Connecting puzzle pieces

It is an undeniable fact: After years of specialization and disruption in the legal technology market, the pendulum is swinging back toward consolidation of businesses and services. More and more legal technology companies are joining forces to combine their products and services into broader, more integrated software packages. From e-discovery and secure cloud storage vendors to document management and legal research businesses, companies are melding their unique knowledge and skill sets—and their customer bases—to the benefit of themselves and their clients.

Just this year, legal research leader LexisNexis acquired Ravel Law, using the legal analytics startup's artificial intelligence technology to beef up its search capabilities and outcome predictions. E-discovery vendor Advanced Discovery acquired compliance and security specialist Altep, enhancing its risk assessment and incident response expertise. In addition, iManage expanded its document and email management offerings by acquiring RAVN Systems, an artificial intelligence developer.

This trend toward consolidation is no fad; expect to see more mergers and acquisitions as technology grows more complex and more specialized. However, many law firms and lawyers seem to worry about what will accompany these changes. How much will the products and services that they rely on change? How difficult will it be to get help from customer support while the service provider is undergoing a rebranding or internal staffing shift? Will their vendor be part of a merger?

The good news is that the new normal of consolidated services represents a great development for both legal technology companies and their clients. The three key reasons driving the move toward consolidation also represent the three key benefits offered to those merged companies' customers.

First, consolidation allows for improved and expanded services, growing the reach of legal technology companies and allowing them to leverage new technologies while providing a more useful and user-friendly integrated suite of software solutions. Consolidation also allows both companies and their clients to better manage their resources while saving time and streamlining communications. Finally, mergers allow smaller, discrete companies to expand their geographic range, covering more customers and aiding in global collaborations.

Improved and Expanded Services

The primary reason for the uptick in legal technology mergers is technology itself. Today, artificial intelligence applications, including natural language processing and machine learning, are increasingly capable. However, to work well, these systems must be precisely built and trained. Sophisticated technology like artificial intelligence and the disruptive nature of technological innovation itself have driven increased specialization.

With that specialization, many useful and novel approaches may be scattered across many companies, each solving a discrete problem. Thomson Reuters reported that between 2012 and 2016, global patent filings for new legal services technology increased by 484 percent. Consolidation permits these diverse businesses to leverage fully new technologies by bringing their work together. As with LexisNexis and Ravel Law, combining one company's existing service platform with another's artificial intelligence capabilities allows both to grow.

Not only do mergers and consolidations enhance the synergies between multiple technologies, but companies must also seek collaboration between legal service providers and nontechnical groups to build fully usable products. As Mark A. Cohen noted in his Forbes article, “Global Legal Tech Is Transforming Service Delivery,” effective technology must be built on an interdisciplinary effort. That should incorporate “an understanding of practice issues (what's important); business of law (operations designed to deliver services optimally); technology (how best to build it); and users (how to make tech user-friendly to provider/consumer and compat[ible] with existing tools).”

More importantly, these marriages of convenience benefit customers tremendously. Clients can obtain better wraparound services when multiple products are intentionally integrated. When companies merge, they can work together to ensure that their apps correctly talk to each other, minimizing or eliminating errors. This allows a seamless cooperation between different capabilities and a comprehensive platform that can address a complex and multifaceted process such as document creation.

These consolidated systems work better—together, and, more importantly, using a single integrated system reduces the time that lawyers and staff must spend climbing a learning curve. An interrelated suite of connected user-friendly software services allows clients to learn how the system works once and then apply that same understanding to every other component of the consolidated system. This minimizes disruption and both simplifies and expedites customer support and communications by bringing multiple teams under one roof.

Better Resource and Time Management

Everyone stands to save time and effort when companies combine their resources. Legal technology companies may be attracted to a merger by the prospect of growing their staff, their physical resources, and their attendant technical capabilities. In addition, mergers create significant time savings: by combining two companies' expertise to create a single elegant solution that improved product can make it to market faster than either company could have accomplished alone.

