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IRIS buys AlphaLaw

The IRIS Group are still on the march with the acquisition on Friday of AlphaLaw – we're still awaiting a formal announcement however last Friday (4 December) Simon Meehan sent this letter out to the company's customers.




• No purchase price has been disclosed. AlphaLaw is a trading name of Management Support Systems Ltd.

22 replies on “IRIS buys AlphaLaw”

Bet is was for a lot less than he was offered by Vin.
It will be interesting to hear others thoughts on this news but Simon Meehan was one of the most outspoken critics of Iris (especially after he lost out last time). Some of his staff were thoroughly enjoying the opportunities the situation presented them with and I am sure declarations of independence were made to all new prospects. There is more than one firm who bought Alphalaw recently to get away from Iris. Bet they are overjoyed.
The agreement to support until 2012 is interesting. This is longer than Iris have given Aim users and I wonder what it will mean in practical terms. None the less Iris now has another two accounting systems to look after plus Opsys (who I think have two as well but I might be wrong).
Presumably Alphalaw users will be guided towards Legal Office (Mountain Connected) after 2012. That will go down well although there is always the opportunity for another new product strategy now there is a new man at the helm of Iris.
Vin’s original plan was to offer Mountain users upgrades with products from Alphalaw. They could do this now.
Some would say this strategy would make some sense as the Alphalaw product is seen by many as better than Mountain Connected.

I've just spoken to IRIS and they say – quite reasonably – that is unrealistic to expect them to make a statement on their post-2012 technology strategy for AlphaLaw only a couple of days after concluding the deal with AlphaLaw and before they have had an opportunity to consult with existing AlphaLaw users. Besides, if the economy continues in its present downward spiral, we could all be living in caves by then.

That is reasonable except that their current strategy is “Iris Law Business “ and “Iris Law Enterprise”.
If Alphalaw is to be supported (and presumably this means enhanced as well) they have another product in the mix.
If Iris Law Business is to be the upgrade path for Alphalaw they should say so.
They will have thought about this carefully before buying Alphalaw. They will have a strategy even at this early stage.
They just don’t want to tell you or us about it.
One might hope the level of consultation they have with the Alphalaw users is better than they had with clients they inherited with previous acquisitions.

IRIS actually have a twin strategy here as both their Opsis and GB Systems businesses already operate on a semi-autonomous basis so it wouldn't be difficult for AlphaLaw to follow suite – tho how that would work in a head-to-head with IRIS Law Business (aka Mountain Connect) remains to be seen.
And 'yes' IRIS did not make the remark about living in caves.

Presumaby IRIS have bought AlphaLaw as a simple way of winning back a small number of their many ex-clients.
If so then it shouldn't be long before we hear news of IRIS buying TFB and Eclipse.

Isn't it really the case that Iris taking over the market could be good for law firms? Ah, well perhaps not, when you consider their resources and how poor their payroll software is! It is second best to Sage but, with no other players, second out of two is pretty good (they think) but when you can't do basic things, like select a tray on an HP LaserJet, and have no competitors snapping at your heels, what incentive is there to invest. Is this the future for legal?

Looking back to the days in CSG there was a strategy for AlphaLaw to be purchased in June 2007 on the basis that I believe the directors had told Mountain to stop selling Connected (Now IRIS Law Business) as it was such a poor product and had so many issues. Having realised that this was the case they felt that a lifeline was to get AlphaLaw on-board to replace it.
That didn't happen but what now? AIM and Laserform have had their products ditched in favour of Videss (Enterprise) and Mountain (Business) and as Charles mentions earlier GB and Opsis remain selling their own systems.
So all looks a bit of a mess and CSG decided that Mountain Connected and AlphaLaws products couldn't co exist – one will have to go.

I like the bit about IRIS Customer service – haven't they read the Law Society Guide i.e. IRIS got a clean sweep at the bottom of the market research compared to when they were independent companies and came near the top. To all those AlphaLaw users out there history shows the following:
– Lot's of nice statements about people and services remaining the same initially.
– Key managers/directors will either be pushed or leave of their own accord – e.g. Jim Chase, Vin, Arlene and countless other staff etc
– You'll be 'merged' into the current IRIS Legal structure and product development will probably come to an end in 2011 and you'll be moved to Mountain Connected come 2012
– You have to feel sad for those who escaped IRIS and bought AlphaLaw you're right back were you started.

I have a question Simon.
Why oh why did you have to sell to them?

Track 1, Side Two – Pink Floyd album The Dark Side of the Moon ?

Very good.
Track 2, Side Two might be quite apt if you are an Alphalaw employee.

'Money' yes but I think it throws open a number of points because this must be the longest running negotiation in the history of the legal market! It would appear that CSG first approached AlphaLaw in early 2007 culminating in the rumoured offer of £6m in July 2007. AlphaLaw didn't take that as even though this looked a pretty good deal they appeared not to like the way forward for their staff and clients.
So what could you guess at from all of this? Well have IRIS paid what CSG bid back then? If they did then that looks to be frankly bonkers so it probably means they paid a lot less.
If that's the case what has made them do it now given AlphaLaws apparent dislike for all things IRIS/CSG? Have their circumstances changed so much that despite all this it appeared to be the only thing on the table as a way forward?
Many questions I know but it would seem something material has changed in the interim.

I note the last two postee's haven't moved from vinyl to CD yet, interesting on a technology blog.

CD – Grandad – that is so yesterday. What's wrong with iPod?

Could all this noise be because not one of you could afford to buy another legal supplier in the present climate?

Our understanding is that there was another buyer in the frame but they were only prepared to offer 6 times earnings – which is the going rate among quoted companies in the current market. Clearly IRIS were prepared to pay more.

The real question about all of the Iris/Csg acquisitions is we will get a better product and service at a better price. No one can expect them to retain the current product line for ever and there will no doubt be consolidation of the user base on to 2-3 products. As for the discussion on the price paid for MSS if you add up all the acquisitions, and then look at the total revenue for support contracts you can see where the money is/will be made. The cost base at Iris for the legal division has reduced (ignore the “we are spending more on R&D bullshit”) and they have removed the significant management/owners take from the various acquisitions. So it probably adds up. More interestingly when will they be brave enough to start moving to annual/monthly software and support licence basis. This is a substantial part of the Iris accounting business. If they could move the legal section on to this model, it would be a very attractive cash generating business. Easy to sell on to someone who thinks they can then reduce the operating costs and make more money… I suspect that this is the real game plan.

All very interesting. I hope this runs and runs….. and runs. Perhaps all questions will be answered in the fullness?? All small companies (suppliers) are in trouble. Pensions of the owners have been smashed. The market has matured. It is now a replacement market only. In the case of Alphalaw one oldie and one youngie. An interesting combination. Money was presumably the reason. Never mind who to sell to who would buy. The answer is IRIS. Shame about the Alphalaw users though.

Doubt if anyone wants to buy TFB at the moment. Word is that there are redundancies afoot.

Oh do try to keep up, somebody has already bought TFB – it was Tikit waving a cheque for £7.4 million wot did it in April this year. See 3 April posting on this blog.

Well, as I see it, you can have “any colour you like” as long as its Iris, and reading this thread may give you “Brain Damage”. Anyway, whats gonna happen to “Eclipse”? Someone always takes it too far!

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