American Lawyer Media Holdings, Inc.
American Lawyer Media Holdings, Inc.
Sales: $121.5 million (1998)
NAIC: 51112 Periodical Publishers; 51113 Book Publishers
American Lawyer Media Holdings, Inc., a holding company formed in 1997, is a leading publisher for the legal profession. It publishes 2.1 periodicals, including the American Lawyer; an award-winning monthly magazine; the National Law Journal, the nation’s major national newspaper for lawyers; the New York Law Journal and other regional publications; and several specialized newsletters and periodicals. It also publishes over 100 law books, operates several web sites on national and regional legal topics, and offers a wide variety of seminars and conferences for lawyers and other professionals. The holding company thus continues to make major contributions to legal journalism, a field founded by its predecessor firms. By describing law firm finances, management, and other legal trends and events, its writers shed light on a profession that historically wanted little if any publicity.
Origins of Predecessor Companies
Although law firms began growing in the late 1800s to meet the needs of expanding corporations and continued to recruit more and more attorneys in the 20th century, the legal profession remained for all practical purposes a secret society guided by its own rules of professional conduct. In 1908 and 1975, for example, the profession adopted rules prohibiting cooperation with journalists, writers, and other outsiders. The goal was to prevent any public discussion of lawyers’ success and their clients, which was seen as self-promotion or advertising. Some law firms even refused to tell outsiders how many attorneys they employed. Although courts relied on historical judicial precedents, the legal profession wanted nobody to know its own history.
That all changed rather dramatically in the late 1970s. The U.S. Supreme Court in Bates v. State Bar of Arizona (1977) struck down professional barriers against advertising, and about the same time the new field of legal journalism began. Because of these developments, “A few years later the interested reader could find an abundance of information about firm organization, finances, relations to clients, office politics, and so forth,” wrote law professors Marc Galanter and Thomas Palay in their 1991 book detailing the transformation of big law firms.
Two competing publications made the difference. In 1978 James A. Finkelstein began publishing the National Law Journal, a weekly newspaper for attorneys. First handed out at the 1978 annual meeting of the American Bar Association in New York City, the newspaper in August began to be published weekly. In 1978 Finkelstein began the paper’s annual survey of the nation’s 200 largest law firms, which he called in the September 19, 1983 issue “our most widely requested feature by readers.”
Finkelstein admitted that at first he was uncertain that lawyers would buy his newspaper. However, he stated in the September 24, 1984 issue that “we have been extremely pleased with the reaction of the profession. When we began, it was unusual for attorneys to talk openly about their work; now it is common for them to feel they can speak with us and trust us. ...”
The National Law Journal’s readership steadily increased in the 1980s, from 160,000 in 1983 to 250,000 in 1988. In addition, their survey expanded in 1983 to cover the nation’s 250 largest law firms.
Meanwhile, Steven Brill, “who revolutionized legal coverage,” according to the February 24, 1992 New York Times, began his contributions to legal journalism. Brill was born in 1950 in New York City. After graduating from Yale Law School in 1975, he began his career as a journalist instead of practicing law. His 1978 book The Teamsters was a bestseller. Writing an Esquire column on lawyers led him to consider starting a new magazine about lawyers. In 1978 Brill and his business associate Jay Kriegel, encouraged by Esquire editor Clay Felker, met with the British conglomerate Associated Newspapers Ltd., the Esquire’s financial supporters. Associated Newspapers agreed to invest the first $3 million in the magazine, which raised a total of $35 million to get started.
In February 1979 the first issue of the American Lawyer featured Brill’s article on Joseph Flom, who had led Skadden Arps Slate Meagher and Flom into the ranks of the most prosperous U.S. law firms and also served as chairman of the board of editors of the National Law Journal. In this article Brill emphasized law firm finances, a topic usually not discussed by most lawyers. In these early years Brill both managed the magazine and wrote the lead articles. Well known for his unrelenting demand for accuracy, Brill took the unusual step of printing errors and the names of responsible reporters in his magazine.
