In another acquisition that will rock the legal tech market, Litera has acquired the law firm business of contract review leader Kira Systems, which as part of the transaction is spinning off its corporate market business in a new company called Zuva, which will be led by Kira’s founder and CEO, Noah Waisberg.
Kira Systems, which was approached by Litera at the start of this year, will form a cornerstone of Litera’s transaction management unit, as it looks to transform the due diligence process.
As part of the acquisition, Insight Partners, which in August 2018 invested $50m in Kira, will become a minority investor in Litera. Hg, which in 2019 acquired what was then Litera Microsystems from K1 Investment Management and has been the driving force behind 12 acquisitions over the past two years, will remain the majority investor in Litera.
Around 70-75% of Kira’s business is made up of law firms, where it dominates among the BigLaw league tables for contract review and analysis. However, one condition of the transaction going ahead was that Kira would spin off its corporate market work within Zuva, where Waisberg retains the role of CEO. Litera will have a small shareholding in Zuva, which will be commercialising a number of new products in the next few months. While the majority of Kira’s employees and leadership team are joining Litera, Bbetween 30 and 40 staff are moving to Zuva. Kira co-founder and CTO Dr. Alexander Hudek will be a strategic advisor and board director to Zuva.
Speaking to Legal IT Insider about the acquisition, Waisberg said: “As we spoke to Litera we realised that there was an amazing opportunity for both of us. We want to be ubiquitously used within law firms and while some firms are driving to that, not all of them are and we are not in some firms.” As Kira focuses on expanding its corporate business and launching new products in that space, Waisberg said: “I started to worry that Litera could achieve better than us in the law firm space. They have experience in the document comparison market and virtual data rooms, and they have the customers and relationships. I thought, ‘If we can hand off to Litera then we can put our focus on expanding into the corporate market.’”
Waisberg will continue to spend around 20% of his time working as a senior adviser to Litera. The Kira leadership will continue in senior roles within Litera.
While it is unknown what Zuva’s first product is, it is likely to launch in September.
Speaking to Legal IT Insider about this latest acquisition, Avaneesh Marwaha said: “We want to make transaction management a platform our customers live in, and when we ask our customers what else they need, contract review and due diligence is always top of mind. We thought about how we wanted to engage and knew that the top technology was Kira, so we reached out and had some great conversations with Noah and it really came together.”
While there is a data room capability in Kira, Marwaha said that Litera will not be making any immediate decisions around integration and wants to be agnostic when it comes to other data rooms that customers use.
In a statement, Marwaha said that the acquisition would “allow us to include advanced machine learning workflows into our transaction management platform. Providing lawyers with significantly expanded workflows to manage more aspects of the deal management process of higher quality. We are also incredibly impressed by the Kira team and leadership, whose expertise will be a strong addition to the Litera family. Overall, Kira enables us to provide total diligence for the transaction and deal management lifecycle.”
Litera’s acquisitions include DocsCorp, Foundation Software, Objective Manager, Clocktimizer, Allegory Law, Doxly, Levit & James, Workshare, and Bestpractix.
Avaneesh Marwaha will speak further about the acquisition in his CEO Executive Briefing on August 19th, 10 a.m. CT, and ILTACON 2021, August 22-26 in Las Vegas.
Caroline.hill@legalitlexicon.com