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Aderant announce not one but two acquisitions – and it all kicks off in the legal CRM market

Last week Aderant announced that it had hired Doug Geller, the founder of Geller Data Solutions Inc, to head up its StarLaw DMS business. Today it used the start of this week's ILTA Rev-Elation event as the opportunity to announce two new acquisitions CompuLaw (and its subsidiary Deadlines.com) and Client Profiles (including its CRM4Legal division).

Comment: The full text of the release can be found below however here is our comment as we think this announcement will actually have a more significant impact upon the future of the mainstream legal software market than either the Microsoft volte-face or the HP acquisition of Autonomy, not least as these acquisitions create the world’s largest independent legal software company. As Aderant point out, it will “give their customers worldwide access to a suite of products and services that will help them manage, grow, and protect their businesses. The company’s offerings will be the industry’s most complete suite of firm management software and services including: business development, client relationship management (CRM), practice and financial management, time and billing, case management, document management, automated court rules-based calendaring, and business intelligence.”

The CompuLaw side of the deal really needs no further explanation. Great company, with a great product that delivers genuine benefit to law firms operating in the United States, not just in terms of business efficiency and convenience but also as a risk management tool. As for Client Profiles… well this is where it gets interesting. The case management part of the business is another excellent operation, with an obvious synergy with CompuLaw and taking Aderant into a wider sector of the market that it has previously operated.

And then there is CRM4Legal, the company's Microsoft CRM Dynamics-based client relationship management system. This is another excellent product but one which internationally has not enjoyed the success it deserves, primarily because of difficulties and a run of bad luck with its channel partners. The Aderant deal changes all this. Now the product has a global legal software provider with a blue-chip customer-base and a global route to market, thereby almost instantly giving CRM4Legal better reach, scalability and credibility as a global CRM platform.

More importantly still, the move comes at a time when business development is now firmly on the agenda of all serious (as distinct from sunset) law firms (particularly given the threat of alternative legal service providers in some jurisdictions) and at a time when the one-time market leader in the legal CRM market – LexisNexis Interaction – is starting to show signs of losing its way. The company has fallen out with some of its business partners… there are executives within LexisNexis saying the product needs to be redeveloped on the Microsoft CRM Dynamics… and increasingly we are hearing of other CRM products (including CRM4Legal, Sugar CRM and Salesforce.com) making it on to law firm's short-lists whereas even two years ago Interaction would have had a free ride.

The Tikit Group (also present at ILTA) has already thrown its CRM hat into the ring with its own alternative product ClientConnect – and now we have Aderant entering the fray. This is bad news for LexisNexis. This is also bad news for Thomson Reuters who now really need to get their Hubbard One act together and give it the clout it deserves, otherwise they could see Aderant CRM4Legal becoming the CRM of choice for Elite 3E users. And it is a mixed blessing for Tikit, who now have a serious contender to their new product – although it does also mean there are now two viable alternatives to living on Planet LexisNexis Interaction.

As for Aderant? Well win, win all round. Greatly enhanced product set – and in a world where consolidation is the name of the game in the legal IT sector, the company is clearly drawing a line in the sand and saying: we are one of the big beasts in this market and we are here to stay. The fact that a VC-owned company is making acquisitions (as opposed to cutting costs to try to make a fast return and exit on their investment) only adds to Aderant's longer-term credibility. And, it is worth noting, that Aderant is one of the few big players in the legal IT space that is a software provider and not primarily a content provider.

Interesting times and it will be hard to see how anyone tops this story at ILTA this week. Now here's the rest of the formal announcement…

“With these acquisitions, Aderant is building on its commitment to deliver world-class products and services that empower law and professional services firms to operate more effectively and profitably. To that end, Atlanta-based Client Profiles brings products in CRM and case management to Aderant, while Los Angeles-based CompuLaw and subsidiary company Deadlines.com provide powerful risk management tools for firms of all sizes. Included as part of the transaction are CompuLaw’s well-known court rules-based calendar and matter management system, the SaaS-based legal deadline calculation service, and the largest and most comprehensive library of rules databases for any existing legal calendaring application with databases for nearly 2000 jurisdictions and all 50 states. CompuLaw is known as a pioneer within the legal calendaring space, while Client Profiles is recognized for its expertise in case management services for small-sized firms.