Brill soon began publishing his ranking of the nation’s top 100 law firms. Unlike the National Law Journal’s rankings by number of attorneys, Brill ranked firms by their annual revenues. Although some initially considered the American Lawyer no more than a gossipy lightweight magazine, in the 1980s some law firms sought to be included in Brill’s publication. Former U.S. Supreme Court Chief Justice Warren Berger said in the August 12, 1991 New York that, “American Lawyer routinely revealed information-revenues, partners’ salaries, and fees-that had always been closely guarded by firms. Brill also looked at the business ethics of individual firms, and how they treated young associates, which turned his magazine into a bible among law-school graduates.”
By 1984 Associated Newspapers followed Brill’s advice by acquiring nine regional legal newspapers, including New Jersey Law Journal and Washington, D.C’s Legal Times. By then Jay Kriegel had left, and Brill was both editor and publisher. Brill hoped the addition of the new regional newspapers would solve his firm’s financial problems, but the firm kept losing money. In 1989 Manhattan Lawyer failed.
The kind of information provided by Brill and Finkelstein’s periodicals influenced the process of lateral hiring of experienced attorneys from rival law firms. Such hiring had long been done, but most attorneys previously remained lifelong members of their firms. Some critics argued that the new business orientation of law firms hurt the profession by decreasing firm collegiality and creating a dog-eat-dog atmosphere. Mass defections of entire departments and mergers between firms became more common.
In any case, the new legal journalism influenced the American legal profession as it grew rapidly in the 1980s. In 1985,508 law firms employed at least 51 lawyers, compared to only 38 firms that had more than 50 lawyers in the late 1950s. The largest law firm in the United States in 1968 had 169 attorneys. In 1988 the largest firm employed 962 attorneys.
Other trends that Brill, Finkelstein, and the other legal journalists wrote about included the hiring of more women and minority attorneys, increased specialization of legal practice, and the many mergers and acquisitions of the 1980s. In addition, they looked at entire new legal fields resulting from new industries such as biotechnology and software.
Developments in the 1990s
In 1991 Brill started Court Television, a $40 million joint venture involving Time Warner, NBC, and Cablevision Systems Corporation. Later NBC bought out Cablevision’s share, and Liberty Media became a Court TV partner. Court TV had some initial success, broadcasting well known trials of William Kennedy Smith, John Wayne Bobbitt, and the Menendez Brothers. Showing the long murder trial of O.J. Simpson brought Court TV into 30 million homes, up from just 2.5 million in 1991.
On May 1, 1993 Brill started Counsel Connect to provide inexpensive legal advice and research on common legal questions as one way to reduce expensive legal services. The electronic bulletin board service (BBS) by October had signed 600 clients, including 80 of the nation’s 100 largest law firms and also the legal department of General Electric and other corporations. Originally offered at $975 per month plus 65 cents a minute, Counsel Connect’s price for small firms dropped by October to just $6 a month and 65 cents a minute to access the database.
- James A. Finkelstein begins publishing the National Law Journal.
- Steven Brill begins publishing the American Lawyer in February.
- Brill persuades his British corporate backers to buy nine regional legal newspapers.
- Court Television is started in July by Brill to broadcast trials live.
- Brill starts Counsel Connect, an electronic bulletin board service, and launches Law Technology News.
- Corporate Counsel is started by Brill.
- Court TV receives high Nielsen ratings from broadcasting the O.J. Simpson murder trial.
- IP Worldwide is first published by Brill.
- AmLaw Tech is founded.
- The newly formed holding company acquires American Lawyer Media, L.P. and National Law Publishing Company, Inc.
- A company subsidiary purchases Corporate Presentations, Inc.; Legal Communications, Ltd.; and the Delaware Law Monthly; the American Lawyer and Legal Business publish their first survey of the world’s largest law firms; the firm hires William L. Pollak as its president/CEO for a five-year period; company ends Counsel Connect and replaces it with Law News Network, a national Internet site.
- The firm expands its Internet presence with new web sites and begins the Daily Deal newspaper.
Brill in 1996 acknowledged that many thought that the American Lawyer and particularly its annual rankings of the top U.S. 100 law firms had ruined the legal profession. In the magazine’s July/August 1996 issue, he cited a Boston attorney who had stated on Counsel Connect that, “When the American Lawyer brought the bottom line out of the closet, it became okay, among other things, to chuck ‘low productivity partners.’ What could be more destructive of collegiality?”
In response, Brill defended his publication for providing ‘real market information to lawyers and their customers” and that it had “made and will continue to make the profession stronger in every way in the next century than it would have been.”
