Thomson Reuters the platform: The post HighQ acquisition analysis

Following our revelation yesterday (18 July) that Thomson Reuters is acquiring HighQ, the Legal IT Insider blog and social media feeds have lit up with lots of commentary. Notably where the comments are on LinkedIn and Twitter, they have been overwhelmingly positive and welcoming of the acquisition. On our website where many are anonymous, the picture is quite different.

We spoke to TR managing director Lucinda Case and global head of drafting and automation Andy Wishart about the acquisition, which we have heard on the grapevine was well over $300m – TR would not comment on that figure.

In any event, as we reported yesterday, the bidding for HighQ – which started out as a multi-party bidding war – was said to be “aggressive” for a company that in the last financial year generated revenue of £18.5m.

The platform approach

HighQ has done well to reinvent itself over the years from a fairly one trick collaboration portal pony to a tech stack that includes a new platform for corporate legal teams providing collaboration tools, document management, matter management, legal intake and self-service contract management, and vendor management.

The London born company has more widely been adopting an open platform approach: at Legaltech New York in 2018 it launched AI Hub and in August announced that Kira Systems was launch partner for the hub: users can automatically push documents from HighQ into Kira for analysis. HighQ then stores the enriched data in the AI Hub, and it’s available for use in the iSheets or data visualisation modules.

It is this platform capability that sealed the deal for TR.

Speaking to Legal IT Insider, Case said: “Our customers are faced with an explosion of Legaltech, regtech, taxtech, proptech, and fintech and their challenge is how to work with multiple products and different integrators. HighQ has solved a lot of those challenges, as it has built the platform and for us this acquisition provides an opportunity to expand our own productivity offering.”

She adds: “We already integrate with HighQ and Contract Express and by creating this open platform, we can integrate Thomson Reuters solutions and third-party solutions and deliver that all up to the legal profession with a single unified experience. So, from a customer perspective it helps them to simplify the way they are making the most of the most of legaltech and regtech solutions.”

From HighQ’s perspective, its global ambitions have in many cases exceeded its current go to market capability. It launched in the US in 2014 and has been expanding globally, but one of the key offerings that TR can leverage is its existing, truly global client base. Case said: “The reason they went for us is that we can help them to realise their vision. The more we talked the more we could help them to accelerate what they are doing and achieve that vision faster.”

While turning over a 28% increasing in turnover in the past financial year, HighQ made an operating loss of £1.2m thanks to the investments made during the past 12 months.

This is the latest example of consolidation in a maturing industry, and follows the acquisition of Workshare by Litera, which is creating an end-to-end document drafting platform.

Strategic acquisition?

An acquisition of some description by Thomson Reuters was inevitable after it sold its 55% stake in its finance and risk business Refinitiv for around $17bn and Case says: “After that sale we said we’d be looking for an asset. Before then legal hadn’t had the allocation of cash to spend but we have a lot of strategic folks and a lot of parts of Thomson Reuters saying it would be amazing to acquire HighQ to accelerate, for example, our offering to inhouse counsel and corporates.”

In terms of the logistics, the intention is that everyone from HighQ comes across. Case says: “We’re leaving them be for now because they are working on a milestone delivery so we are mindful that we don’t want to disrupt any of the good stuff they are doing.”

She adds: “It’s going to be a slow and measured integration – we have the top Thomson Reuters team working on this – bringing on 350 people spread across a number of jurisdictions – so we have some our best people working full time on it over the next 18 months and we intend to keep the whole team.”

The acquisition is undoubtedly strategic and many users see it having legs. One CIO we spoke to said: “If they can integrate their products it could be really good.

“HighQ has its own document assembly model, workflow, and data visualisation and Thomson Reuters has Contract Express, a sort of Power BI for reporting and Panoramic. It’s not beyond the wit of man to think they could integrate iSheets with 3E or Panoramic.”

Richard Punt joined recently from Allen & Overy as chief strategy officer and the head of innovation at one international firm said: “With Punt in charge it might just have legs.”

