Photo: Shutterstock

On Jan. 8, legal technology software provider Onit Inc. announced it has received a $200 million investment from K1 Investment Management, a California-based private equity firm with a history of backing legal tech companies.

Onit co-founder and CEO Eric Elfman said his company will use the investment to add more features to its host of legal tech products to make them a one-stop-shop management workflow provider for legal departments.

What's more, part of the $200 million investment could be used for acquiring other companies, Elfman added. “There are M&A opportunities for us as an acquirer. [The investment] gives us a bag of money to think about that more strategically.”

Currently, Onit provides enterprise legal management software to help legal clients manage e-billing, alternative fee arrangements and their vendors, and a contract management solution that helps them draft and manages contracts, among other tools.

While recently evaluating investment offers, Elfman said he wanted a “different type of money behind us.”

“I chose K1 because I trust them and because they are aggressive,” Elfman said. “This private entity is about sitting in the boat with me, growing this with me.” He added that K1 has the expertise to grow companies with expansion ambitions.

Onit joins a host of other legal software companies that K1 has invested in. “Onit is the most recent example of us continuing to invest in the legal vertical, be that working directly with the Am Law [or] legal departments in Fortune 500,” said K1 founder Neil Malik. “We think it's a market that's been neglected by many technology providers and is very slow to innovate with incumbent vendors.”

In 2017, K1 backed the merger of legal document providers Litéra Microsystems and The Sackett Group into one entity. Previously, K1 has invested in e-discovery provider Zapproved, according to a press statement. 

Onit's announcement comes after a 2018 that saw business-side legal technology secure impressive investments. In June, litigation technology and e-discovery provider Everlaw landed $25 million, and by July Exiger had obtained an $80 million investment.

What's more, consumer-side legal technology, such as LegalZoom and Atrium, have garnered investments as well, shoring up some doubt that investors may be apprehensive in investing in the heavily regulated legal industry.

But K1's Malik said such regulatory concerns are served, and not hindered, by technology. “I would say that the regulatory aspect and customer needs are wonderfully well-suited with the technology to address those problems.”