Meanwhile, changes occurred in the ownership of Brill’s rival, the National Law Publishing Company, Inc. On December 1, 1995 Boston Ventures, through a wholly owned subsidiary, NLPC Acquisitions, acquired about 94.3 percent of National for about $142 million. At the same time, NLPC Acquisitions was merged into National, with National remaining the surviving company.
The Creation of American Lawyer Media Holdings, Inc.: 1997
In early 1997 Steven Brill sold his share in the companies he founded, American Lawyer Media and its affiliate Courtroom Television Network Inc. to Time Warner, mainly because of Time Warner’s new vice-chairman, Ted Turner. Brill repeatedly had tried to buy out Court TV’s three owners, NBC, Time Warner, and Liberty Media, claiming in the August 1997 Vanity Fair that the three “really hated each other” and had different goals. Brill claimed that Time Warner agreed with his plan, but Turner did not. Brill received $20 million in this transaction and soon started Brill’s Content, a magazine about the media.
Time Warner Cable Programming’s President Thayer Bigelow took over management of Court TV and also considered a Brill plan to start regional court channels in conjunction with the regional legal newspapers, but that concept never materialized due to decreased audience interest. Court TV’s ratings had plummeted by early 1997. Meanwhile, Time Warner decided to offer the American Lawyer, Counsel Connect, and nine regional legal newspapers to interested buyers.
At that point Bruce Wasserstein entered the picture. He had graduated with honors from the University of Michigan, Harvard Business School, and Harvard Law School. He began practicing law in 1972 at New York City’s Cravath, Swaine & Moore before joining The First Boston Corporation in 1977. In 1988 Wasserstein and Joseph Perella left First Boston to found the Wasserstein Perella Group, Inc. (WPG). Wasserstein served as WPG’s chairman, president, and CEO.
On August 1, 1997 Cranberry Partners LLC was created as a limited liability company in Delaware. Cranberry then started ALM Holdings, LLC in Delaware. ALM Holdings in turn formed three companies, including two wholly owned subsidiaries, ALM, LLC as a New York limited liability company and Counsel Connect, LLC, a Delaware limited liability company, and a 99 percent-owned subsidiary called ALM IP, LLC, a Delaware firm.
On August 27, 1997 Cranberry closed its acquisition of American Lawyer Media, L.P. for $63 million. When this acquisition closed, Cranberry was held by W.P. Management Partners, LLC on behalf of U.S. Equity Partners, L.P. and some of its affiliates. WP Management Partners was the merchant banking entity of Wasserstein Perella Group, Inc. Wasserstein’s firms were based in New York City.
The next step occurred on November 26, 1997, when Cranberry merged with the Delaware firm of ALM Capital Corporation, which at the same time was renamed American Lawyer Media Holdings, Inc. On the same day, ALM Holdings, LLC merged into ALM Capital Corp. II, which was renamed American Lawyer Media, Inc., a subsidiary of American Lawyer Media Holdings, Inc.
Bruce Wasserstein, the board chairman of American Lawyer Media Holdings, Inc., also wrote a 1998 book about mergers and acquisitions. Big Deal: The Battle for Control of America’s Leading Corporations was described in the spring 1999 Directors & Boards as “valuable as a basic or intermediate introduction to the world of M&A.”
After investments from its stockholders Wasserstein & Co., Inc.; U.S. Equity Partners L.P.; and U.S. Equity Partners (Offshore) L.P., the holding company through its subsidiary acquired all outstanding stock of National Law Publishing Company, Inc. from Boston Ventures and James A. Finkelstein for about $203 million. This acquisition completed the joining of the two former rival publishers of legal periodicals, American Lawyer Media and National Law Publishing. James Finkelstein stayed on as a director of the holding company, National Law Publishing Company’s president/CEO, and as vice-chairman of American Lawyer Group, reporting to Chairman Wasserstein.
On March 3, 1998 the holding company through a subsidiary purchased Corporate Presentations, Inc., the owner of LegalTech, followed by the March 31 acquisition of Legal Communications, Ltd. In October the firm acquired the Delaware Law Monthly. In December 1998 it also began the Law News Network, described in its 1998 10-K annual report as “the Internet’s most extensive daily national legal newsource.” The network’s web site (www.lawnewsnetwork.com) provided current legal news and material from the holding company’s periodicals, plus some original content and links to other web legal sites.
