Earlier this month, litigation support services company Veritext announced it has acquired New York-based court reporting company David Feldman Worldwide (DFW). The price Veritext acquired DFW for was not disclosed, but the court reporting company will continue to operate under its DFW brand going forward.

“DFW is a well-known brand in the New York market and something we are going to keep and maintain for a very long time,” said Valerie Berger, senior vice president of product management & marketing at Veritext.

She added that under the terms of the acquisition, the “entire client-facing staff” will be retained at DFW and will operate in New York-based offices alongside other Veritext employees.

When asked about the impetus behind the acquisition, Berger highlighted DFW's strong reputation in the New York market. But she added while “DFW does help us grow in New York,” the acquisition was also driven by the court reporting company's “overall talent, brand and innovation.”

Katie Dodd, marketing director at David Feldman Worldwide, said the acquisition helps DFW expand their customer base and offerings and allows them to rely on Veritext's data security services, which is “going to help our clients and our internal offices.”

Berger noted that the court reporting space is not usually characterized by consolidations. In addition to many court reporting local companies, “there are probably two or three other large players, and frankly they are shrinking. They are not on an acquisition trail.”

But most M&As in the court reporting space today have “everything to do with the fact that in today's world, data breaches and security issues are becoming a concern for large law firms. And small companies just don't have the resources to invest in world class security,” she added.

Veritext's acquisition of DFW comes at a time when some legal technology innovators are seeking to disrupt the traditional court reporting service through the use of “on-demand” technology. Startup DirectDep, for example, launched in mid-2017, offering a cloud-based app platform through which attorneys can rate and schedule court reporters, similar to how consumers use on-demand cars service apps like Lyft or Uber.

Berger, however, believes that DirectDep and its ilk won't be disruptive in the space, noting that Veritext offers technology that allows attorneys to quickly schedule court reporters, and also provides vetted court reporters who can be trusted.

“At Veritext, we fully vet the credentials of our court reporters, and I can assure you that three lawyers rating a court reporter doesn't qualify for that,” Berger said.

Still, Berger does believe that the court reporting industry can be disrupted in the near future given the advancement of automated transcription technologies. “As the labor pool tightens, meaning there is more of demand for court reporters than there is a supply, for certain types of work where the stakes are lower, there might be a shift to alternative capture methods of recording and transcribing.”