Clio – a legal business operations company, and vLex – primarily a legal research platform, have finally sealed the deal. Clio has also bagged a lot more cash. But, as the dust settles they face some interesting strategic challenges and opportunities. AL explores.
Fundamentally we have two businesses that don’t on first appearances have a clear bridge between them. Legal research is at the heart of a lawyer’s daily work. Meanwhile, practice management is a laborious area where Clio’s software helps hundreds of small, medium and now some larger firms. Both super-useful. But, neither flow naturally into each other.
vLex has also added an ‘outer ring’ of legal AI skills that go all the way to M&A due diligence, but realistically it’s their legal research-related genAI capabilities, e.g. helping a lawyer to draft from info they have found in the platform, that will be used the most.
Meanwhile, Clio’s new cash – $500m equity and a $350m debt facility (i.e. $850m in total), can be used in plenty of new ways beyond growing the law firm operations side of the now combined company, e.g. via more M&A deals.
So, where do they go from here? Here’s some thoughts.
First, vLex is not Thomson Reuters or LexisNexis. Estimates online suggest its last independent revenue figures to be at around $45m at the top end – although the company has not publicly verified that. That total is a fraction of what TR and Lexis make globally on legal research.
Second, vLex as part of Clio, and even with all the extra money, cannot easily just buy up other large legal data providers to fill this out, at least that will move the dial in core markets. Why? Because there aren’t many left to buy in the US and UK, although they could go to Europe and Asia to widen things and pick up some smaller regional companies. But, would that help them to take the battle to TR and Lexis in the core American market…? Well, no. But, it would build out their legal data revenue.
