Law.com pulls out of UK after cuts demand

INTERNET: Backer Softbank Capital retreats as IT expert claims 'investors have lost faith in that market'US-based legal Web site Law.com has shut down its UK arm only eight months after its launch, becoming the latest victim of a lack of investor confidence in Internet ventures.It is understood that the closure was prompted by a failure to secure second-round funding when Softbank Capital, which has invested $50 million in Law.com, pulled out.The other backer, private equity investment fund US Equity Partners, remained in the picture but is understood to have demanded crippling cuts on the UK branch.

These made the operation unworkable.US Equity Partners is funded by Wasserstein Perella & Co, which owns American Lawyer Media, the dominant US legal publisher.

Because of this relationship, Law.com has a five-year licence to publish all content from American Lawyer Media.

But Law.com/uk failed to secure similar relationships with legal publications in the UK.

Law.com/uk offered legal news, black-letter law updates and practice area-focused content, as well as recruitment.

It had links with Smith Bernal's Casetrack and on-line CPD provider 2ENDS.

Visitors to the site will now be redirected to Law.com's main site.Bill Feid, Law.com's chief executive officer, said: 'Over the past year, we've learned a lot about what our clients in the UK want and about what they need to compete in today's crowded legal arena.

Since reapplying resources to build our application-based model, we have honed in on delivering our services more efficiently and cost-effectively.' Legal IT expert Delia Venables said Law.com/uk provided a 'great free service' and was a success in terms of hit counts.

However, people have lost faith in dot-coms, she said, and are asking to see returns on their money.

She added: 'It's difficult to actually generate any money because people expect to get things for free.' Fellow legal IT expert Charles Christian suggested that Law.com/uk had underestimated the competition from established players in the UK legal news market and overestimated the strength of its brand.

'It's a typical dot-com type disaster - not having a clearbusiness plan or revenue-generating plan and hoping for the best.

And investors have lost faith in that market,' he said.He also suggested that there was a strategic problem: 'They had a huge staff there.

They were paying over the odds and were just trying to catch up with established players from a standing start.

They just didn't really have a very clear business plan.'Law.com dismissed ten UK journalists and support staff, including lawyers hired to produce practice content, before Christmas.

UK managing director Julie Eskay resigned the same day, less than a month after the departure of Law.com/uk's editor-in-chief, Lucy Hickman, and assistant editor, Chris Dignan.It is understood that one legal journal had been considering legal action over what it contended was the unauthorised reproduction of its stories on the site.Anne Mizzi