Law and Order
Nowhere within Thomson's business has the transition to electronic distribution been as daunting, or as critical to the company's growth, as in its legal publishing business. Even today, the staid world of jurisprudence is bound by tradition and precedence—i.e., legal decisions and documents printed on paper. Yet Thomson has been able to migrate two-thirds of the business from print to online services and software. And in May it celebrated the completion of a more than $20-million expansion of its Eagan, Minn., data center to a capacity of 650 terabytes.
"Law firms are very much a citation population," observes Linda G. Will, director of information resources at Dorsey & Whitney LLP in Minneapolis, one of the original subscribers to Westlaw (Thomson's ubiquitous legal database) when it first went online back in the 1970s. But even 30 years after legal decisions first became available in electronic form, U.S. courts still recognize only print as the authoritative version to be cited in legal arguments.
"When you display a case on Westlaw we can literally show you what it looks like in the book, and that turns out to be very important because federal judges want to make sure it looks like the book, when you attach a case in your filings," says Thomson's Wilens, recalling the legal group's transition to Adobe's PDF file format back in the late 1990s. "But it required us essentially switching out all the backroom manufacturing photo and type-composition stuff. We turned print from a legacy into a strategic advantage, all through an information system."
Another critical transition Wilens presided over was the move from dedicated and costly private networks for its online services, to a more cost-efficient use of the Internet.
"We had an enormous—I mean an enormous—set of private communication networks connecting to all of the large law firms in the country—thousands of T-1 lines and a very sophisticated X.25 network," he recalls. "I shut all that down and I moved us to the Internet and deployed a Web version of Westlaw." But as the online services grew in popularity, Wilens encountered another challenge imposed by the balkanized corporate culture of the 1990s—a culture that Thomson had forged by decades of growth through acquisition.
"We had an online accounting system, and we had a print accounting system, and our customers were sent separate invoices," Wilens says. "To create bundled products or any kind of [bundled] pricing, we couldn't even do that. If you asked me how much revenue we had from one customer, it was a very serious manual exercise."
Among the systems Wilens implemented to help synchronize the legal group was a massive and highly customized SAP system that allowed the company to unify its customer, product and pricing data for both internal and outbound use.
"It cost us a fortune," Wilens says with no trace of lament. "But it gave us the strategic ability to combine product lines and [offer] very sophisticated pricing arrangements that gave us a huge strategic advantage in the market."
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The autonomous print and online groups that had to be unified at the legal group were symptomatic of the broader corporate culture of siloed operations at Thomson in the late 1990s. The old Thomson conglomerate was essentially a holding company for autonomous brands: august newspapers such as the Times of London and the Globe and Mail, consumer businesses such as Thomson Travel, venerable trade publications such as American Banker, and Wall Street staples such as First Call and I/B/E/S. And even as he reshaped the company by selling off businesses that didn't fit the new model, Harrington and his team acquired hundreds of new pieces that had to be integrated.
"In 1997 Thomson was very decentralized," Rhynes remembers. "Each organization was basically doing its own thing in terms of its technology. In fact, there really wasn't a need to build something that coordinated or that leveraged across the company."
Acquisitions continue at all four Thomson divisions, but mostly to fill small gaps and complementary niches. The extreme makeover is done. Thomson has succeeded in transforming itself from a 20th-century purveyor of ink on dead trees into a 21st-century media company whose products are as much technology as they are content. "Ten years ago technology was a black box and it did magical things," says Wilens. "Now everybody is pretty technologically savvy."
Rob Garretson has more than 20 years' experience as a business and technology journalist, most recently as a reporter and editor on the financial desk of The Washington Post.
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