Guest post: Why Elite and ProLaw didn’t work at TR

By Bill Bice, CEO of nQ Zebraworks; former founder and CEO of ProLaw Software and then at TR, West km.

The vision was there. The execution wasn’t.

• West’s acquisition of ProLaw and then Elite in the early 2000s was designed to embed West’s proprietary information and legal research into practice management workflows.
• It was a compelling vision that wasn’t realized because of the standard challenges of large company bureaucracy and the Innovator’s Dilemma.
• Compelling products like West km showed the potential that was never fully realized.
• Without realizing true synergies, the software unit never became strategic to the company.

The driving reason behind West’s acquisition of ProLaw in 2001 was a compelling vision of leveraging Westlaw in practice management to turbocharge legal workflows. Instead of legal research and practice management being separate tasks and processes, they could be brought together, making the practice of law better.

The first attempt was West’s own system, WestWorks. This was in the late 90s, with a precursor to software-as-a-service (SaaS) known as application service provider or ASP. It was amazingly forward looking, but even West’s market presence couldn’t overcome the technology and bandwidth challenges at that early stage of online software.

To West’s credit, they choose to pivot, and started looking for an established practice management system to acquire. We heard they were looking at one of our competitors and weren’t excited about someone else having the weight of West behind them, so we threw our hat in the ring.

ProLaw was quite unique at the time: one integrated system for both the front office (practice of law) and the back office (business of law). ProLaw includes time & billing, financial management, matter management, document management, docketing, etc. all in one application in one database. That was the perfect fit for West’s vision, and there was nothing like it at the time. Even today, there are flashier options, but it’s hard to deliver the same fully integrated end result, which is why so many mid-size firms are still running ProLaw.

I bought into the vision right away, and it was a whirlwind process completing the acquisition (as I learned later in my career, every acquisition seems that way).

One of the first projects that we tackled as part of West is what became West km. A great pleasure of mine in being part of West was getting to work with Forrest Rhoads, the creator of KeyCite. Forrest subsequently went on to develop a way to use citations to leverage firms’ own work product. Combined with our experience of delivering practice management tools and integrating with document management systems, we created West km. With West km, firms also find their own work product when doing legal research.

West km, which is about the practice of law and not part of the sale to TPG, demonstrated the possibilities in combining information with practice management tools.

However, something else came up along the way: I found out after selling our company that we were really the test case. There was one company in the market that was significantly larger than us, and that was the real target: Elite.

The acquisition of Elite redirected the initial focus of leveraging Westlaw in practice management tools for one really good reason: the Innovator’s Dilemma.

One of the ironies of working at a large company like TR is you get the pleasure of attending lectures by business luminaries like Clay Christensen, the author of Innovator’s Dilemma. As a quick refresher, we’ll use the example of why Digital Equipment Corp (DEC) no longer exists. Every time DEC had to decide whether to focus resources on the next VAX minicomputer, which sold for hundreds of thousands of dollars at a 50% margin, or to invest in PCs, which sold for $3,000 at a 20% margin, the VAX won. Until no one bought minicomputers anymore and PCs took over.

This is obviously not to say that Elite went out of business. Quite the opposite, Elite has been enormously successful. Elite was created by an incredible team, many of whom went on to create another great company, Chrome River.

At the time, Elite 3E was in the early stages of development, and resources were naturally allocated to it because the financial performance of Elite in large law was notable. 3E was the newer, better version of time & billing and financial management – the business of law.

However, the rational for acquiring ProLaw and Elite was driven by the vision to enhance the practice of law. But that requires focusing on the practice management tools that attorneys use. The short-term financial win always came from investing in 3E at the expense of the long-term vision. It shouldn’t have been an either/or decision. West could have invested in 3E and ProLaw.

Just imagine for a moment what that could have resulted in: a SaaS version of ProLaw (WestWorks redux), with legal research embedded as a core ingredient. It would have had first mover advantage, coming from West, over Clio. It would, however, have required significant investment.

Instead, you have a software division from West that has been quite successful for the last 20 years. But it could have changed the legal industry.

As is often the case for large corporations, it’s easier for them to acquire products than it is to build them. HighQ, another significant TR acquisition, is a great example, and interestingly, is not included in the sale to TPG. HighQ is a collaboration platform tied to the practice of law, whereas West is divesting business of law products.

There are certainly times that I wish I had stayed at West and tried harder to be part of making that original vision come to fruition. I’m incredibly proud of the team that built ProLaw and that I get to work with many of them again at my new company, leveraging our experience to make core systems like financial management and document management systems better. My short time at West was an incredible experience and education, but I like building companies, not navigating bureaucracies.

TR selling off the Elite division is not surprising. It’s not a core asset and it isn’t strategic to the future of the company. But it should have been.

Bill Bice is the CEO at nQ Zebraworks, which is tackling the challenges created by Work From Anywhere. nQzw Queues is the workflow engine that integrates with the core systems in law firms, powering more than a third of the largest 250 law firms in the United States and 5 of the top 10 firms globally.