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Online innovations keep company atop fieldJun 03, 2012 (The Buffalo News - McClatchy-Tribune Information Services via COMTEX) -- The William S. Hein and Co. in Buffalo has been the world leader in its field for decades, but most people outside the legal profession have never heard of the quiet company. The business, which traces its roots back to the 1920s, has long been the world's largest distributor of legal periodicals. And due to some intelligent foresight, it has become the world's largest provider of an online image-based legal research database. How did Hein, a company that started as a reseller of legal texts and a legal book bindery, seamlessly transition to the 21st century and retain its industry dominance? "We were on the forefront on technology," said William S. Hein Jr., CEO of the company. In 1981, Hein teamed up with Buffalo State College students and created the first computerized subscription service for law review publications at libraries. In the early '90s, it began scanning its inventory and saving content on CDs. By the late 1990s, Hein had partnered with Cornell Technologies to create an online database of law journals. And in 2000, its site, HeinOnline, went live with 25 journals. "Even though we sell old books, I think we've been innovative," said Kevin Marmion, president of Hein. "Our philosophy is you should change yourself before somebody else forces you to change, so we've always been able to convert our own market." The move to digital has transformed all aspects of Hein's operations --its workforce, location and market --and solidified its leadership position. With traditional publishing, the family-owned business holds 60 percent to 70 percent of the nation's law library market. But with its online division, the company has tapped into the international market with subscribers in 150 countries, and increased its u.S. penetration to 100 percent at the nation's 200 law schools. "We probably wouldn't be in business today or we'd be in a difficult situation if we hadn't gone with online products," said Hein, whose father started the company in 1960. "HeinOnline has been huge for us; it's opened so many doors." HeinOnline began with 25 journals and it now boasts more than 1,600 and more than 4,000 library customers. The site boosted revenue to $33 million last year, and $34 million is forecasted for 2012. The 12-year-old site now accounts for 45 percent of the company's business and $15 million in revenue. "It's gone up every year," said Marmion. "it was 29 percent then 35 percent, 42. I wouldn't be totally shocked by the end of the year if we got awfully close to 50 percent of the business." For a company that thrived for decades with a manual labor workforce with its printing and bindery operations, HeinOnline's success has meant training and hiring workers with technical skills. The company has 85 employees. it's done more hiring, but downsized through attrition. For example, the company no longer needs 20 people to put millions of rolls of microfilm each year into envelopes. it now has just four computer programmers handling the digital files, and only a few to handle microfilm. Hein's booming digital archiving business is also bringing the company's presence in downtown Buffalo to an end. its three-story, 100,000-square-foot warehouse on Main Street in Buffalo has become unnecessary. Last week the company bought a $3.3 million, 66,308-square-foot, two-story office building in Amherst, next to Ellicott Creek and the university at Buffalo North Campus. The company's corporate operations will move to the new building in the fall. "We now have employees who would work in cubicles, not in a warehouse," Marmion said. The Amherst facility is wired with fiber optic cable to support the company's online operation, which has been based at Cornell university because the Main Street facility couldn't support it. Hein also wants to be closer to uB to recruit graduates with computer skills. The Hein company began in 1960 in William S. Hein Sr.'s garage in the Town of Tonawanda. Hein got his start in the legal publishing by working at the Fred O. Dennis Company, his uncle's business, when he was 12. The Dennis company was founded in the 1920s and primarily printed legal forms and other stationery for area attorneys. it later began reselling and then reprinting law books. Hein worked with his uncle, who raised him, for 27 years before opening a similar, competing business. "To this day, I don't know what happened between them," said Hein Jr., who took over the company following his father's death in 1976. "One said he was fired, and the other said he quit." In 1983 when Fred Dennis died, Hein purchased his company to add to two earlier acquisitions of book binderies and the company expanded its services, selling legal information to large research law libraries around the country. With the explosion of law schools in the 1970s, demand for its services increased and its profits soared. in the 1980s, microfilm conversion of old legal materials hit a high note. in 1998, Hein's purchase of the Fred B. Rotham Co. in Colorado, its major competitor, gave the company the rights to major law school journals, including those at Harvard and Yale universities. With that acquisition, the company embarked on creating an online website with Cornell. Hein's customers include the nation's law schools, top 400 law firms, u.S. Supreme Court, united Nations and the Labor Department. While other information services and databases exist, Hein doesn't have an industry rival with the singular focus on legal texts. "Nobody does the whole law package like we do; other companies do bits and pieces," Marmion said. The company credits its longevity and success to devoted employees and a family-centered work environment. Hein is the only employer Marmion has known. He joined the company when he was 16. His son also works for Hein, along with a third generation of Heins. The company still does $2 million in microfilm conversion and $1 million in reprinting, but its focus and future is HeinOnline. it plans to expand its content and penetration into the international legal market. "As much as we've changed, really we haven't because we still sell legal information to our customers," said Marmion, "and whichever way that market moves, it's our job to be a little ahead of the curve and help our customers get there. And that's what we're looking forward to." [email protected] ___ (c)2012 The Buffalo News (Buffalo, N.Y.) 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