Also, clients save just as much time and effort as the companies themselves do. Working with a single vendor that can provide enhanced services is faster, easier, and less expensive than communicating with multiple diverse vendors that can each only provide a piece of the overall puzzle. Not only can customers' total costs be lower, but the predictability of those costs is also dramatically improved by working with a single consolidated vendor.

Clients also save time by using a consolidated technology service. As noted above, a uniform integrated platform minimizes the time that is spent learning how the system works or how to optimize results. In addition, setup time and downtime due to disruption or service replacement should reduce at the same time that vendor communications are streamlined.

Wider Geographic Range

Another consistent theme to the trend of legal technology company mergers is increasing geographic diversity. For example, shortly after Advanced Discovery acquired Altep, it merged with Millnet, a London-based e-discovery firm, expanding its reach from the U.S. to Europe, the Middle East, and Asia. Other mergers have created a cross-coastal presence for companies that previously were in a small local market. While communications technology and the global economy are breaking down walls between countries and regions, there are still important cultural and legal differences that affect how systems can and should work; a one-size-fits-all solution is unlikely to apply everywhere

This geographic expansion applies as much for legal technology customers as it does to the companies themselves. Having a multinational legal service provider allows law firms and corporate counsel to work with confidence all over the world, enhancing their capacity to create global collaborations. For clients navigating an increasingly interconnected market, knowing that their legal technology service providers have worldwide presence and expertise is critical to maintaining best practices—wherever they find themselves called to practice.

Consolidation Is Here to Stay

Legal technology companies are likely to continue rearranging themselves, merging and rebranding as they find new and innovative ways to work together. Fortunately, this is almost always a good thing for customers, who are likely to receive better, more comprehensive services while controlling costs and enabling their own geographic expansion.

 

Avaneesh Marwaha is the president and CEO of Microsystems. As president, Marwaha is responsible for leading Microsystems as it continues to grow in market impact and influence. In his prior roles, Marwaha served as chief operating officer of Nexonia and Keno Kozie. During his tenure, he was instrumental in each business's expansion to becoming multinational companies. Earlier in his career, he was a practicing attorney, general counsel and entrepreneur.

Connecting puzzle pieces

It is an undeniable fact: After years of specialization and disruption in the legal technology market, the pendulum is swinging back toward consolidation of businesses and services. More and more legal technology companies are joining forces to combine their products and services into broader, more integrated software packages. From e-discovery and secure cloud storage vendors to document management and legal research businesses, companies are melding their unique knowledge and skill sets—and their customer bases—to the benefit of themselves and their clients.

Just this year, legal research leader LexisNexis acquired Ravel Law, using the legal analytics startup's artificial intelligence technology to beef up its search capabilities and outcome predictions. E-discovery vendor Advanced Discovery acquired compliance and security specialist Altep, enhancing its risk assessment and incident response expertise. In addition, iManage expanded its document and email management offerings by acquiring RAVN Systems, an artificial intelligence developer.

This trend toward consolidation is no fad; expect to see more mergers and acquisitions as technology grows more complex and more specialized. However, many law firms and lawyers seem to worry about what will accompany these changes. How much will the products and services that they rely on change? How difficult will it be to get help from customer support while the service provider is undergoing a rebranding or internal staffing shift? Will their vendor be part of a merger?

The good news is that the new normal of consolidated services represents a great development for both legal technology companies and their clients. The three key reasons driving the move toward consolidation also represent the three key benefits offered to those merged companies' customers.

First, consolidation allows for improved and expanded services, growing the reach of legal technology companies and allowing them to leverage new technologies while providing a more useful and user-friendly integrated suite of software solutions. Consolidation also allows both companies and their clients to better manage their resources while saving time and streamlining communications. Finally, mergers allow smaller, discrete companies to expand their geographic range, covering more customers and aiding in global collaborations.

Improved and Expanded Services

The primary reason for the uptick in legal technology mergers is technology itself. Today, artificial intelligence applications, including natural language processing and machine learning, are increasingly capable. However, to work well, these systems must be precisely built and trained. Sophisticated technology like artificial intelligence and the disruptive nature of technological innovation itself have driven increased specialization.

