Stop Licensing, Start Selling: ALM’s Lesson in Growing Revenue
By: Christiana Sciaudone
ALM, a legal digital media company, has gone from licensing to selling direct. On the deals that have already transitioned, they’ve seen four to five times more revenue than before. The plan to revoke what they previously licensed in order to sell it instead has long been in the works and is turning into a solid boon for the New York-based company.
“We’ve probably got a similar opportunity with the kind of ending the licensing agreements,” Chief Executive Officer Bill Carter at ALM told AMO. “Those agreements will come to an end in 2025 so we’ll start selling them directly in 2026.”
And this growth in revenue will be good news for ALM because, as Carter told AMO, while ALM is always for sale, there is no pressure to sell.
ALM is backed by private equity firm EagleTree. It’s their oldest current holding, about to hit 11 years of ownership. The average holding period for buyouts among U.S. and Canadian private equity funds spiked to 7.1 years in 2023, up from an average of 5.8 years in the preceding decade, according to Preqin Pro. Mergers and acquisitions of all kinds have been on hold amid persistently high interest rates and sellers seeking valuations that are higher than buyers are willing to pay.
“We could sell in two years. I don’t know which route it will go, but I think because of what’s happening right now, and a couple other strategic things we want to do, if we didn’t sell for two more years, they’d be okay with it,” Carter said, referring to the shift from licensing to direct, among other things. EagleTree didn’t respond to a request for comment.
Carter expects revenue growth of 7% to 10% annually for the next three to four years, if not more. While they don’t release exact figures, Carter said the range is between $125 million and $150 million with “pretty high” profit margins. Getting there will include the shift to direct selling, the use of artificial intelligence and new products in development now.
Bringing Back Subscriptions
When Carter joined in 2012, it was time for a turnaround. About 95% of the business was legal, with 70% of revenue coming from print ads—and the writing was on the wall. Subscriptions represented about 20% of the business and dropping.
ALM’s legal business is now 90%-plus digital with a single print publication left, as well as some book publishing. About 65% of revenue comes from subscriptions, largely enterprise deals, and digital advertising is 20% to 25% of business. Events are 15% of business. Legal media comprises about 80%, and the rest is commercial real estate.
Subscriptions stay strong because they encompass an entire platform with news and data to help lawyers win business.
The Law.com platform offers news, while Law.com Radar provides litigation surveillance or access to new cases filed across the U.S., both on- and offline, which law offices can use to find new defendants and prospective clients.
Law.com Compass gathers data from firms and lawyers and allows users to delve into statistics and analysis, and also provides rankings for awards events held by ALM.
To expand subscriptions, ALM, which has about 400 employees, is adding sales reps to target firms with 30 to 100 attorneys across the U.S. after two years of focusing on the biggest companies.
Future business development includes building products with AI, including creating a business intelligence platform for legal professionals that keeps them updated on the industry by allowing them to ask natural language questions.
“It’s going to take a few years to get all the data unified and put it to knowledge graphs, but that’s how we’re looking at this business now, is, ‘Everything we collect, how do we use it as data to help these professionals answer business questions?’” Carter said.
That’s likely going to be a lengthy, possibly five-year journey to tag and properly classify the data. In the meantime, ALM will lean on its continually fast-growing subscriptions and events that have gained steam across the media industry.
And they’re patient. If the past eleven years have shown anything, ALM and EagleTree are not going to rush things.
