Restoring Dignity to the Law: law students

Friday, November 19, 2010

BAR/BRI Looking to be Sold - Why?

Yesterday I heard a rumor from some colleagues who actually paid into the Bar/Bri scheme that they received an e-mail that Thomson-Reuters put Bar/Bri on the sale block. I wanted to post, but wasn't able to find an article or press release to source. Now AbovetheLaw has gone ahead and reported on it, complete with a connection to T-R's acquisition of Indian outsourcing company Pangea3 and the full letter sent to Bar/Bri's subscribers.

This decision to sell is in no way related to BARBRI’s performance. BARBRI is the leading bar review course in the United States with over 40 years of experience, strong leadership and quality of service. Our parent company believes, however, that bar preparation no longer fits its long-term strategic vision, which is to provide intelligent information and workflow solutions to professionals.

As disclosure, I want to note that I think Bar/Bri is a leach that does a disservice to the legal field. I have little regard for its business and believe that its continual existence is evidence that the bar associations are not doing their job to the best of their abilities (e.g. that the bar exam doesn't test the skills it should). But that's an entry for another day.

To be fair to all parties, Bar/Bri is something of a misfit in Thomson-Reuters. Its existence there is an accident of corporate history. Bar/Bri first merged into Harcourt and then into Thomson-West publishing. This made sense because Thomson-West was the largest legal publisher in the country, providing a broad range of legal information. Acquiring a small, profitable company who published legal books designed to aid bar passage made sense. Furthermore, Thomson Corporation (the parent company of Thomson-West) was one of the world's leading textbook publishers and had an expansive business in standardized testing (through Prometric). So Bar/Bri fit in multiple ways in Thomson-West's overall scheme.

Fast forward to the 2000s. Research of all stripes is moving rapidly online. Thomson Corporation begins acquiring all sorts of online information distillers across a wide range of industries. In 2006, Kenneth Thomson dies and is replaced by son David Thomson. In 2007, Thomson sells its entire textbook publication and standardized testing division, leaving Bar/Bri as an outlier saved only by the fact that it's grouped with West ("Thomson Legal") and not Thomson Learning. In 2008, Thomson acquires Reuters, the 2nd largest news dissemination service in the world. The resulting company was a $30 billion behemoth whose interests is in professional news distribution. Westlaw fits in this mold; comparatively-small Bar/Bri does not. Consequently, from their perspective, it makes sense to sell Bar/Bri as an outlier to their current business interests.

But why NOW? And why announce it publicly?

Even if a company is a misfit, a corporate conglomerate isn't going to sell it unless it's a good time to sell; to do otherwise would be a disservice to shareholders. Furthermore, leaking it to the world that a sale is happening guarantees that no one's going to overpay for it.

It is true that Bar/Bri has increased competition, but they're still the king of Bar preparation services with a rather large moat. Maybe I'm reading too much into it, but my guess is that Thomson-Reuters looks at this being the best time to sell Bar/Bri because they don't see much revenue growth in the business. Even with new law schools being accredited every day, they don't see Bar/Bri being a worthwhile investment to hang on to, when it's the default choice for Bar preparation?

Is there a chance that Thomson-Reuters sees what's going on in the law school world and realizes we may be reaching the end of the line with lawyer saturation? The people at T-R aren't dumb. The reason they're still around in a post-newspaper, post-print world is that they were forerunners in online information. Things like Westlaw and a plethora of science, financial, and healthcare tools.

Anytime anyone with that kind of vision to see where the world was going in 5-10 years does something like offload a subsidiary that by all accounts is profitable and the leading bar review preparation course, one should ask a simple question: what do they see the market looking like in 5-10 years?

Since they apparently don't see the market for Bar/Bri's services being as strong in 5-10 years (or as relatively strong) as they see it now, at least enough to keep it within their legal services family, why might that be? And why would they be so desperate to unload it that they don't care that Bar/Bri went public with the information? What do they know that the people supporting law school don't?

About RDTTL

I am a current law student who dreads the end of the conveyor belt and wishes to see positive change in the legal community.

To me, a dignified profession is one that is respected, one whose members serve as ambassadors for its social value, one that lets its practitioners lead healthy, productive, and active civic lives, and one where the members of the profession take active steps to protect the profession's honor.

It is self-evident that the legal profession has problems on that front (or all of those fronts, if you want to break it down). Lawyers are twice as likely to kill themselves as the average person. They are significantly more likely to become depressed or alcoholic. Along with other factors, an oversupply of labor has led to smaller salaries for most - putting the ability to have families or manage debt at risk - while making attorney work an impossibility for others. Last year roughly 1/3 of recent juris doctor recipients did not have jobs. Legal process outsourcing makes it far less likely that they'll ever get them.

These issues existed before the recession and extend beyond its effects. This blog explores these issues and seeks to provide helpful information and commentary, especially with regards to legal education, the reform of which I believe would aid many the other issues that prevent the law from being a fully-dignified profession.

I have chosen to use pseudonymous speech for roughly the same reasons outlined by zerohedge, even though I don't think the risk of retaliation is that high in my case (of all the professors I've had, I can only think of one who would "retaliate").

If you wish to contact me, please leave a comment. In the interest of simplifying my life, I am cutting my email addresses down, including the one that used to appear here, which has become unmanageable due to spam.