With that specialization, many useful and novel approaches may be scattered across many companies, each solving a discrete problem. Thomson Reuters reported that between 2012 and 2016, global patent filings for new legal services technology increased by 484 percent. Consolidation permits these diverse businesses to leverage fully new technologies by bringing their work together. As with LexisNexis and Ravel Law, combining one company's existing service platform with another's artificial intelligence capabilities allows both to grow.

Not only do mergers and consolidations enhance the synergies between multiple technologies, but companies must also seek collaboration between legal service providers and nontechnical groups to build fully usable products. As Mark A. Cohen noted in his Forbes article, “Global Legal Tech Is Transforming Service Delivery,” effective technology must be built on an interdisciplinary effort. That should incorporate “an understanding of practice issues (what's important); business of law (operations designed to deliver services optimally); technology (how best to build it); and users (how to make tech user-friendly to provider/consumer and compat[ible] with existing tools).”

More importantly, these marriages of convenience benefit customers tremendously. Clients can obtain better wraparound services when multiple products are intentionally integrated. When companies merge, they can work together to ensure that their apps correctly talk to each other, minimizing or eliminating errors. This allows a seamless cooperation between different capabilities and a comprehensive platform that can address a complex and multifaceted process such as document creation.

These consolidated systems work better—together, and, more importantly, using a single integrated system reduces the time that lawyers and staff must spend climbing a learning curve. An interrelated suite of connected user-friendly software services allows clients to learn how the system works once and then apply that same understanding to every other component of the consolidated system. This minimizes disruption and both simplifies and expedites customer support and communications by bringing multiple teams under one roof.

Better Resource and Time Management

Everyone stands to save time and effort when companies combine their resources. Legal technology companies may be attracted to a merger by the prospect of growing their staff, their physical resources, and their attendant technical capabilities. In addition, mergers create significant time savings: by combining two companies' expertise to create a single elegant solution that improved product can make it to market faster than either company could have accomplished alone.

Also, clients save just as much time and effort as the companies themselves do. Working with a single vendor that can provide enhanced services is faster, easier, and less expensive than communicating with multiple diverse vendors that can each only provide a piece of the overall puzzle. Not only can customers' total costs be lower, but the predictability of those costs is also dramatically improved by working with a single consolidated vendor.

Clients also save time by using a consolidated technology service. As noted above, a uniform integrated platform minimizes the time that is spent learning how the system works or how to optimize results. In addition, setup time and downtime due to disruption or service replacement should reduce at the same time that vendor communications are streamlined.

Wider Geographic Range

Another consistent theme to the trend of legal technology company mergers is increasing geographic diversity. For example, shortly after Advanced Discovery acquired Altep, it merged with Millnet, a London-based e-discovery firm, expanding its reach from the U.S. to Europe, the Middle East, and Asia. Other mergers have created a cross-coastal presence for companies that previously were in a small local market. While communications technology and the global economy are breaking down walls between countries and regions, there are still important cultural and legal differences that affect how systems can and should work; a one-size-fits-all solution is unlikely to apply everywhere

This geographic expansion applies as much for legal technology customers as it does to the companies themselves. Having a multinational legal service provider allows law firms and corporate counsel to work with confidence all over the world, enhancing their capacity to create global collaborations. For clients navigating an increasingly interconnected market, knowing that their legal technology service providers have worldwide presence and expertise is critical to maintaining best practices—wherever they find themselves called to practice.

Consolidation Is Here to Stay

Legal technology companies are likely to continue rearranging themselves, merging and rebranding as they find new and innovative ways to work together. Fortunately, this is almost always a good thing for customers, who are likely to receive better, more comprehensive services while controlling costs and enabling their own geographic expansion.

 

Avaneesh Marwaha is the president and CEO of Microsystems. As president, Marwaha is responsible for leading Microsystems as it continues to grow in market impact and influence. In his prior roles, Marwaha served as chief operating officer of Nexonia and Keno Kozie. During his tenure, he was instrumental in each business's expansion to becoming multinational companies. Earlier in his career, he was a practicing attorney, general counsel and entrepreneur.