Legal-tech startups are catching the eye of Docusign and other big strategic investors. These 21 deals showcase how a huge consolidation wave is underway.

Strategics List

Summary List Placement

Venture capitalists have long been investing in promising legal tech startups: There were 124 deals valued at around $1 billion in the space globally, up from 84 deals valued at $500 million in 2018, according to data from PitchBook.

But VCs aren’t the only ones paying attention. As some of these startups move beyond the early stage big-league legal tech players like Clio and DocuSign have made strategic investments and acquisitions in the space, while others, like the Big Four accounting firms, may also be poised to get in on the action in the future.

Read more: Meet 10 investors who are pouring money into legal-tech startups, from Silicon Valley VCs to Big Law firms

Scott Mozarsky, who focuses on legal and compliance markets as a managing director at investment bank JEGI calls these types of investors “strategics.” He explained that the commoditization of legal services and increasing competition from the Big Four accounting firms, which have been expanding their legal arms, are two factors behind legal tech’s surging popularity among investors.

As much of the country’s workforce remains remote due the ongoing coronavirus pandemic, law firms have had to digitize all aspects of their business process, creating even more opportunities for startups that offer tech-fueled ways to streamline workflow and shed unnecessary costs.

Read more: These 9 legal tech startups are poised to take off as law firms look to cut costs and boost productivity, according to top VCs

Also fueling competition in the legal tech market are professional services firms that are introducing their own legal services to clients, like Deloitte Legal, which offers legal management consulting and legal managed services to clients, and KPMG’s Global Legal Services, which describes itself as a “strategic advisor” to in-house counsel. 

Ownership rules currently prevent non-lawyers from owning law firms — rules that are starting to change, beginning with Arizona in 2021 — so for now, companies are competing with law firms to offer some legal services with a focus on digital and automated innovation. 

Read more: Mega law firm Dentons has poached another FTI crisis communications pro as it looks to create a one-stop shop for clients

As more companies are vying to dip their toes in the legal market, Business Insider compiled a list of 21 successful legal tech startups that these strategic investors have acquired or invested in since 2018.

SEE ALSO: Meet 10 investors who are pouring money into legal-tech startups, from Silicon Valley VCs to Big Law firms

SEE ALSO: The CEO of Disco, a legal tech that sells cloud-based discovery software, walked us through a 20-page pitch deck the startup used to nab $60 million

SEE ALSO: Check out the 14-page pitch deck that a contract-editing startup used to nab $3.2 million from investors including DocuSign

Liveoak Technologies

Acquired by: DocuSign, an e-signature and cloud agreement company, in July 2020

Acquisition amount: $38 million

What it does: Offers tools like video teleconferencing, collaboration tools, and identity verification that enables parties to complete the notarization process online.

Seal Software

Acquired by: DocuSign in May 2020

Acquisition amount: $188 million

What it does: Uses AI to find, analyze, and extract data from contracts.

SpringCM

Acquired by: DocuSign in September 2018

Acquisition amount: $220 million

What it does: Generates documents, stores them in the cloud, and manages contract lifecycle processes.

BlackBoiler

Investor: DocuSign in its $3.2 million October 2020 round of funding

What it does: Automates the contract markup process using AI.

Read more: Check out the 14-page pitch deck that a contract-editing startup used to nab $3.2 million from investors including DocuSign

Clause.io

Investor: DocuSign in its $5.5 million Series A in June 2019

What it does: Creates “smart agreements” by verifying contract data in real time.

Pactum

Investor: DocuSign in its $3 million seed round in June 2020

What it does: Uses AI to automate commercial negotiations and contracts.

Read more: Walmart is about to let machines negotiate contracts with some suppliers, and it’s a glimpse into the future of supply chains in a post-coronavirus world

ClusterSeven

Acquired by: Mitratech, a technology company that provides legal and compliance software products to corporate legal departments and risk & compliance professionals in January 2020

Acquisition amount: Undisclosed

What it does: Monitoring third-party end user computer (EUC) applications like desktop programs and smartphone apps to help legal departments manage data-privacy risk.

CMPG

Acquired by: Mitratech in June 2020

Acquisition amount: Undisclosed

What it does: Improves corporate risk management, data privacy and information governance for risk, compliance and legal teams.

Tracker Corp

Acquired by: Mitratech in July 2020

Acquisition amount: Undisclosed

What it does: An immigration compliance software that helps companies and immigration law firms keep track of software as a service (SaaS) I-9, E-Verify, and immigration management solutions.

Acuity ELM

Acquired by: Mitratech in September 2020

Acquisition amount: Undisclosed

What it does: Provides SaaS e-billing, matter management, claims defense and legal hold products to small and mid-size corporate legal teams.

INSZoom

Acquired by: Mitratech in November 2020

Acquisition amount: Undisclosed

What it does: Immigration case management for corporations, immigration law firms, staffing specialists, and non-profit groups.

Allegory Law

Acquired by: Litera, a software company that provides clients with legal workflow and workplace technology, in August 2020

Acquisition amount: Undisclosed

What it does: Creates a cloud-based, one-stop shop for litigation teams to prepare for a case including litigation knowledge, case administration, evidence, witnesses, and case documents.

Bestpractix

Acquired by: Litera in June 2020

Acquisition amount: Undisclosed

What it does: Uses machine learning and natural language processing to help law firms and legal departments quickly create legal documents in a contract-drafting platform.

Levit & James

Acquired by: Litera in March 2020

Acquisition amount: Undisclosed

What it does: The legal software provider’s Best Authority product automatically finds and marks all the legal citations in a brief and generates a table of authorities.

DealCloud

Acquired by: Intapp, a firm management platform, in August 2018

Acquisition amount: Undisclosed

What it does: Provides cloud-based M&A deal management and client relationship management (CRM) software for investment banks and private capital firms. The acquisition allows Intapp to expand their legal tech offerings to financial institution clients.

Gwabbit

Acquired by: Intapp in April 2019

Acquisition amount: Undisclosed

What it does: Provides enterprise relationship management, relationship intelligence, and data quality management, enabling law firms to boost client relations.

OnePlace

Acquired by: Intapp in May 2019

Acquisition amount: Undisclosed

What it does: Provides CRM software for law firms and professional services, allowing them to manage follow-ups with contacts and tracking their work with members within the firm.

Lexicata

Acquired by: Clio, a cloud-based software platform that helps law firms manage cases and client relationships, in October 2018

Acquisition amount: Undisclosed

What it does: Manages client intake and boosts law firms’ client relationship management.

Documate

Investment: Won $100,000 through Clio’s Launch//Code developer competition in October 2020. Clio says the competition is its main method of investing in promising legal tech innovations. The winning company or business will design and develop an app that integrates with Clio’s API.

What it does: Automates legal documents. 

Tali

Investment: Won $100,000 through Clio’s Launch//Code developer competition in October 2018.

What it does: Offers hands-free time-tracking for lawyers.

Casetext

Investment: Won $100,000 through Clio’s Launch//Code developer competition in October 2019.

What it does: Provides lawyers with a more efficient legal research platform using AI.

Source: businessinsider
Legal-tech startups are catching the eye of Docusign and other big strategic investors. These 21 deals showcase how a huge consolidation wave is underway.