vLex Sale Creates New Market Challenges – Artificial Lawyer

It came as a surprise that it was Clio that bought vLex, but it’s not a surprise that vLex did a deal with someone, (see today’s news).

vLex, aside from Thomson Reuters, was the only other big legal data store that wasn’t ‘spoken for’ after Harvey did an alliance with LexisNexis. And of course, many people believe it’s just a matter of months before that becomes a full deal – although Harvey still has options.

Plus, the market rumours were that Harvey had tried to buy vLex previously – for its data, but the offer was not high enough, so the rumour goes. It looks like Clio, which has now grown into a huge company, had the cash and share offer to seal the deal.

Now, did Clio have to do this? No. It’s done very well as it is. But, with this deal it can become a player on a whole different scale – and take more of a share of the Big Law market, (as historically it has gained a lot of its revenue from small to medium scale law firms.)

Did vLex have to do this….? No. It could have built out its productivity tools and kept its data and carried on.

Did vLex likely have a lot of suitors and were its owners looking for a nice sale at a time of increasing valuations? 100% of course they were…..! Money talks, as they say.

What does this mean? Well, it’s a boost to Clio and takes vLex off the map for others to do deals with.

Now all eyes turn to Thomson Reuters and what they will do next.

Note: AL mentioned just a week ago that ‘no doubt proposals are going back and forth for other major potential deals’…..and there we go.

So, how long before:

Lexis seals the deal with Harvey? Or Harvey makes it 100% clear it won’t do such a deal?

And, Thomson Reuters seeks to buy another platform, e.g. Legora? Or likewise, Legora says ‘no way’ and carries on independently?

And lastly:

What happens to the legal tech market when everyone is using just four or five major companies for a big chunk of their legal research and productivity needs? What happens to the rest of the legal tech market….how do they stand out, how grow, how retain market share?

This in effect hints at the end of the Big Two’s huge dominance….it now suggests we will have a Big Three (i.e. Clio and vLex and a lot more growth and perhaps more M&A deals), the only question now will be if we see a Big Five (if Harvey and Legora stay independent and grow and grow….?) Or will it be a Big Four if Lexis and Harvey seal the deal?

The main issue now is how does this all consolidate?

Interesting times…

P.S. I have spoken to vLex a few times in recent months and got the feeling a big sale like this was not coming soon, which suggests this deal came fast,,,,or at least people not at the very, very top were unaware of it.

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