Nought-60 in 3 Seconds: Legal Research in a Ferrari

I thought I was done with my speculations on Bloomberg Law, but recently ran across articles about the Bloomberg legal platform that were so interesting that I could not pass up the opportunity to offer additional commentary.

The first essay is a laudatory, high-fiving blog post about the wonders of Bloomberg Law published early in 2006 in Adam Smith, Esq. "Adam" (Bruce MacEwen) is agog at Bloomberg's lavish new headquarters and positively enraptured by Bloomberg Law. The brazenness of the pricing for this service - $1,500 per month per terminal per attorney - only fuels his admiration for the Oz-like wizards at Bloomberg.

And why not? How can one not find lovable Bloomberg Law's irrepressible and charming British-born leader, Constantin Cotzias, who besides being an indefatigable runner and triathlete, can with disarming insouciance compare his service to Westlaw and Lexis in the following manner. "Well, if you want an Audi, you should buy an Audi, but if you want to go nought-60 in 3 seconds, you really need a Ferrari, don't you?"

And there we have it - Bloomberg Law lets you drive nought-60 in 3 seconds. In a million years, would anyone at Westlaw or Lexis use this language to characterize their products? Of course not. Bloomberg is not like any other financial or legal publisher. Privately owned. Fabulously wealthy. Blindingly brilliant and innovative. If Westlaw and Lexis are Microsoft, Bloomberg is Apple. If Westlaw and Lexis are Ringling Brothers, Bloomberg is Cirque du Soleil. If Westlaw and Lexis are Atlantic City, Bloomberg is Las Vegas.

But here's the deal. In my previous post, I offered the theoretical possibility that Bloomberg Law might dethrone Westlaw and Lexis. I have now reconsidered this possibility, largely because Constantin's Ferrari metaphor crystallized for me the otherworldliness of the Bloomberg Law vision.

Visiting the Bloomberg headquarters is not unlike what Charlie experiences when he passes through the gates of the Chocolate Factory in Tim Burton's film interpretation of Charlie and the Chocolate Factory. While one might be loath to cast Johnny Depp as Michael Bloomberg, there is more than a passing resemblance between interiors of the two buildings - in the bright and bold colors; the geometric and glass architectural conceits; the pervasiveness of electronic media; the futuristic transportation devices; the sanitized and omnipresent security; and the profusion of free, delicious comestibles. If one allows for the substitution of beautiful women for Oompa-Loompas, you pretty much cannot distinguish the two environments.

While it would be pointless to dismiss the immensity of Bloomberg's product achievements in the past 20 years, there is an undeniable sense in which much of what the company provides - on its terminals and in its headquarters - is eye candy. Even the Bloomberg news - which fills an important niche in the market for real-time information - can hardly be called hard-hitting journalism. It is easily consumed, and more easily forgotten.

The Ferrari metaphor for Bloomberg Law inspires what I am sure is an unintended, yet meaningful, corollary image - that Bloomberg Law may not be much more than a toy for rich legal professionals - research bling, as it were. In an era of gas prices that are swallowing the budgets of ordinary folks, and a looming economic recession that has fossilized law firm research spending, only Bloomberg continues to have the audacity to introduce its legal platform as the equivalent to a high-performance, high-octane driving experience for the rich and famous.

The problem with the Ferrari image is that Ferraris are barely street-legal and hardly a practical transportation option for satisfying the needs that cars meet for most people. They are dream machines for people with immense amounts of disposable income, not vehicles for shopping or shuttling the kids or driving from Seattle to San Francisco. If one must use the car metaphor to talk about other products and the market niches they occupy, the "Audi" image Constantin used to characterize Westlaw and Lexis (accompanied, one presumes, by a barely concealed sneer) is actually far more apt as the solution most law firms would choose to purchase for their daily legal research activities.

In this instance, it so happens that the "Audi" costs about the same as the "Ferrari", but for the purposes of this post, the pricing equivalence of the Westlaw, Lexis, and Bloomberg platforms is less important than the the possibility that law firms might actually choose a Ferrari over an Audi to meet for the daily research needs of their attorneys.

Bloomberg Legal may well end up disposing of the competition the way Willie Wonka rid himself of Veruca Salt in Charlie and the Chocolate Factory. But what now seems more likely is that it simply does not matter much, either way, to Bloomberg the company whether Bloomberg the legal product ever takes off and acquires significant market share. The product focus for Bloomberg Law seems to be tactical, not strategic, and hence not materially relevant or pivotal to the success of Bloomberg's core business.

The primary purpose of Bloomberg Law - to the degree one is discernible - seems to be to broaden the Bloomberg ecosystem of Wall Street users to include the attorneys at firms that serve Wall Street banking institutions. But this is a niche strategy that holds out little possibility of gaining much market penetration for Bloomberg Law beyond the universe its terminals currently serve. The fact that Bloomberg does not appear to be willing to sacrifice its terminal requirements to gain market share outside of Wall Street law firms provides further confirmation that Bloomberg Law exists to shore up existing markets, not carve out new markets in competition with Westlaw and Lexis.

As another review article mentioned (and a friend of mine confirmed yesterday), Bloomberg Law remains primarily a financial and securities law platform. In this article, Constantin himself correctly emphasized that Bloomberg provides superior securities and financial information to what can be found on Westlaw and Lexis. "Anything that's coming out of regulators, the SEC or the NYSE, we'll track that in real time and we'll allow you to monitor regulatory developments that will impact any market sector."

Constantin's right. But there's an equally complete, exceedingly nimble, and far far less expensive securities and financial information solution alternative to Bloomberg Law. It's called Securities Mosaic. It, too, goes nought-60 in 3 seconds. But it's easier to use. And it doesn't require its own terminal.