Our goal at Aderant is to be the go-to software and services partner for law and professional services firms worldwide,” says CEO Chris Giglio. “By expanding our product family with proven systems from CompuLaw and Client Profiles – two well-respected leaders in the industry – we’re strengthening our brand, bringing our clients the broadest set of capabilities, delivering the best technology in the industry, and ensuring we maintain the highest level of client satisfaction – all through the seamless integration of our offerings.”

Nearly 2500 law and professional services firms around the world, including more than 60% of the AmLaw 200, benefit from Aderant’s complete suite of business management software systems. Following the acquisitions, Aderant will have clients encompassing nearly every segment of the legal market and will offer products for each segment’s unique needs. Giglio will continue as Aderants chief executive officer. David J. Kalmick, president & chief executive officer of CompuLaw, will serve as Vice President of Aderant CompuLaw, and Whit McIsaac, Client Profiles’ chief executive officer, will be Vice President of Business Development.

“We purchased Aderant in 2008 with the intent to create the strongest software company for the legal and professional services market, and with the addition of CompuLaw and Client Profiles, we have taken a big step toward making Aderant the premier provider in this space,” said Robert F. Smith, chairman of the board of Aderant (and chairman & chief executive officer of Vista Equity Partners). “Moving forward, we will continue to invest in Aderant and its acquired product lines to make it an even more formidable company in the market.”

 
Nearly three decades ago, CompuLaw, whose clients include more than 70% of the AmLaw 100, created the market for automated court rules-based calendaring software for mid to large-sized law firms. Its web-based Deadlines.com brings malpractice risk management to smaller firms. “For more than 30 years, CompuLaw’s commitment to quality, reliability, and service has earned us an outstanding reputation in the industry,” said Kalmick. “Because both Aderant and CompuLaw have similar philosophies on quality and long-term customer satisfaction, joining the Aderant family makes perfect sense. We will now be able to deliver new products and services more quickly to our valued clients, bringing unprecedented product reliability and comprehensive practice protection to the market.”

“Client Profiles is thrilled about coming together with Aderant and CompuLaw,” said McIsaac. “Client Profiles wanted to grow larger and stronger to capitalize on the opportunities that we have worked so hard to develop in the marketplace, and this transition will enable us to do that. Aderant gives us immediate scalability and its strengths are a perfect complement to our business model, our products, and our services. Existing clients will benefit from new product developments and enhanced services resulting from the depth and breadth of the Aderant organization. This is one of the most exciting changes in the legal technology space in a long time, and we are looking forward to the future that can be built on this platform.”

22 replies on “Aderant announce not one but two acquisitions – and it all kicks off in the legal CRM market”

The Article is brief … trumpeted somewhat, and advanced.
The Comment is 20 times the size of the article itself.
And consists of mainly quotes from the marketing departments of the firms concerned with just a little commentary to keep it apparently honest.
Not an editorial at all, merely lack thereof. An Advertorial when once there was integrity.
Charles; when was you're Poetic soul sold?

After the billing, this was not quite the huge story I was expecting – CRM…? Is anyone still trying to get this working in Legal? – I was hoping that Aderant had been sold again but this time to someone like Microsoft……now that would really worry SAP, Lexis and Elite!

“We have a news story for you that will be the talking point at next week's ILTA '11 Nashville event – and will spread fear, uncertainty and doubt among at least three of the major players in the legal IT world.”
Not much of a talking point here, so far. And not sure that too much FUD either. Who were the three players?

OOooo we have a lot of bitter & twisted people out there – and who don't understand the dynamics (Microsoft or otherwise) of the legal IT world today. Time to pack up your Unix and Windows 95 skills and head for the Big Development Home in the Sky? As for CRM – yes, lot of people still trying to get it work because a lot of law firms realise that business development skills (rather than legal skills) are the key to their survival …CC

Not like you to bite Charles, too much country music and jet lag?

