The Bureau Of National Affairs, Inc. Business Information, Profile, and History

Company Perspectives:

BNA is an employee-owned company that provides professionals in business and government with timely, accurate, and objective information enhanced by intellectual effort, application of technology, and superior service to the customer.

History of The Bureau Of National Affairs, Inc.

The Bureau of National Affairs, Inc. is a leading publisher of print and electronic information and is the oldest privately held, wholly employee-owned company in the United States. Its products include more than 200 news and information services, specializing in reporting on public policy and regulatory developments in business, labor relations, law, health care, economics, taxation, environmental protection, and health and safety.

Early History: 1929-46

Journalist David Lawrence started the Bureau of National Affairs (BNA) in 1929 as a subsidiary of his U.S. News Publishing Company. At that point, BNA focused on patents, trademarks, and copyrights, publishing a series of bound volumes containing the text of court and regulatory decisions on these matters.

In March 1933 Lawrence ended publication of his newspaper, the United States Daily, and relaunched it as a weekly newspaper that he called USNews. At the same time he reorganized and expanded the products of BNA. That year, BNA began publishing two weekly information services. The first, Patent, Trademark and Copyright Reports, provided the text of decisions on a weekly basis. That information was bound into volumes quarterly, which led to the service being known as Patents Quarterly. The second weekly service, U.S. Law Week, gave clients the complete text of all opinions, and a journal of the proceedings, of the U.S. Supreme Court along with digests of major decisions from lower federal courts, state supreme courts, and federal regulatory agencies.

The news services brought money into the publishing company, as clients paid in advance for a year's information. However, Lawrence had a lot of printing equipment sitting idle, so in 1937, after the Supreme Court decreed that the Wagner Act (which recognized the right of unions to organize and bargain collectively) was constitutional, he introduced Labor Relations Reporter (LRR), covering developments in the growing field of labor law. John Stewart, who would become president of BNA and write its history, joined the editorial staff of Labor Relations Reporter in 1939.

The same year he started LRR, Lawrence also made a proposal to Congress's Temporary National Economic Committee to deliver free copies of the complete transcript of the previous day's proceedings to Committee members and staff. For anyone else interested in the Committee's actions (major corporations, banks, and investment companies), BNA provided overnight delivery of the printed transcript for $25 a week. The service quickly had 2,000 subscribers, bringing in $50,000 each week.

With that cash flow Lawrence made USNews into a weekly news magazine in 1940, to compete against Time and Newsweek. He also introduced a series of daily reports from BNA aimed at the business community to provide in-depth coverage of activities in Washington. The first of these, launched in November 1941, was Daily Labor Report. This was quickly followed with reports on industrial commodities, agricultural commodities, oil, and taxation and finance.

BNA's most popular service during the war years was Price and Production Controls, providing full coverage, in a loose-leaf, indexed format, of, to quote Stewart, "every official document relating to price controls and controls on industrial production." The service was so important that the government gave it an unlimited paper quota, and its publication made BNA the largest private user of air mail and special delivery during World War II. By the end of the war its contents filled 129 loose-leaf binders.

During 1945 Lawrence consolidated all of BNA's daily reports except Daily Labor Report into a single publication, Daily Report for Executives, hoping there would continue to be a peacetime market for the information. Price and Production Controls ceased publishing when the unionized printers refused to work overtime. Lawrence incorporated the printing operation as a corporate subsidiary and began looking for a buyer. His publishing company also introduced a new magazine, World Report, to cover world affairs as USNews did at home.

In October 1946 Lawrence invited five editors from BNA to buy the operation for $600,000 with $10,000 down and the balance to be paid over eight years. BNA's tangible assets, according to John Stewart, consisted of "its inventory of books, mainly reference volumes for PQ and Labor Relations Reporter, binders and pages in stock to fill new orders for loose-leaf services, and some pretty beat-up office equipment and furniture. We would get all accounts receivable on the date of sale, but none of the cash. We would be liable for fulfilling all subscriptions on the books." Returning from the meeting, the five men agreed that the ownership of the new company should be open to everyone at BNA, though as Stewart recalls, "no one can tell you whether we agreed to that idea because we were idealists or because we were chicken, looking to spread the risk."

In setting up the plan for employee ownership the organizing committee found in their research that most employee-owned publishing companies kept the decision-making power in the hands of top management. The folks at BNA wanted something different. The result: any employee, but only an employee, could buy stock (the original price was $10 per share). Stock could be purchased only with cash, there were no special stock options or bonus plans for executives and managers, and the officers and directors of the company would receive no payment for their official services.

