Sabrina I. Pacifici is the Editor, Publisher and Web Manager of LLRX.com.

On January 19, LLRX.com reported, based on information from the National Law Journal, that West Group was planning to purchase FindLaw.com, a site that had distinguished itself as a free Web resource for the legal community. The formal announcement of this acquisition was made by West Group on January 26. Since it was founded in January 1996, FindLaw has expanded to offer access to a wide range of content including law-related news, case law, law-related links, a searchable directory of lawyers and law firms, and other services targeted to the professional, student and consumer markets. The acquisition surprised many in the legal community who count themselves among FindLaw’s regular users.

The response from the legal community, expressed to me directly or through postings on various legal listservs, focused on the issue of free versus fee-based resources for legal research. Would FindLaw’s extensive content continue to remain free under new ownership? With this and other questions in mind, I spoke to several individuals involved in the recent sale off the record, and to Mike Wilens, West Group President. This article will try to provide a context for the sale, and what I hope is my objective perspective as a legal researcher and legal dot-com veteran.

Why Sell FindLaw?

Why did FindLaw sell? The reasons were market driven. For many dot-coms, the venture capital well is dry. Free services and content are increasingly mingled with fee-based services on well high profile Web sites. However, the bottom line for most dot-coms remains they aren’t making any money, regardless of their expenditure of vast amounts of funds, substantial talent and in some cases, years of effort. With daily news stories about dot-com failures in every market sector, West’s purchase of FindLaw reflects the most significant dot-com reality; sites run out money and the time to find it. Faced with this situation, the choices come down to folding, or trying to sell. In this instance, it was buyers choice and sellers’ circumstances that led to this outcome. The principals will remain with the company, at their headquarters in Mountainview, California. They will keep their brand, and their site’s current content will remain free to users. They will receive a much needed infusion of funding, good salaries, and new members for their “team,” from the home office in Eagan, Minnesota. And, of course, their company is now part of one of the two international legal publishing giants. Changes both big and small, and lots of questions about the future.

Why Buy FindLaw?

Although the sale price was not disclosed by either party, the January 19 National Law Journal article stated that it was $37 million. This is a substantial investment in a company that is not profitable, but Mike Wilens anticipates that FindLaw will be “profitable in three years, hopefully.”

What did West see in FindLaw that they determined to be worth such a sizeable investment? The answer certainly involves the following factors: brand, traffic, reputation, content and portal presence. In the legal market, FindLaw is a respected brand name and has a well known url. According to Wilens, with this acquisition, West gained instant access to 35 million page views each month, an impressive Web traffic statistic for a site in any market sector. In addition, West added a database of free legal content to complement their extensive fee-based services.

And last, but not least, they bought FindLaw because they lacked a legal portal of their own. According to Wilens, West had undertaken the challenge of building and implementing its own legal portal, a task in which they had already invested substantially. However, their portal was not scheduled for release until July 2001. This acquisition places them way ahead of schedule and provides a ready made source of content to which they will add deeper content and avenues “to bring lawyers together with clients.”

Lexis surely has plans underway for additional content and services to expand upon their LexisOne portal. Lexis and West, the dominant players in commercial electronic legal research, have a lot at stake as they aggressively move forward into the volatile dot-com market, where profits are virtually non-existent, and users expect information for free.

Brand

FindLaw provides West with complimentary content of significant depth and breath in certain areas, according to Wilens, and a means to expand West’s brand. However, the combination of the two brands, West and FindLaw, is somewhat of a balancing act. Wilens noted that the distinction between the FindLaw and Westlaw brands will remain, albeit under the West Group umbrella. West is a brick and mortar company that has considerable experience and a long history delivering value-added, fee based electronic services and hard copy materials to the legal community. They focus tremendous resources on editorial guidelines and enhancements for their range of products, and maintain an impressive professional staff in the development and marketing areas.

FindLaw’s brand has been in large measure built on their reputation as a free site with good content that has successfully marketed themselves as a reliable resource for both the professional and consumer communities. But FindLaw is dwarfed by the West Group operation. Will the need for the FindLaw brand slowly be eclipsed by acceptance of the West name alone? Only time will tell.

Traffic

West will leverage FindLaw’s traffic by linking content between FindLaw and Westlaw.com. Links will be added from FindLaw content to fee based resources on West, as well as to selected West content back to FindLaw. In this manner, users will be offered a quick and easy means to “opt-in” to content that extends beyond the range of that which is available for free on FindLaw, especially in terms of caselaw. This traffic could potentially be a revenue stream, but its impact will have to be measured after a reasonable period of time.

Legal Portal

FindLaw and West’s respective legal directories will quickly be merged into one product to create the “Web’s largest legal directory.” The digital legal directory is a consumer as well as professional resource, and is rapidly replacing its hard copy counterparts. The combination of these two electronic directories will allow West to “supercharge” their current legal directory with traffic and additional resources. This is part of West’s strategy to leverage FindLaw’s portal presence and traffic to “monetize” a service that actually does generate a profit.

Is the combined power of the West and FindLaw brands, their respective reputations and the portal factor enough to make this venture successful? The “new” FindLaw will be scrutinized by users who will communicate their satisfaction or disapproval via listservs and ‘click-throughs’. LLRX will be listening and evaluating the evolving situation, so stay in touch!