On Monday, Clio, a 17-year-old Canadian law firm management software company, announced that it has agreed to acquire vLex, a 26-year-old legal data intelligence platform, in a $1 billion cash-and-stock deal.
The announcement comes about a year after Clio’s massive $900 million funding round, which nearly doubled the Vancouver, British Columbia-based company’s valuation from $1.6 billion in 2021 to $3 billion.
vLex, which was largely bootstrapped until it was purchased by private equity firm Oakley Capital in 2022, has been a highly sought-after asset, according to Jack Newton, CEO and founder of Clio.
Harvey, the AI-native legal tech startup, attempted to purchase vLex a year ago, but the acquisition didn’t come together, as reported by The Information last July.
vLex is a valuable property because its database of legal documents can greatly improve AI models for lawyers.
“Data is one of the only long-term defensible competitive moats a company can have in the space,” Newton told TechCrunch.
vLex competes with the Thomson Reuters-owned legal database and LexisNexis. The acquisition comes shortly after Harvey announced a partnership with LexisNexis, aiming to enrich Harvey’s AI with LexisNexis data.
With the acquisition of vLex, Clio, which provides law firms with time-tracking, invoicing, and electronic payment tools, is now effectively stepping into the practice of law itself.
Over the last few years, vLex has built Vincent, an AI model built on top of the company’s legal content database.
“AI is going to drive a convergence of what have historically been distinct categories of software: the business of law and the practice of law,” Newton said. He added that Clio’s clients in the small and medium law firm segment will now have access to Vincent’s AI capabilities.
In addition to announcing plans to acquire vLex, Clio said it has reached $300 million in annual recurring revenue (ARR).