A New Company: 1947-64

The Bureau of National Affairs, Inc. began operations on January 1, 1947. Dean Dinwoodey had been elected president of the company, which had 279 full-time employees and 49 who worked part-time. The Newspaper Guild was certified to represent the editorial employees. Money was tight that first year, with the business grossing less that $2.5 million. By the end of the year, however, the company had substantially more money than it had started with, although on paper, BNA showed a loss. By 1949, the company showed a net gain of $6,302.

With the onset of the Korean conflict in 1950, BNA responded to the demand for information about wage and price controls and production restrictions by incorporating coverage of them in the company's existing services. When the truce was signed BNA had increased the circulation of several of its services, and unlike its competitors, which started new publications to cover the emergency measures, kept most of those clients, since the services were not dependent on the Korean-related information. With the boost in business BNA opened the Guild contract in midterm as it had promised it would do should the company start making money, and agreed to the first pay increase.

One service that benefited from the strategy for covering the emergency measures was Labor Policy and Practice. Introduced in 1950, the service was actually a revamping of one begun during World War II to provide new supervisors with information about what they could do under the labor laws. The new service was broader, covering employer-employee relations in general, and it was a huge success. During the Korean conflict it expanded to include information about wage and salary controls. In 1969 BNA changed the service's name to BNA's Policy and Practice Series.

In 1951 the company declared its first dividend, $2 per share. As Stewart explained the size of the dividend, "It's probable the Board of Directors, nearly all of whom were substantial stockholders and none of whom had had a raise in pay in the past five years, figured they were entitled to some reward, and it's hard to blame them."

That year BNA tried its hand at producing a four-page, weekly newsletter. The company bought the newsletter, which had a circulation of a little over 11,000, from David Lawrence and renamed it Report for the Business Executive. BNA produced the newsletter for ten years, by which time the circulation had dropped to 7,500, and then sold it to another publisher.

During 1951 the company also made its first acquisition, buying the Pickley Corporation, which sold motivational posters to improve employee morale. The new subsidiary was renamed BNA Inc. and, after some false starts with posters the field reps were not able to sell, began making money by producing informational pamphlets for employees. Early topics ranged from why it is important to vote, to how to write to your congressional representative, to "The Social Security Fact Sheet."

Broadening its approach to employee communication, BNA Inc. began producing a series of pamphlets aimed at the front-line supervisor. The series, which dealt with such topics as discipline and giving instructions, began with one entitled "How to Listen." That led to the production of a ten-minute film, "Listen Please," and added a new field to BNA's operations, the making of management training films. Training activities eventually were placed in BNA Communications Inc., a subsidiary that produced and published multimedia training programs for corporations and government agencies, specializing in equal employment opportunity and health and safety.

Another new venture was launched in 1959, to publish Tax Management. The new service published a series of portfolios, each written by a tax expert and explaining a narrow segment of corporate taxation. The undertaking proved very expensive. Production costs were high and the fragmentary nature of the service was different from BNA's other offerings, making sales difficult. In 1962 the company reported its first loss since 1947, due largely to the nearly $1 million investment in Tax Management. Nevertheless, BNA stuck with the service, and by 1995, Tax Management, Inc. was a wholly owned subsidiary grossing $45 million a year and paying an annual dividend of almost $4 million to BNA. In 1964 John Stewart was elected president of BNA. He was one of the five editors asked by David Lawrence to buy BNA and served as president until 1980.

Expanding Services: 1965-80

BNA was interested in getting more involved with computers and electronic data processing. To that end, in 1965 BNA bought Fisher-Stevens, Inc., a New Jersey-based company that handled mass mailings for pharmaceutical companies to doctors, and had its own computer school. That relationship lasted for 20 years, when BNA sold Fisher-Stevens to IMS.

In 1970 BNA moved into the developing field of environmental and safety regulation. The new service, Environmental Reporter, covered current developments and provided the full text of court opinions and federal and state laws and regulations. As regulatory activities in these areas increased, the service was pumping out one or two binders a year. Librarians began complaining that they had no more space for the binders on their shelves, and secretaries were not happy about the amount of time they were spending filing the service's loose-leaf supplements. Health and safety in the work place also was receiving attention in Congress, which passed the Occupational Safety and Health Act (OSHA), creating the Occupational Safety and Health Administration within the U.S. Department of Labor. Keeping with its tradition of quick response to governmental action, BNA had a new service, Occupational Safety and Health Reporter, up and running the day OSHA went into effect.

