Our June financials are now closed, so I can update you on our financial performance through the first half of 2009.

As I have been reporting since the beginning of the year, this has certainly been a challenging period for us. On the revenue side, we have seen substantial declines in virtually every revenue category we track, with the only strong gains coming in the Public Notice Advertising arena. Otherwise, during the last three months we saw a continuation and, in some ways, a deepening of the trends we saw during the early part of the year. The biggest areas of concern continue to be Law Firm/Display Advertising, Seminars/Tradeshows and Books. Most of those declines against budget and last year reflect cutbacks by law firms in their spending, whether on advertising, conference attendance or legal information. Industry trends show that spending on legal services by corporate clients is dropping and that is having a big impact on the law firms themselves--on the numbers of people they employ as well as their willingness to invest in marketing, technology or information products like our books. In addition, our real estate division continues the trend of very weak advertising sales in that troubled sector.

The good news for us continues to be our successful efforts to reduce costs. Last winter I set a goal of finding $6 million in expense savings. As our revenue forecast declined during the spring, we looked for additional cost savings opportunities. At this point, I can report that we have found over $8 million in cost savings to offset those weaker revenues. Those savings come on virtually every expense line we track, and reflect the creativity and commitment of our staff. We'll continue to look for additional ways to save as the year progresses.

But there are places in our business where we are spending and investing, and I want to highlight those as well. When the recession ends, we need to be well-positioned within the legal information industry and ready to quickly build back our real estate brands and conference offerings. That's why we have increased our spending on new technology, and are continuing to invest in new product development. While we have virtually frozen our hiring, we have selectively brought in some new staff and, in oother cases, engaged outside consultants to help us move forward with key initiatives where existing staff just don't have the time to take on additional work. Tightening our belts for the short-run cannot mean that we stand still for the long run--we need to keep our eye on building value for the future.

Soon many of us will turn our attention to 2010 budgets (hard to believe, but true!). It seems that the outside world is not yet ready to declare an end to the recession, and we'll need to be very careful in our assumptions about both revenue growth and costs. We'll need to think in terms of alternate scenarios--what we'll do if the economy improves but also what we'll do if the economy continues on the current path or gets worse. And we'll need to carefully consider how best to exploit the new technology we are investing in, particularly with respect to the web. I'm looking forward to those budget discussions.

Let me know if you have questions about our current financial performance, our expectations for the future, and our strategy for both the short-term and long-term.