Phoenix grows up: A look at its marriage to Morae

For iManage, knowing that its biggest implementation partner was up for sale must have been an unnerving experience and it’s no wonder that Phoenix Business Solutions’ founder and CEO Mat Crocker tells us that he regarded the company’s acquisition this week by Morae Global Corporation as a marriage that needed iManage’s blessing.
Phoenix focuses almost entirely on iManage implementation, support, training and consultancy and with the acquisition by Morae this week, there is relief all round that it will continue to do that and more: Phoenix will now form a third division in Morae, with Crocker as president, focusing on document management and information management services.
Phoenix co-founder Dave Boswell has moved into a senior managing director role, and shareholders and directors Lee Tomlinson and Ray Burch will take on the roles of EMEA new business sales director and director of pre-sales engineering respectively.
Less is known about Morae than perhaps ought to be in the legal sector. The Houston-headquartered company was founded just under four years ago by former Anderson partner turned Huron EVP and co-founder Shahzad Bashir. In 2016 we flagged the company then known just as Morae Legal as ‘one to watch’ after a year of significant growth.
That growth included a number of big-name hires such as Jeff Seymour, a former principal at Deloitte, who has since left for Relativity, and Huron Consulting Group’s managing director Robert Haskin, who holds that same title at Morae. In that 2016 the company notably announced an agreement with Rockwater Energy Solutions to provide all of its outsourced legal services. Further growth has ensued, including the merger in 2017 with legal, risk and compliance analytics provider Clutch Group, which saw the company rebrand to Morae Global Corporation.
Speaking to Legal IT Insider as the acquisition of Phoenix was announced, Bashir said: “This is a continuation of what we started three and a half years ago and that was ‘let’s stop the talk and do something that really makes a difference to how corporate law departments work and how they work with law firms and vice versa.
“We said ‘we know we never want to be a law firm and the practice of law is off limits but let’s look at the business of law in the broadest and deepest sense: how to make life easy and efficient for law firms and law departments.’ Phoenix are culturally aligned with us on a mission to put information management right at the centre.”
Where Morae is strong in the United States, Phoenix is strong in the UK and Europe, with a growing business in the Middle East and Australia.
Morae has a strong corporate client base and Phoenix works with some of the biggest law firms (it recently won the Clifford Chance iManage implementation) and corporates (Phoenix met Morae working jointly for one of the biggest US corporates you can think of.)
Bashir says: “You see a lot of M&A in the legal world and most of the time you can’t figure out how the client benefits. I know it sounds cliched, but this is magic and we’re doing it to keep the client front and centre to make a transformational difference in the marketplace.”
Morae is organised along three business lines and has three presidents. It has an information management and eDiscovery business headed by Jim Neath, and Bashir says: “It all starts with creating information; somewhere along the line you may have litigation where you need to capture and process the information: we are one of the best and we’re very strong in financial services and big in pharma.”
It has a strategic consulting and legal services business, Morae Legal, which is headed by Joy Saphla that includes providing alternative legal solutions to its clients.
And now it has a brand-new document and information management, which is headed by Crocker and has clear synergies with the other two divisions. The Phoenix name is retained for this service line.
For Crocker, the sale is emotional, and he says: “Phoenix is my baby and I founded it and I’ve been running it for 16 years alongside Dave [Boswell] and Roger [Pickett]. I’ve lost friends and girlfriends over Phoenix and I wouldn’t be handing over control unless it was the right match.”
He adds: “The key thing for me is that I felt like whoever was our suitor we had to introduce to our parents – in this case our parent is Neil [Araujo] – iManage are a huge part of our revenue and we are proud of that. We made Shahzad aware that it was very important that Neil blessed this marriage. It helps that Morae is an iManage partner in the US. They already do a bit of document management and have a few people that specialise in it mainly in the US.”
Whereas Crocker can recall his first pay packet from Phoenix, the bootstrapped company has now grown to 120 people and Crocker says: “We had to do something to take us to the next level.”
It’s been apparent that the company has struggled with its strategic direction in the last couple of years – there has been a reversal of the strategy put in place by Jason Petrucci, who left at the start of 2018 after just one year as CEO, having sought to broaden out Phoenix’ focus to include a cyber division.
Crocker, typically candid, says: “In hindsight there was nothing wrong with doing that, it was the execution we got wrong because we were doing it almost on a shoestring budget when actually we needed to spend big bucks and build a managed services offering.”
Phoenix has also got a lot right: turnover growth has seen anything between a 20% and 30% increase in recent years, although the bottom line was hit in 2018 by buying out Pickett.
The company has grown to over 120 without contractors and while its biggest office is in London, it has offices in Frankfurt, people spread across Texas, Chicago and New Jersey in the US; an office of around 20 people in Australia; people in the Middle East; and then a newer office in Holland. The company has grown by 50 staff since Crocker took over as CEO, “just to keep up with demand.”
Much of the new demand has stemmed from GDPR: a completely different entry point to document management, which has been very good for Phoenix.
It’s no wonder the Phoenix team reached the conclusion that the company needs strategic investment and guidance: what Morae will be able to do is to help further professionalise, grow and build on the Phoenix offering – the website already looks nice and shiny.
There is also no surprise that after 16 years running the Phoenix show, Crocker and Boswell want to reap a return on their investment. But while the acquisition by Morae is a buy-out, Crocker dislikes the term ‘financial exit’, largely because he think it implies that the Phoenix team are moving on.
“I’m really looking forward to it,” Crocker says, “I’ve got a new spring in my step but it’s business as usual.” Bashir and Crocker take an obvious pleasure in calling one another ‘partner’.
It’s easy to be caught up in the enthusiasm. Bashir says: “This is where the fun starts. If you remember the classic study – are you laying bricks? Yes, but we’re building a wall…for a house. This is not just about the bricks. We’re doing it to sit down with the technology leaders of some of the leading companies in the legal industry who do different aspects of information management and we’ll say ‘let’s not just talk about better, faster cheaper. No, our question is how can we use technology differently when things have previously been so boxed in? Document management is in a box; contract management is in another box. Let’s bring it all together for our clients.”
So, what does Dad Neil say about all of this? Well, judging by the quote in the press release, he’s pretty chuffed, albeit we’re not convinced this would make a great wedding speech. “Phoenix has been an award-winning implementation, support and development partner of iManage leading some of the largest deployments around the world since its formation in 2003 and will remain a key partner,” he says. “This acquisition is a validation of how the legal market is advancing – connecting law firms to corporate legal departments, achieving agility and productivity gains via AI, cloud and modern technology platforms. Morae Legal and Phoenix bring complementary strengths to enable our joint customers to fully leverage the breadth and depth of our platform to execute on their digital transformation vision. We look forward to expanding the scope, scale and value of our joint offerings to the legal market.”
Cheers, let’s all raise a glass to Phoenix.