On the organizational side of things, BNA shareholders amended the bylaws in 1971 to increase the size of the board of directors by one seat and to allow the election of one "outside" director, someone who was neither an employee nor a stockholder. In 1990 the board was increased to 15 members, with three seats reserved for outside directors. By the mid-1970s BNA was publishing some 40 services.

The 1980s: New Divisions, New Subsidiaries

William Beltz was elected president of BNA in 1980. The company was doing very well financially by the early 1980s, with its stock price at $16. In 1982 the privately held International Thomson Organization Ltd., one of the world's largest communications companies, offered $45 a share in a takeover bid for BNA. After 12 months of internal debate, shareholders voted to continue BNA's "commitment to employee ownership of the Corporation." That decision did not deter Thomson, however, which made another offering, this time for $65 a share. In 1984 that second bid was also rejected by the shareholders.

Even as the Thomson offer was being discussed, BNA was putting its cash to use. In 1983 Tax Management, Inc. established a new division, BNA Software, to publish software for accountants, lawyers, financial planners, and other tax professionals. Clients could now purchase software in the areas of income tax planning, estate tax planning and compliance, corporate tax and corporate foreign tax credit planning, sales tax compliance, and fixed asset depreciation reporting and management.

BNA also grew through acquisitions. Within a 12-month period beginning in March 1984, BNA bought four companies. Two of these had ties with BNA and went on to become important contributors to the company. Pike & Fisher, a small legal publisher, had been in business for nearly 50 years, and its president was BNA's first outside director. Its major revenues came from several information services covering radio law and from editing, on a contract basis, a news service on the Uniform Commercial Code. As a BNA subsidiary, Pike & Fisher continued and enlarged these services, particularly those dealing with communications law, and developed new offerings, including legal reference services in administrative law, criminal law, and ocean shipping regulations. It also published newsletters on the chemical fertilizer industry, a weekly trade and commodity report, and a newsletter for North American agrichemical distributors and dealers.

McArdle Printing Company had once been David Lawrence's Business Printing Company. The McArdle brothers bought it and began operating it as their own company in 1947. About 60 percent of their total business came from BNA in 1984. With both of these purchases, BNA kept the new subsidiaries intact, only naming someone from BNA as president.

The other two acquisitions did not prove as successful for BNA. The main product of Executive Telecom System, Inc. (ETSI) was an on-line information service for human resource executives. Although that seemed a logical fit with BNA's other databases in this field, after several years it was evident that there were not enough customers willing to pay for the service. BNA sold ETSI in 1992.

What excited BNA about its fourth purchase, Information Consultants, Inc. (ICI), was the full-text litigation support service for the legal profession it was in the process of developing. However, that service never met expectations, and after substantial losses, BNA liquidated ICI in 1987.

The 1990s

BNA continued to use new technologies to improve their services. For a company producing thousands of pages of information, CD-ROM was an obvious resource, and BNA took advantage of it. Among the BNA products published on CD-ROM were all the state laws and regulations regarding the environment, and a comprehensive reference service on intellectual property. The company was also marketing its products through such various on-line database vendors as LEXIS/NEXIS, Dialog, and Legislate. In 1996 BNA began offering electronic delivery of many of its services via Lotus Notes and the Internet.

However, technologies were not the only changes occurring. As health care became a major topic of national debate, BNA launched a variety of new services including Health Law Reporter, Health Care Policy Report, Managed Care Reporter, and Medicare Report.

In 1995 Paul Wojcik took over from William Beltz, becoming BNA's fourth president. In 1997 as BNA celebrated 50 years of employee ownership, Wojcik was named CEO, while keeping the title of president. That same year BNA acquired the Institute of Management and Administration, Inc. (IOMA). A privately held company based in New York City, IOMA published 32 newsletters with practical information aimed at lawyers, accountants, and human resource professionals.

As BNA moved into its second half-century, BNA employees and retirees still owned 100 percent of the company' stock. With all other major legal publishers having been acquired by multinational corporations, BNA remained the largest independent, U.S.-owned company in its field and the oldest private, wholly employee-owned company in the country.

Principal Subsidiaries: Pike & Fisher, Inc.; BNA Communications Inc.; BNA International Inc.; Tax Management, Inc.; McArdle Printing Co.; Institute of Management and Administration, Inc. (IOMA).

Principal Divisions: BNA Books; BNA Software.