In 1998 advertising provided about 56 percent of the holding company’s net revenues of $121.5 million. Other revenues came from subscriptions (19 percent), ancillary products and services (23 percent), and Internet services (two percent).
In 1999 American Lawyer Media Holdings started new publications and web sites and also formed joint ventures to promote its products and services. For example, in February it worked with the American Bar Association to put on the Chicago Techshow ‘99 and also started California Law Week. In March the holding company announced a strategic partnership with CompuServe. On September 14, 1999, American Lawyer Media Holdings launched the Daily Deal, a new periodical printed and distributed by Presspoint. It also joined with Martindale-Hubbell to start Newslinks, a web service to help law firm marketing.
These and other ventures indicated the holding company and its various subsidiaries were pressing ahead to stay competitive in the rapidly changing legal publishing field. An increasing number of law firms used the Internet to share professional papers and articles on general and specialized areas of the law. Such decentralization was a major trend in the Information Age or what author Alvin Toffler called the Third Wave. Dealing with such general changes was one of American Lawyer Media Holdings’ major challenges as it prepared to enter the new century and millennium.
American Lawyer Media, Inc.; National Law Publishing Company, Inc.; Professional On Line, Inc.; The New York Law Publishing Company; NLP IP Company; PPC Publishing Corporation.
Harcourt General, Inc.; Reed International PLC; Thomson Corporation.
“Brill, Steven,” Current Biography Yearbook 1997, New York: H.W. Wilson Company, pp. 42–44.
Brill, Steven, “‘Ruining’ the Profession,” American Lawyer, July/August 1996, pp. 5–6.
Brown, Rich, and Steve McClellan, “Court TV’s Steve Brill: Witness for a Nation,” Broadcasting & Cable, February 6, 1995, p. 43.
Burgi, Michael, and Jeff Gremillion, “In Test of Will, Ted Beats Brill; Court TV Founder Steps Aside As Turner Nixes Buyback Plan,” MEDIAWEEK, February 24, 1997, p. 6.
Calabresi, Massimo, “Swaying the Home Jury [the Menendez Brothers’ Trial],” Time, January 10, 1994, p. 56.
Carmody, Deirdre, “A Magazine’s Trials, Now on Home Video,” New York Times, February 24, 1992, p. D8 (late edition).
Cole, Lewis, “Court TV,” Nation, February 21, 1994, p. 243.
Conant, Jennet, “Don’t Mess with Steve Brill,” Vanity Fair, August 1997, pp. 62, 64, 66, 69, 73–74.
Finkelstein, James A., “Publisher’s Letter,” National Law Journal, September 19, 1983, p. 12; September 24, 1984, p. 12; and September 26, 1988, p. 12.
Frum, David, “Lawyers in Cyberspace,” Forbes, October 25, 1993, p. 56.
Galanter, Marc, and Thomas Palay, Tournament of Lawyers: The Transformation of the Big Law Firm, Chicago: University of Chicago Press, 1991.
Gremillion, Jeff, “Publishing Top Lawman,” MEDIAWEEK, November 10, 1997, p. 26.
Kaback, Hoffer, “Behind the Art of M&A with Bruce Wasserstein,” Directors & Boards, Spring 1999, p. 16.
Minerbrook, Scott, “It’s Court Time,” U.S. News & World Report, July 15, 1991, p. 16.
Morris, John E., “The Global 50,” American Lawyer, November 1998, pp. 45–49.
Mullich, Joe, “Jury in for Extended Net: Counsel Connect Services 40,000 Lawyers Looking to Confer with Co-Counsel, Clients,” PC Week, July 14, 1997, p. 25.
Schlosser, Joe, “Bigelow in for Brill: Interim Court TV CEO Says He’s Considering Many Options,” Broadcasting & Cable, March 17, 1997, p. 16.
Schrage, Michael, “Steve Brill,” MEDIAWEEK, November 20, 1995, p. IQ14.
Turner, Richard, “Sudden Exit of a Would-Be Mogul: Tough Editor Steven Brill Gives Up the American Lawyer and Court TV,” Newsweek, March 10, 1997, p. 74.
—David M. Walden