TR and HighQ are two of the dominant players in the legal tech market and the CIO we spoke to says: “They are probably better together than apart,” but he stresses again, “The value comes from actually putting them together rather than running them as separate things but that won’t sit comfortably with either of their sales empires.”

Integration seems to be the intention, and Wishart says: “We want to create that seamless experience on the platform so users can move through a legal process within HighQ and touch on these capabilities in a really seamless way. HighQ recently launched into the corporate space to provide corporates with a platform for all their legal needs and contract management is one of those solutions – there are some real synergies between our existing solutions and what HighQ are doing and I can see tight integration between our productivity solutions.”

TR will be prioritising Contract Express and asked how any integration will work with Panoramic, Wishart observes: “It’s early days.”

HighQ’s integration with Contract Express already allows users to pull data from HighQ into Contract Express to generate a document and then push that back into HighQ.

Wishart said: “It’s a really interesting integration and even in the last couple of days we’ve had joint discussions with customers over how do we take that Contract Express integration to the next level. Now we have that opportunity. We have a good overlap in our customer base and that gives us a chance to accelerate what we’re doing.”

Will the acquisition work?

If you take a look at the commentary on our website – assuming you didn’t know already – it’s clear that TR has not covered itself in glory when it comes to its acquisition history.

2014 saw TR sunset Engage followed by mid-law Elite Envision, better known as Pilgrim LawSoft, which TR acquired at the end of 2011/start of 2012.

While TR has done a good job of integrating Contract Express – swapping it in for Fast Draft in PLC and investing in the product – history often tells a different story.

The CIO observes, “Thomson Reuters bought FWBS years ago and haven’t really integrated any of that with the rest of the product suite.”

He adds: “Every time you want a bit of TR’s tech to talk to each other they say they will work with you on it and tell you that its groundbreaking and they will do it from scratch.”

One forecast for the acquisition on our site – from someone who arguably ought to be writing plays – goes like this:


TR acquires plucky start-up.

Founders exit.

Innovation ends as engineers focus on integration with other TR products.

Prices go up so customers can pay for the TR acquisition.

Start up becomes neglected division or simply a cash cow.

Customers leave.

TR starts migrating customers to something else.

Company is forgotten.

Other plucky start-up starts acquiring customers.

(Elton John sings)

It’s the circle of life!

In terms of the way it acquires companies, Case says: “We are much more strategic now and in terms of what we’ve bought you’ll have noticed that we haven’t been in the market much recently.” But she adds: “It’s not true that our past acquisitions haven’t succeeded. Just look at Practical Law in the US, which is a runaway success and has surpassed all expectations.”

Wishart adds: “Thomson Reuters approach to strategic acquisition like Practical Law and Contract Express has been very thoughtful. They have really learnt from applying the principals of the Practical Law acquisition into Contract Express and it has really worked: it’s been a really seamless journey.

“It all comes down to culture and making sure that culture fits.”

There are a few things standing very much in TR’s favour when it comes to this latest acquisition. One is the recent, albeit painful, corporate restructure that means TR is now organised along law firm segment lines as opposed to product lines – that is far more conducive to a successful platform approach. The second, is that as a result of its content business, TR already has deep and senior relationships with thousands of law firms.

This is a huge opportunity for TR. Strategically there is no doubt that the acquisition has legs. Will it get it right this time? Right now, you might as well ask Elton John.

For the final word let’s hand over to Stuart Barr, chief product and strategy officer at HighQ (although presumably that title will change), commenting on our website, and responding to the doubters, who says: “Some thoughts from my perspective on yesterday’s news. I’m excited to continue our mission to transform the legal industry. The HighQ management team is staying and we now have the backing of significantly more resources and much broader reach. HighQ will become the core of the legal software platform for Thomson Reuters going forward and we’re going to retain HighQ’s client-centric culture, entrepreneurial spirit and product focus – the things that have made us successful. The HighQ team believes we share an ambitious vision with our new colleagues and we’re excited to continue trying to realise it. Together, we can accelerate our vision for the industry and build an amazing platform that drives real, exciting change at a scale that would otherwise have been impossible. Change and progress is inevitable. It’s exciting, let’s give it a chance.”

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