From February 11th’s report of 2015 full-year and Q4 earnings results comes the news that TRI’s cash cow, Thomson Reuters Legal, reported an operating profit margin of 29.4% for 2015. That’s one percentage point higher than last year’s results. Propelling this increase is the high-margin legal solutions line of products and services. As US Print continues its death spiral and US Online Legal Information remains stagnant, Solutions grew revenues by 6%. There is reason to believe that the continued growth of Solutions likely will produce an operating profit margin of 30% by the end of 2016. Soon, too, Solutions will represent 50+% of TR Legal’s revenue. See graphics, below.
During the Great Recession, the Shed West era of collection development brought dramatic change to TRI’s balance sheet. From a high of 33%, TR Legal’s operating profit margin dropped to 26%. TR Legal shifted gears from being a publisher to being a legal solutions vendor that happened to have a large digital inventory of legal information. That is to say one of our three very expensive suppliers of legal information is coming out of the Great Recession no longer primarily focused on legal publishing. There will be consequences for the law library community. For one, I doubt many law libraries outside of the private sector participate in the solutions market. — Joe