business merger

Legaltech as an industry has seen rapid consolidation over the past two years, along with a slew of solutions slugged “end to end” or “innovative.” Yet one benefit of acquisitions sometimes overlooked in industry conversations is the access it could grant both parties in terms of clients.

Such was a benefit for AbacusNext in acquiring CPA software provider Commercial Logic, which will net the company access to a host of new clients. Among such clients are both accounting firms' legal groups as well as major law firms.

“Typically we're targeting companies for their intellectual property or technology product,” Alessandra Lezama, CEO at AbacusNext, told LTN. “What drew our attention to Commercial Logic is they're a very unique client.”

That uniqueness—that Commercial Logic's accounting firm clients have “very large corporate and legal groups” and that law firms' accounting departments use its software—provided an opportunity for AbacusNext to get its cloud-enabled legal and business management and accounting technology into new hands, Lezama said. “We can extend into the client base that Commercial Logic has been serving for years.”

AbacusNext has used acquisitions to beef up its product offering in the past two years. In November 2017, the company acquired HotDocs, integrating its document automation software under the AbacusNext umbrella. Earlier that year, AbacusNext acquired Results CRM, CloudNine Realtime and OfficeTools. In 2016, the company integrated Amicus Attorney, a company providing practice management technology.

AbacusNext's acquisition of Commercial Logic was announced on Dec. 21. Through the move, CommercialLogic users will be able to converge “all of their applications into a fully-integrated suite of cloud products,” Lezama said. Meanwhile, AbacusNext plans to upgrade CommercialLogic's existing software.

“We're acquiring this client base that has so much embedded in old technologies that don't integrate, that don't transition to the cloud, that we feel we can be of help with the suite of products we've designed,” she noted.

Lezama didn't disclose what law firms or organizations comprise CommercialLogic's user base. However, she noted that among legal organizations, about half are clients, while others are “entities you'd expect have fairly large corporate counsel groups.”

“Traditionally as an organization, AbacusNext has served the lower end of the market. So this is a tremendous opportunity for us to step into the larger size firm—Big Law, so to speak, and Big Accounting—and deliver the full suite of products that we've over the last four years built and integrated,” she added.

Lezama also identified an approach to how AbacusNext delivers its technology to these new clients, noting that the company “could literally create any kind of environment that could pop up literally as an add-on to their application and help them.” She called her approach “high touch,” in which AbacusNext “gets to know its clients,” along with its “technology pain points” and security vulnerabilities. To do this, it first conducts a business analysis with clients, then uses the results of the analysis to identify which products they would highly benefit from. From there, the company automates a process for data to flow from the client's existing application to the newly upgraded product.

Through the acquisition, AbacusNext leadership will lead Commercial Logic, though the acquired company will remain “autonomous in product delivery,” Lezama said. No employees have been laid off through the acquisition.