Lee Smith builds empire (and 42,000 sq. foot facility) on state law letters. (Publisher Profile).

George Stephanopoulos traces his entire career--from Rhodes Scholar to Congressional staffer, Presidential aide, White House insider, author, and ABC network TV talking head--to a desire to find employment acceptable to his parents that allowed him to avoid going to law school.

A different political faith, but something of the same mindset, animated M. Lee Smith in Nashville. Smith became involved in state Republican politics while at Vanderbilt and Vanderbilt Law School. Following that, he worked in Washington for Senator Howard Baker and on the staff of a GOP governor back home in Tennessee. When the governor left office in 1975, Smith found himself at a crossroads.

"If I'm ever going to practice law, it probably should be now," he thought. "I've been out of law school for six and a half years." Instead, he launched a newsletter on Tennessee government and politics and then a second title aimed at attorneys covering new developments of interest to lawyers in the state.

"I picked those subjects--politics, governance, the law--because they interested me, not with any plan to be a newsletter publisher and build a company. Besides, I figured, if it didn't work out I could always begin to practice law."

Then, in 1979, he acquired a printing and mailing operation. The company had been owned by two elderly ladies who were ready to sell out and retire, and it seemed a natural fit.

The big change in Smith's operation came in 1984 when an attorney in Chattanooga launched a Tennessee employment law newsletter. Smith contacted him to say, "This [publishing newsletters] is what we do; maybe we could work together," and he got the answer, "Come and see me. I do the research and editorial and my wife has been handling all the business side and had no idea what she was 'volunteering' for."

"The light went on--the alarm sounded"

Smith explained that the newsletter did well. He then found a law firm in Atlanta that was interested in producing a Georgia Employment Law Letter. It also did well and, at that point, Smith said, "The light went on--the alarm sounded."

M. Lee Smith now publishes state-specific employment law letter for all 50 states and the District of Columbia (each in conjunction with a local law firm).

The company also does a number of state environmental law newsletters, a few worker's compensation titles, and "one or two state health law newsletters."

With some ancillaries, the total number of titles now published is more than 100.

All of the titles, Smith said, are aimed more at the business community than specialists. The employment law letters are marketed chiefly to corporate human resources departments, the environmental letters to company environmental compliance officers, and so on.

Marketing

Lee Smith relies heavily on forced free trials. His description of their marketing reminds me of a Navy captain I worked for who described our command's mission as "similar to washing an elephant. A big job but not technically difficult."

Smith uses national lists and splits them state by state and sends basically the same offer to each with the appropriate state name. "It's administratively complex," Smith said, "but a lot less so than thinking of creating 51 different, separate promotional packages."

The internet

"We're like most newsletter publishers," Smith said. "We've thrown a lot of stuff against the wall, hoping some would stick. We've spent considerable time and money on this."

One major success they have had is the creation of the HRHero .com web site. Through it a subscriber to the Anystate Employment Law Letter can opt to become a member of the Employment Law Center.

As a "member," subscribers have access to a searchable database of all back issues, original source material, and some other products.

At present this is the price structure. The Anystate Employment Law Letter has an introductory price of $137 and a renewal price of $157. Law Center membership is $297 for the first year and $367 for renewals.

They market the Law Center memberships through ad supplements with the regular issues, some stand-alone mailings, and, most successfully, through in-house telemarketing. They have 16 customer service reps at present who handle up-sell calls for the Law Center membership, back-end renewal calls, and some other products. They have succeeded in getting the conversion rate for the employment law letters to 40 percent of all subscribers nationwide.

Printing and mailing services

The printing and mailing operation Smith acquired back in 1979 is also doing quite well. They have expanded it until they now have newsletter publishing clients spread from Manhattan to San Francisco.

"Our Tennessee location may give us some advantage in lower labor costs," Smith noted, "but the real difference is that with the advent of the electronic transfer age, it really doesn't matter a bit whether your printer and mail house is five blocks or 1500 miles from your office."

The future

Smith called the forecast for the coming three to five years "as murky as I have ever seen it in my 25+ years in the business. I'd guess that anyone who thinks they see more clearly probably doesn't.

"One thing I can say, as a printing and mailing vendor," Smith observed, "despite the forecasts of doom for the print newsletter we began hearing about in 1996, whatever the future may hold, newsletter publishers are doing more printing and mailing than they were six years ago."

5201 Virginia Way, P.O. Box 5094, Brentwood, TN 37024, 615-373-7517, fax [phone], www.mleesmith.com.

RELATED ARTICLE: Online revenue: go with your strengths

In the accompanying Publisher Profile of M. Lee Smith, he says that regarding his efforts to generate online revenue his "upgraded" subscription service, the Employment Law Center, is doing quite well. For additional fees, subscribers may upgrade to a membership in the online Law Center. An added benefit is that, traditionally, membership programs draw higher renewal rates than plain-vanilla subscriptions.

Like Smith, other publishers have found online revenue by expanding their current offerings--instead of creating whole new models--by offering memberships and even professional development courses.

Online newsletter publisher Larry Chase is instituting an "e-class" on How to Start an. Email Newsletter. He plans to make it "expensive" (NL/NL 3/31/02).

Harvard Business School Publishing similarly began an online, self-service, refresher course for managers. Manage-Mentor offers 33 topics (for example, managing crises, negotiating, leading and motivating). Prices vary according to the size of the participating organization. More than 500 corporate sites have purchased the system.