Are Westlaw and LexisNexis simply selling “free” information?

By Kristopher A. Nelson
in May 2009

600 words / 3 min.
Tweet Share Image by mattlary via Flickr Minneapolis News - Westlaw rises to legal publishing fame by selling free information: West makes its money by selling free, public information - specifically, court documents - to lawyers. On this simple model, the company raked in $3.5 billion in revenue last year, placing it on a par, sales-wise, with […]

Please note that this post is from 2009. Evaluate with care and in light of later events.

Lexis vs WestlawImage by mattlary via Flickr

Minneapolis News – Westlaw rises to legal publishing fame by selling free information:

West makes its money by selling free, public information – specifically, court documents – to lawyers. On this simple model, the company raked in $3.5 billion in revenue last year, placing it on a par, sales-wise, with retail giant Abercrombie and Fitch.

The article goes on to discuss interesting ideas for businesses operating in today’s economy: “find a niche with growth potential,” “organize information to make it useful,” “the Internet is a distribution model – not a product,” “turn words into math, “separate the signal from the noise,” “computers can’t do everything,” “treat content like patented material,” “print’s not dead, it just needs online help.”

An absolutely key point that I think the article makes through its examples and discussions is exactly the opposite of the idea that “West makes its money by selling free, public information.” When one looks at the business model more closely, that is exactly what West no longer does. (Except to lawyers who have yet to adapt, I suppose.) Instead, what it really sells is the organization, signal-vs.-noise separation, and the “online help” of human editors who add value to the “free, public information” that is the foundation of West’s business.

Much as I love them, many other resources providing open access to legal materials facilitate that foundational access, but do not yet add the extra layer of value that is why people pay West and Lexis so much money. (Sometimes that extra value is not necessary, of course, so frugal lawyers should always consider when it’s worth paying for otherwise available materials.)

But, really, this is a strong, pro-business public-policy argument in favor of facilitating dissemination of foundational data and information: it makes it possible to create new business models based on adding value to that information. Google does this, although it frequently has to fight in various ways to keep its access to that information, as we have seen recently as newspapers – who perhaps are currently in the business of providing foundational information – have tried to limit Google’s ability to add value. Without the foundational data (like news, but also including all the other data out there via the Web), how can Google add any value?

Imagine how much less innovation we would have seen if linking constituted copyright infringement, and if “fair use” was eliminated – Google and all the value it adds would likely not exist. Whether or not copyright ought to exist in its current form, I think there are strong, pro-business reasons for allowing exceptions to its monopoly reach, and this article highlights that quite effectively through its examples.

In short, I say: (1) as a business, add value to survive and expand, (2) good public policy encourages innovating through new means of adding value, (3) similarly, good public policy makes foundational information (like legal decisions) widely accessible (either proactively or by allowing exceptions to copyright monopolies).

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