Michael Wilens: Seven Years Later

Michael Wilens: Seven Years Later
By Cary Griffith

For the past seven years, Michael Wilens and West, a division of Thomson Legal & Regulatory (which oversees all of The Thomson Corp.’s legal and regulatory business worldwide), have been busy. In 1997, Wilens was featured on the cover of Law Office Computing’s October/November issue. At the time he was the chief technology officer and executive vice president for West and Thomson. The cover caption read: “Do you know this man? You will!”

We hate to claim prescience but, in this case, we read the tea leaves clearly. In 2000, Thomson promoted Wilens to president and chief executive officer of West, a position he has held ever since.

We caught up with Wilens in his Eagan, Minn., offices. Though his schedule has ramped up since he was Thomson West’s CTO, he still exudes a boyish enthusiasm for his work and the energy required to lead. This is good news for Thomson, which in its most recent fiscal year charted revenues of $7.6 billion ($3.1 billion of that total comes from West revenue).

The company claims not to have forgotten the small law office throughout the years, still attributing much of its business to solo- and small-firm practitioners. What is West proposing for the small law office of the future? How does West plan to grow? How does the company plan to surpass the competition? Read on to see these questions answered by the lead man himself.

LOC: Throughout the past five years, West made a number of acquisitions (FindLaw, ProLaw, Elite and more). What was the purpose of these acquisitions?

Wilens: Think about it this way: If you look at the information and research market, which is our core market, it’s a good market that has treated us well. We have prospered in it, and we look forward to very good things in the future, but there were other opportunities we thought could add to our corporate growth.

The information market was growing at a rate of 2 to 4 percent per year, depending on the numbers you use. The software or technology market in the legal sector is moving at double-digit rates. And the client development market — marketing services (that is what FindLaw really is) — is also experiencing growth. So as Thomson looks for other ways to grow by meeting the additional needs of our core client base, [software and client development services] look like two natural segments.

LOC: Does Thomson West have an overall game plan for the future? What new initiatives does each portion of the company hope to offer?

Wilens: If you want to know the grand strategy, it works like this: Assemble the best of breed. At Thomson, we felt West was best of breed. If you look at Elite, it’s probably the best of breed in that software space. It’s certainly the largest of the players and has the most impressive client list. ProLaw was a good player. You could argue again, best of breed. FindLaw is really a full-service marketing firm for law firms to help them grow and prosper.

So the first step is to assemble the best of breed. Each one in and of itself is a great company that delivers critical products and services to the profession. The second step is to start to interknit them and create an integrated suite.

The third step — which could be five to 10 years from now as law firms continue to become increasingly technologically sophisticated and the environment becomes more sophisticated — will be working with law firms to develop their technology infrastructure. Remember the old WestWorks? The idea was right, but the timing was way off.

LOC: How has the company changed in the past year, especially considering recent acquisitions?

Wilens: We are just finishing assembling the best of breed, and now we are starting on the creation of the integrated suite. So what you are going to see during 2004 and 2005 are products that begin to knit together these various services.

For example, West km (West’s knowledge management system) is pretty interesting. You put a small set of servers inside your firewall at the legal organization, and Westlaw then will search your content in parallel with our content and provide integrated citation lists. It’s a software product, and by analyzing the citations in those memoranda, it can link you into all of our information.

That is an example of integrating some very powerful content and taxonomies with software that works like search engines, and being able to deploy the software on site, which is what Elite brings to the table. We still call it West km. Some day we might call it Elite km. That remains to be seen.

I could give you several other examples, but you will see these kinds of things coming out over the next eight quarters. To create an integrated suite, we are taking bits and pieces of software and huge amounts of content and pulling it all together.

LOC: What trends will we see in the legal technology industry in the next five years?

Wilens: Historically the question has been: Are computers and technology really providing productivity improvements to industry in general? The resounding answer now is yes. I think that question has been answered. But I am not sure the business of law has benefited as much as other things, like manufacturing. But with cost constraints and budget constraints, being able to run the law practice efficiently, at a high-quality level is going to become increasingly important during the next five years. We think we are going to be offering the kinds of products and services that enable law offices to do that.

LOC: According to your Web site, West ships about 54 million books a year. Five years ago, books comprised the largest percentage of West’s revenues. Is that still true?

