Nearly 30 years ago when the legal profession was temporarily immobilised by postal strikes, the Hays DX document exchange service began.

It now generates more than 16 million profit each year.

So why, asks Lucy Hickman, is it up for sale?

Formed in 1975 when the legal profession was practically immobilised by national postal strikes, Hays DX's document-exchange service is a mainstay of most law firms' processes, handling more than a million pieces of business mail each day - half of them generated by lawyers.

But despite raking in more than 16 million in profit each year and having just been awarded the Queen's Award for Enterprise Innovation 2004 - the business equivalent of the New Year's honours - parent company Hays last month put the service up for sale.

However, DX marketing director Keith Maple says little is expected to change - and job losses are unlikely to be on the cards - after the sale.

He says: 'Hays wants to sell the DX part of the business and concentrate on being a personnel company.

It has not yet clarified how this is going to happen, but whatever happens, we will follow the same strategy.

We have a unique platform with a good infrastructure in place.

Anyone who comes in would be following our expansion plans.'

Employing more than 1,300 people - plus around 850 couriers on a contractual basis - DX has seen a massive expansion in the past five years and now has members from most professional services organisations such as banks, insurance companies and accountants.

Last January, DX was given a licence to offer postal services and now provides services that enable items to be tracked throughout the network with notification of delivery and money-back guarantees, as well as mail delivery before 8am to city centres.

DX can now also deliver members' mail direct to the doors of non-member businesses.

Mr Maple says: 'I have been here about five years and when I first came in, it felt a bit like a cottage industry that had just gone mad because it had grown so quickly.

'Since then we have spent a lot of time and money on new technology and systems to ensure the standard of service is maintained.

We are going to continue doing this.'

Around 97% of the UK's law firms are members of DX.

However, the service is not without its critics.

Andy Freeman, facilities manager at City firm Berwin Leighton Paisner, says: 'It's cost effective and it's a fairly reliable service, although since it got bigger, it's not as good as in the early days.

Still, it's no less reliable than Royal Mail.

The difference is, people tend to expect problems with Royal Mail and don't say anything, but if something goes wrong with DX, they complain.'

Bernard Barry, facilities director at City firm Eversheds, says: 'It was a good alternative to Royal Mail, particularly a few years ago when there used to be postal strikes all the time.

There is certainly a cost benefit from using it.

'Like all services, you get the occasional problem - we had a problem with mail to our Newcastle office for a couple of months - but mail is the lifeblood of our business and most lawyers write most regularly to other lawyers, so DX has a captive audience.'

A spokesman for DX points out that the volume of mail going through its network continues to grow year-on-year.

'This suggests that more businesses than ever are relying on the DX to send their mail.

It is a position that we want to maintain and, as the market becomes ever more competitive, we take very seriously the need to deliver high levels of service and value to our customers.

To that end, all of the services centres in our network are now all fully automated - an investment of 22.5 million, starting in 1999.

As well as improving the speed of delivery, the technology gives more accuracy of sortation.'

But Mr Barry, whose firm sends around 3,000 items through DX every day, adds: 'If you know that you need to get something to a recipient the next day though, we wouldn't use DX - even with the tracker service DX offers which is supposed to be guaranteed.'

The DX spokesman explains that their services do not in fact guarantee next-day delivery, although the service standard is next-day delivery and they aim to deliver by 9am to all exchanges.

However, the tracked DX service is designed to give DX and its customers more visibility of deliveries and there is a money-back guarantee for late deliveries to the members' box.

Mr Maple explains: 'The complaints that we get in are of the level you would expect for the number of items we deal with - which is about one million per night.

It's not a 100% guaranteed service because of the volume we handle.'

Both facilities heads concede that DX is fairly responsive to complaints and Mr Freeman - whose firm sends out around 400 items through DX every day - says the company's representatives are willing 'to get their hands dirty' in a bid to solve a problem with the service.

He says: 'You got the impression that there was tension between the reps and the operations people.

We tried sending all our mail through DX at one time - using its total mail solution service - there were frustrations from the reps towards the operations people because of the problems we were having.

The DX spokesman says: 'We are not aware of this, but we would be happy to investigate any specific instance and respond accordingly.'

It seems that any problems are historical.

