a 12,000- customer base for its cost effective, boxed, personnel software.

The brainchild of Managing Director Frank Beechinor, OneClickHR markets successful products such as Personnel Manager and Personnel Director, which are increasingly being targeted at corporates, in particular the hotel sector, with Hilton and Novotel among its clients.

OneClickHR's e-commerce web site allows organisations to manage their personnel administration on-line via access to material such as contracts of employment and psychometric tests.

Simplicity is key and Beechinor has discovered that "it is ease of use, not price, that is the major issue, especially with human resources people".

The company bases 30 of its 94 staff at its technical facility in Weston Super Mare, Somerset, with sales and marketing operating out of Beckenham, Kent. Turnover has reached £4 million.

Mobile Access

OneClickHR is targeting both small and medium sized enterprises that do not have Human Resources managers, and larger organisations that do, but whose role is over-stretched. "Customers can take all or some of it," adds Beechinor. For instance, a typical 50-employee company seeking legal advice on payroll will pay just £95 per month.

Beechinor envisages a world where human resources managers will become more mobile and access information through their mobile phone and laptop, enabling them to do their jobs better. "Why carry handbooks?" Beechinor quips.

He also understands the importance of innovation in order to keep ahead. "With an 18 month average product life-cycle, we must innovate or others will do to us what we've done to others. The best form of defence is innovation".

Mindful of other high profile dotcom failures, Beechinor has a clear idea of what to avoid, adding "arrogance will drive people to the wall".

AccountingWeb

Another successful web-based competitor is Sift, which in 1997 launched AccountingWeb as a 'knowledge board', now used by 110,000 accountancy professionals two or three times a week, according to group Marketing Manager Richard Dennys.

Based in Bristol, Sift employs 85 people and costs are contained by some 18 editors working from home. In the past 18 months, Sift has received venture capital funding totalling £7.5 million.

Revenue is generated by a mix of advertising rates, which are set at a premium because of the quality of their readership, and e-commerce commission. With 50,000 accountants going through the site each month, vendors are keen to sponsor banners. There is a key account team targeting the major sponsors and advertisers.

Due to EU accounting standards, AccountingWeb sees as much growth potential in Europe as in the USA, positioning itself as an online retailer, not a competitor to the traditional professional publishing houses - in effect a 'shop window'. They have a strong editorial team, including the ex IT editor of Accountancy Age, John Stokdyk.

The site can also be used to shift topical products, such as the current IR35 debate, which was marketed at £29.99. "Sales were great," reports Dennys.

Customer 'Lock-In'

One of the company's strategies is to create customer 'lock-in' through affinity marketing partnerships, such as the supply of company reports, provided via a joint venture with ICC.

Dennys does not see AccountancyWeb as a publisher, but as a repository for information and a search engine to facilitate access. A 'knowledge exchange' between accountants on line is also planned.

A 'sleeper' in the market is the French market leader EFL, which has opened up a London office, and appointed Robert McKay as Managing Director. McKay explains that UK launch plans are at least 1 year away - "we are choosing to take a long time".

The conclusion is that the new web enablers are not viewed as competitors by the paper-based providers, but as alternative delivery channels. Traditional professional publishers are responding by launching their own Internet services, designed to enhance customer satisfaction and choice for the end user.

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