Wilens: It crossed last year. In 2001, online and print revenue were about even. In 2002, online was slightly larger. Print is going backward, slowly. We estimate our main competitor, Lexis, had a similar dynamic. You have print and CD going backward around 4 percent on a revenue basis. The big difference is we have four times the volume Lexis does, so guess who got stuck a little more? Us.

But our online revenue continues to grow very healthily. It passed print in 2002, and now it’s much larger. Thomson reported 10 percent online growth in the legal and regulatory sector in 2003.

LOC: Is Thomson West focusing on Internet products and services?

Wilens: That is correct. There are still some holdouts who have muscle memory — those customers can type the line commands into WestMate, and can do incredibly fancy things. And my guess is we will have to pry WestMate out of their cold, dead fingers. Of course, we love them dearly and intend to support them as long as they also are very loyal users of Westlaw.

The Internet has been a great thing. When I got here in 1997, we had this incredible staff and infrastructure, with T1 lines and all the law firms running private this and private that.

We still have a few lines left for people who are absolutely paranoid about losing connectivity, but they are all running essentially Internet technologies. So that is pretty much done.

The next generation architecture for Elite, which is essentially a complete overhaul of the Elite technology, will be the basis for the next ProLaw release as well. And it’s basically .Net-compliant, which allows zero footprint easily. It can be run both locally and globally, and in whatever configuration is most comfortable for the user.

LOC: Do you offer ProLaw and Elite on an application service provider basis?

Wilens: We do. We have not pushed it because this is something that requires a cultural change. If you look at Thomson, we have a lot of technologists here, but we outsource some of our benefits administration work to Hewitt Associates, a global human resources outsourcing and consulting firm. We are used to doing that. And I am convinced the legal industry will be someday, too. But it’s just going to take a while until the comfort level is there, and the industry is fed up with all the costs currently in the infrastructures.

Right now, only 1.5 percent of Elite and ProLaw are used on an ASP basis, but when the next generation of these applications get released into the market, I think you will see that number climb.

LOC: How would you respond to the criticism that your company’s products and services are focused primarily on the medium, large or corporate law office market?

Wilens: West is increasingly segmented so there are huge groups focused on the small law office. Elite doesn’t do small stuff, but ProLaw does. And we have a very important and growing segment both in the solo office, which is a separate segment to us, as well as the small law office.

We have a whole set of information products that have been designed for small and solo practices. In the past couple of years we have released solo packages that are very effectively priced. And in some urban areas we have a sales force that does nothing but sell to solos. They know the solo problems. On top of that, we took the ProLaw software, which is a high-priced package, and reconfigured it so it could be installed with technical phone support in small offices. The cost structure collapsed and we priced it so a small law firm easily could afford this and get really high value out of it.

In the next few quarters these things will start to get bundled together with some of our information products. Our growth in the solo and small law firm segment is probably the largest of any of our segments.

LOC: How does the small law office market figure into West’s future?

Wilens: We look at practice area; we look at jurisdiction; and we look at the general size of the law firm because a three-person firm has to think differently than a 100-lawyer law firm, particularly in terms of what they can afford to pay per lawyer. And can the firm afford an Information Technology person?

If it’s a three-lawyer firm, most likely, someone in that office is in charge of computers and doesn’t like the job. Or someone at the firm has a third cousin Louie who comes in on Saturdays to take care of this stuff.

We know, if you are a litigator, there is a whole variety of things we can do for you — jury verdict valuation, jury selection, client selection — things that are not legal-related, but are very important to the health of your business, and the fact that you want to run a quality business as well as a quality law practice. But to get to that kind of granularity, we look at the small law office practice as a collection of different groups of law firms, each with unique needs.

LOC: What products or offerings are the most popular among small-firm customers?

Wilens: To this day it’s still the fixed content offerings for a fixed fee. It’s still the biggest because it’s used by so many thousands of practitioners. The software and the FindLaw businesses are small and growing. Some day they might catch up, but they are just not there yet.

LOC: Is FindLaw West’s best resource for the small law office? How should small firms incorporate FindLaw into their practices?