Mr Freeman says: 'We don't use that service any more, but at least the reps were willing to be hands-on in trying to resolve the problems.'

There are now 500 new users of the total mail service and that 'we have accelerated our investment in the network and opened a customer support line to respond rapidly to specific customer issues', the DX spokesman says.

But do law firms have any real alternative to DX in England and Wales? Although under last year's opening up of the mail industry, which gave several companies such as TNT licence to launch document-exchange services, Mr Maple says it is unlikely to happen any time soon.

He says: 'Because we specialise in business-to-business mail, we have no real competition on the mail side apart from Royal Mail.

'Although companies like TNT now have the right to set up a document-exchange service, they have no intention of setting one up.

They have other fish to fry.

'The issue is, you need to have enough members to make it work.

It's a bit like being the first person with a phone: there's no real point if there's nobody else to talk to.

The legal profession is happy with DX - it doesn't want another system.'

Mr Freeman says: 'We would listen if someone did come along but I'm not sure how it would work with DX because it's getting bigger and bigger and has so many members - I don't see how someone new in the market could compete.'

One thing some law firms do want see is a change to the pricing and payment method - bills are currently paid annually, up front, based on a number of factors, one of which is an estimate of volume usage.

Subscription levels are agreed on a customer-by-customer basis.

Mr Freeman says: 'It doesn't do much for your cash flow.

It comes in at around 20,000 per year for us.

It would be better, perhaps, if it could be paid quarterly.'

The DX spokesman says: 'We believe that the annual subscription based service allows us to offer the best value for money.

However, we have discussed quarterly billing options when suitably priced.'

But in Scotland DX does now have a viable rival company, Legal Post.

Legal Post was founded in January 2001.

The Law Society of Scotland, which backed the venture and was its first customer with the postal address of LP1, Edinburgh 1, now has a 20% stake in Legal Post.

Its managing director John Yorkston says: 'We have 79% of the market of solicitors using our services in Scotland, although many firms do not use one service exclusively.' The Scottish Court Service last year selected Legal Post as its document-exchange provider.

He says the company broke even last year and has since been trading profitably.

However, DX in Scotland is still thriving.

The spokesman says: 'The Scottish market is extremely important to DX.

While we are always mindful of local competition, we are confident that we are providing the Scottish legal community, and our customers throughout the UK, with the highest levels of service.

This is exemplified in our recent investment in a state-of-the-art service centre in Hillington (Glasgow).

In March this year, we also opened a new exchange in Glasgow, which services over 300 members.'

DX's managing director, Peter Brougham, is bullish.

He says he is delighted with the Queen's Award, but adds: 'We are not resting on our laurels.

'Technology has presented us with new opportunities to enhance our business mail services and we'll soon be announcing the launch of a new service that will provide a genuinely unique facility for our customers to use this new technology to deliver their information.'

Mr Maple refuses do be drawn on what this new service actually is but does hint that it will take into account the possible increasing use of e-mail, once e-signatures are introduced.

He says: 'E-signatures are not allowed at the moment - but we do have a solution for when they are, which we will be announcing later in the year.'

Certainly for the moment, despite the enormous increase in the use of e-mail, there is no drop-off in the volume of mail sent by law firms.

Mr Barry says: 'Many lawyers say that even if they send something via e-mail, they will still send a hard copy.'

Mr Maple says: 'Only time will tell how much the use of e-mail will affect mail.

It certainly isn't at the moment - the mail market is currently increasing at a rate of 3% per year - and there is a view that e-mail is becoming less acceptable because there are so many of them that it's hard to know which ones are important.'

Whatever its expansion plans, extending the DX service out of the UK or catering for consumers as well as business-to-business clients are not on the agenda.

Mr Maple says: 'The market will open up and become more competitive in the next three or four years, and although we will carry on rolling out new products, we will continue to concentrate on business to business.

We have no intention of going into the consumer market.

'We want to stay focused on the UK market.

It takes your eye away from what you're trying to be if you try and expand too much.

Other legal systems, like France for example, are so different that the system would not be easily replicable anyway.'

But DX will also need to watch its back for any players who try and move in on the domestic market - following the pattern of Legal Post's success in Scotland.

Lucy Hickman is a freelance journalist