Thanks Simon at SLAW for detailing the debts we knew Dewey would leave the publishers with....
Kluwer got off relatively lightly but Thomsons and LN can't be over- joyed with this especially when they end up getting
10 cents in the $ back in about 5 years time.....
Here's his story and link
http://www.slaw.ca/2012/05/29/ouch-legal-publishers-left-with-unpaid-debts-as-dewey-leboeuf-files/
Simon Chester
Ouch ? Legal Publishers Left With Unpaid Debts as Dewey & LeBoeuf Files
Among the top dozen creditors of Dewey & LeBoeuf which filed for bankruptcy yesterday were some familiar names:
Thomson Reuters $2.363 M
Lexis Nexis $1.413 M
Wolters Kluwer $653 K
I find the relative scale of the debts interesting, as well as the fact that the three publishers must have been prepared to continue to extend credit long after the newspapers were spreading word of Dewey & LeBoeuf's troubles far and wide.
We've had scant experience of law firm insolvencies so I don't know what has traditionally happened to the library when a firm closes its doors. Or in today's digital environment are there simply few books to sell, even at fire sale prices.
Sad all round.
For those who want to understand why Dewey & LeBoeuf went astray, the best thing I've seen is Bruce McEwen's assessment at the Adam Smith blog. My friends who know the New York scene tell me the analysis is spot on.
The website has already gone into 404 Land.
3 Geeks and a law blog are also reporting this
http://www.geeklawblog.com/2012/05/westlaw-lexis-cch-feels-pain-of-dewey.html
Westlaw, Lexis, CCH Feels the Pain of a Dewey Bankruptcy
When Dewey & LeBouef filed for Chapter 11 protection, the firm listed the unsecured creditors, and three of the biggest losers on the list were Thomson Reuters (owed $2.3 million), LexisNexis (owed $1.4 million.), and CCH (owed $650K.)
Although the total amount of legal research to debt is something like 1.7% of the total, it still shows the amount of money that firms pay year in and year out for legal research products. I hadn't thought about the fact that Westlaw/Lexis/CCH, etc. contracts are unsecured debts before, but I guess there's not really a lot that Wexis can get from the firms they serve to secure the services they provide.
Does the exposure of this information give us any "insider" information on Dewey's existing contracts with their legal vendors? Could we make some broad assumptions and say that if we calculate out the remaining amount owed by the number of months left in the year, does this come out to mean that Dewey was paying $3.45 million a year for Westlaw (or roughly $260 per month per lawyer? assuming 1100 lawyers)?? Let's keep on making these "very assumptive" mathematical calculations:
Lexis ? $2.1 million annual - $175 per month per lawyer
CCH ? $975,000 - $74 per month per lawyer
In an industry where we are always trying to figure out where we are on our contracts versus our peers, there could be some interesting information coming out in the Dewey bankruptcy. Perhaps those Competitive Intelligence experts could find some even more interesting tidbits.
[NOTE: My friend Don Cruse reminded me that "rest of the year" payments would be avoided in bankruptcy, so my calculations are most likely inaccurate. If Dewey just owes, say the five months of this year, then the totals for subscription costs would jump up about 38% higher than these numbers. Of course, I haven't seen anything specific, so this is just me applying assumptions to come up with these amounts!! - GL (added @11:47 AM]
