Legal technology deals and investments stayed on a fast track in 2019 as the sector becomes increasingly relevant to how Big Law firms and corporate legal divisions operate.
Legal tech investments flew past the $1 billion mark by the end of the third quarter. It hit that mark for the first time the year before.
Several significant mergers and acquisitions also were announced in 2019, another sign of legal tech’s maturation as a market sector. Perhaps chief among them: EY’s purchase of legal managed services company Pangea3 for an undisclosed amount. It’s a deal believed by some to be one of the most expensive legal tech buys of all time.
Some key legal tech investments, acquisitions, and other nuggets from 2019:
Beyond a Billion: In 2018, legal tech investments broke the $1 billion mark. But that figure was topped in 2019, with $1.23 billion in funding by the end of third quarter alone. Another sign of market maturation: In 2018, half of the billion-dollar figure was due to one $500 million investment into Legal Zoom. This year, a wider array of companies benefited.
Elevate’s Buying Spree: Law company Elevate in early January announced it had purchased Halebury, the U.K.-based “NewLaw legal resourcing firm.” Later that month, the company announced it had acquired Yerra Solutions, which serves “the operational and technology needs of in-house legal and IP, eDiscovery, investigations and compliance organizations.” Four days after that, Elevate announced its purchase of Cognatio Law, a Hong Kong-based “flexible lawyering” and legal consulting business. These buys came after two additional vendor purchases in 2018—and were followed by the news in June that Elevate, which had recently received $25 million in private equity funding, was aiming for a public stock market listing in 2021.
Notable Investments: Four of 2019’s largest legal tech investments also were among the most notable. In January, K1 Investment Management announced it had invested $200 million into Onit, a business enterprise software company that markets to corporate legal departments. In September, the Canadian law practice management software provider Clio received $250 million in Series D venture capital funding. And two tech-driven litigation finance companies received significant boosts, both announced in September. They included Legalist, which received $100 million, and Validity Finance, the recipient of $50 million, which was added to the $250 million raised in 2018.
Sign Here, Please: Companies that sell e-signature technologies—which can instantaneously execute contracts and thus are of keen interest to legal departments and law firms—had a moment in 2019. In January, the file hosting service Dropbox agreed to purchase HelloSign, which provides digital signatures for contracts and other documents, for $230 million. A couple months later, the cloud-based e-signature company eversign acquired Docracy, an open platform for crowd-sourced legal documents, for an undisclosed amount.
Reynen’s Progress: The legal tech “app store” Reynen Court, which boasts support from scores of different legal tech vendors, in April announced it had added six new members to its law firm consortium, including Davis, Polk & Wardwell; Debevoise & Plimpton; and the London-based “Magic Circle” firm Slaughter and May. That brought the group to a total of 19 prominent U.S. and U.K. firms. Then, in August, Reynen launched in beta mode as the app prepared to go wide by selling vendors’ wares to law firms and corporate legal departments.
EY’s Big Move: The Big Four accountancy EY in April announced its intention to acquire the legal outsourcing business Pangea3 from Thomson Reuters Corp. Pangea3 has 1,000 professional staff in eight offices, and markets to in-house counsel and law firms in the U.S. and around the globe. The mega-purchase followed EY’s acquisition of Riverview Law, a technology focused, U.K.-based alternative legal services provider, in 2018.
Leading a Full Lifecycle: In May, legal tech provider Intapp purchased OnePlace and its client relationship management software. Following the acquisitions of gwabbit in April, and of DealCloud in 2018, the OnePlace deal was a key piece in helping Intapp provide what it called a “unified client lifecycle solution” for law firms and other professional services businesses.
Money In, Money Out: Also in May, in the wake of the news of its $200 million investment, Onit, which offers e-billing and contract management solutions, announced it had acquired SimpleLegal, a legal operations platform that includes legal spending tracking.
Two for One: Document drafting and management software company Litera Microsystems acquired its competitor Workshare in July. The following month, it purchased Doxly, which produces transaction management systems primarily for the AmLaw 200 U.S. law firm market. The buys advanced Litera’s goal of creating a consolidated platform to appeal to legal market customers often wary of trying to use too many different vendor programs at the same time—a growing trend in legal tech.
ILTACON’s New Record: The International Legal Technology Association (ILTACON), which sponsors one of the largest annual legal tech conferences in the U.S., drew more attendees this year than ever to its August confab at Disney World—about 1,850. That number included representatives from two dozen countries and more than 800 first-time attendees.