Wilens: The small firm is the primary customer base for FindLaw. FindLaw’s customers are the small law firm in the town with people trying to find lawyers who do DUIs, or where everyone with a divorce issue goes in a particular area. FindLaw says, if you sign up with us, we will build your Web site, make it look good, refresh your content, put newsletters out to your clients, and make sure you get onto the Web so anyone searching for this type of practice will find you. We do that for a fixed fee. We are sort of the super Yellow Pages.

LOC: Where do you see the solo or small law office practitioner in the next five years?

Wilens: Dynamics change over time. Our own research was somewhat illuminating. When we created a special unit focused just on the solo, what we found was a large number of solos were mid-sized firm refugees, who had a good set of clients, and just got tired of working in a large organization. They took their clients and now just make a good living. A remarkable number of solos are that way. That is very viable when you think about it. What happens if they need some highly complicated legal thing. … I don’t know how they do this. We are still researching.

So the answer is: We think it’s a very viable segment, more so than we thought three years ago. The technologies allow them to survive just fine.

Michael E. Wilens In Brief

Family
Wife: Carolyn Longacre
Daughter: Ann, age 9 (“going on 31”).

Education background
Wilens holds a master’s degree in business and a master’s degree in computer science from the University of Michigan and a Bachelor of Science and Master of Science in electrical engineering from the Massachusetts Institute of Technology. He serves on the executive committee of the Greater Twin Cities United Way and on the board of advisers for the University of Minnesota Journalism Center.

Reading?
I vacillate between social issues books (such as Paul Krugman’s, “The Great Unraveling…”), and laymen physics books, like Brian Greene’s “The Elegant Universe.” And then I sneak in some fiction. I recently finished Dan Brown’s “The Da Vinci Code,” which also prompted me to read his “Angels and Demons.”

Best movie in 2003?
We go to a lot of them. Probably the most recent was Something’s Gotta Give. The final Lord of the Rings installment was interesting. The final Matrix was also interesting, but a little confusing.

Hobby?
Photography, flying and boating.

Most important New Year’s resolution?
I used to run all the time, but because of being cooped up in an office I have done much less of it. So I have resolved to run a 10k before the year is out. I figure I have the winter in Minneapolis to start getting into running shape, and then I will go from there.

Winter vacation?
I spent a long weekend recently in Moab, Utah running around the Canyonlands. I went with a group of friends not realizing they get up at 4 a.m. to go take pictures of sunrises. It was a heck of a vacation. The early months of the year are really taken up with business. We have senior executive conferences and national sales meetings in Phoenix. I am taking my cameras with me, renting a plane and flying up to the Grand Canyon.

Biggest accomplishments?
My professional accomplishments at West involve two things. While I was CTO for Thomson and West, we created a platform we called Novus (Latin for new), which has become the global platform for Thomson Legal & Regulatory, and is becoming the legal platform for all of Thomson. It allows all of the Thomson companies to share their information freely. It will change the Thomson Corporation. It’s in the process now, but organizationally it takes a while to happen.

The second, which is far more subtle and, it turns out, a lot harder, is organizational. West was organized around deep functions and core competencies. It was a very internally focused organization. Throughout the past five years we have completely reorganized the culture by customer group. We are focused on a customer-centric perspective — we call it segmentation, or front-end customer strategies. So we work more closely with our various customer bases. We have people dedicated to the various needs of legal professionals. We don’t just see customers as lawyers. We see them as bankruptcy practitioners or federal practitioners. And bankruptcy practitioners in small firms are different from bankruptcy practitioners in big firms.

If you think fixing something that is broken is hard, try fixing something that isn’t broken. It was difficult and a big deal. I am not doing it justice, but organizationally it has been profound.

Who outside of Thomson West do you admire and why?
Outside of Thomson it’s Chuck Newman, who I know from a number of years ago. Chuck ran several successful companies near Ann Arbor, Mich. His companies had many ups and downs, but he was a mentor of mine who taught me two very important things:

To be successful it’s really important to do something you love because life has ups and downs, and if you are doing something you don’t particularly like, you will quit during one of the down periods and never experience the up periods.
And probably the more important one: At the end of the day all you really have is your integrity. Never, ever do anything that would sacrifice or harm your integrity. It’s an interesting rock from which to run your corporate life.

ABOUT THE AUTHOR

CARY GRIFFITH is a freelance writer and consultant living in Rosemount, Minn. Questions or comments can be sent to: cgriffith@electronicbooks.com.