Industry GreedI have been monitoring D&D from an investment standpoint and it looks great to see rising revenues, however I am not convinced that the revenues are sustainable from first hand knowledge.
I have seen first hand what Dye and Durham is doing with legal fees and it is not sustainable in my opinion. In Alberta we paid $30 per real estate transaction (yes an automated transaction) just over a year ago. D&D bought the software company and jacked the price up to $90+ per transaction. That move ticked off the entire legal sector, viewed as unfair and unethical. The cost is passed onto the client that pays the bill. The lawyers will defend the market and the clients dollars. Firms previously considered dropping the service as there are comparable products for less than $30 per transaction. Not quite as good as Unity, but probably where D&D legal / real estate was a couple years ago...more than good enough. D&D just jacked up fees per transaction to $220 per use this week.
Greed is not sustainable in a sector where the providers do not have a 100% moat and control of the marketplace. The fees better be high at this time as the customer retention is likely about to drop off a cliff. In fact, the legal sector has no choice but to swtich software providers as the market is competitive and an extra $200 per real esttae trasaction is enough to lose the sale to a firm on the more cost effective software. Other firms have already migrated to the sub $30 option.
I predict the revenues for the real estate software will spike for a bit. Shortly thereafter, the amount of transactions processed will drop off of a cliff. There are other options for software support. $90 per transaction, or 200%+ increase was not enough for D&D! Greed will get the best of them.
If you are going in increase fees 600%+ within about a year, you should make sure that you control the market and no alternatives exist. The firm has to remain competitive and the client who pays the bill deserves fair treatment and fair charges.