The LexisNexis-Harvey announcement triggered widespread hubbub in the legal tech space — but just days later, Clio and vLex stole the spotlight.
Clio’s $1 billion acquisition of legal research platform vLex cements what many speculated to be the new reality of the AI arms race: it’s not enough to have the most powerful GenAI tool. You need the legal content library to match.
After the LexisNexis-Harvey alliance and Thomson Reuters’ acquisition of Casetext for $650 million in 2023, Clio’s news signals the third such union of software with legal content. Thomson Reuters and LexisNexis were two of three major providers of legal research databases — vLex the third. Clio paid a huge premium to grab this last legal content leader and set itself up to potentially join the two incumbents in a “Big Three,” according to analysis.
These companies are building end-to-end legal tech stacks with this truth in mind: your AI model is only as good as the data you feed it. Backed by each of their chosen content houses, Clio, Harvey, and Casetext will pioneer a new landscape of AI-powered automation.
LexisNexis and Harvey take a different path
It’s worth noting that the LexisNexis-Harvey partnership in this triad is a horse of a different color. Until June 18, both companies appeared headed for a rivalry over the junction of GenAI and legal research. But their surprise alliance, in which they will jointly develop “sophisticated legal workflows built on the latest generative AI technology,” has made it clear that both companies thought it more prudent to link arms instead of lock horns.
The news has naturally sparked speculation about an acquisition. Artificial Lawyer asked Sean Fitzpatrick, CEO, LexisNexis North America, UK, and Ireland about that possibility explicitly, to which he said, “We are focused on the collaboration and we don’t discuss potential acquisitions.” (Of course.)
Harvey may be too large for LexisNexis’ parent RELX to acquire — especially now that the company is reportedly valued at $5 billion — making this content licensing deal the next best bet. This alliance looks like a strong plan B for LexisNexis. After all, RELX’s venture arm REV did join two funding rounds into Harvey this year; the first in February when Harvey closed a $300 million Series D round and the second in June when Harvey raised another $300 million at that $5 billion valuation. If you can’t buy ‘em, join ‘em.
Is what’s old new again?
For the most part, the industry has looked favorably on the Clio-vLex acquisition, but some experienced executives at both LexisNexis and Thomson Reuters have pointed out that it may echo their previous, aggressive attempts to combine legal research with workflow software.
In the early 2000s, both companies went on software acquisition sprees as they sought to digitize legal research and get their content “closer to the attorney.” They acquired workflow software assets to create end-to-end ecosystems for attorneys to handle all their requirements in standard platforms. These efforts largely fell short as both companies have divested many of those assets over the past decade — notably, Thomson Reuters’ recent divestiture of its flagship practice management platform, Elite. It remains to be seen whether Clio can succeed where others have stumbled, but it’s also not an apples-to-apples comparison. AI has changed the game in more ways than one and may cause unforeseen outcomes for these players.
Regardless of the ultimate outcome, it’s safe to say there will be no shortage of strategic investments in GenAI-for-legal over the next year — and with a burgeoning focus on the value of the data available to the AI models.
There may be accelerated consolidation as well. As Dentons’ Matej Jambrich writes, “Every major content owner (TR, Bloomberg Law, Wolters Kluwer) now needs a marquee GenAI partner, or an acquisition target. VC backed independents have ~18 months before multiples compress.”
Who will emerge as these “marquee” GenAI partners? With the legal AI land grab well underway, the answer may appear sooner than we thought.