Soul sold for story scoops?
Critics know nothing about nothing?
(It's sure hot in Nashville.)

Perhaps if more folks had UNIX and Windows 95 experience, they would understand that this is an 'I've got bigger portfolio than you' deal, and not something that will fundamentally change the game. (CC does folks a disfavour by dismissing those with industry experience so glibly)
The acquisitions are not something that is a natural fit with the existing ADERANT product suite, and it will be a long day in Big Develoment Hell to shoehorn these together into anything like an integrated offering that will add any value above the sum of the parts.
Whilst “owning more of the attorneys desktop” is a Vista/ADERANT aspiration, this is not somethng that will sit easy with existing clients, who will see core management skills being taken away from looking after the existing client base and core product.
When it comes to understanding Business Development, yes Law Firms aspire to do better, but ADERANT being distracted like a magpie to bright shiny objects will not impress the exsiting client base much.
Rule Number One of Business Development… Make the existing clients your best sales team.

This seems to build Aderant's value which would be the primary focus of their VC owners. Now watch out for the streamlining and cost-cutting in the acquired firms as they try to make the numbers work! Their growth must have stalled after the Starlaw acquisition since there have been very few new win announcements. Not sure this announcement does much for the market though, particularly in the UK where Aderant seem to be struggling and CRM already has multiple players.

4 comments, all in agreement that this is not a major thing here, is hardly “lots of bitter and twisted people”

Let's look at history. Aderant in the past have bought market share with barrister javelan and keystone. How much investment went into those products rather than just trying to convert them over? Not much. As someone said earlier, trying to integrate these new different products is a development nightmare.
Really struggling to see the market paradigm shift predicted.

“Rule Number One of Business Development… Make the existing clients your best sales team.”
Oh get real for goodness sake… this is 1980's account management sales 101. Your best sales team will be the one that understands the prospective client's business needs and personal agendas intimately, your own product capabilities that address those things, and is the team that is incentivised to sell with personal reward. Without those things, sales don't happen unless you are selling commodity stuff (like iPads!).

The acquisitions would seem to fit nicely with their current strategy to attack the small firm market, given Elite's renewed strength in the medium to large firm segment now that 3E is mature. An 'all in one' solution is required for the small firm market to compete with the other small firm offerings so it does make sense.
The greatest risk to Aderant however is that their core platform is near end of life, and with Lexis releasing a new platform next year according to their marketing Aderant's solution will be wedged between two offerings based on current technology and at the beginning, or at least early in their development cycles, both backed by significant legal vertical businesses. At that point Expert will be attractive only as a 'budget solution' and I'd imagine after 12-18 months of falling revenues due to a slow migration away from them Vista won't think twice about ditching the company. The likes of Peppermint also present a real market threat if they get up and running.
Aderant need to release an entirely new platform (not just a new UI), either proprietary or a variant of the LN/Peppermint strategy within the next two years to remain relevant. Otherwiser they face an uncertain future.
Charles, you should start a new section on your blog to record big ticket predictions made by your readers. Add a countdown clock for hours of sniping fun.

Arlene Adams, CEO Peppermint Technology
If you step back from the software supplier “protectionist” comments I think this move is good for the market and more importantly for customers. As CEO of Peppermint Technology (also developing on MS CRM Dynamics) I am encouraged that, at long last, we are starting to see investment in the legal IT market. In recent years there has a been a flurry of buying and consolidation amidst Legal IT suppliers but none of it has benefited customers. The buying has simply consolidated what exists and has not delivered investment in innovation to take the market forward. If anything it has only created uncertainty for firms investing in software and no-one in the market, customers or suppliers, win from that.
For too many years legal firms and companies have had little choice when it comes to software to advance their business. The market is a wash of old legacy systems. I would hope this move by Aderant signifies the market is starting to realise firms need software that can enable innovation and business performance. Cusotmers are crying out for software that can transform the client experience, streamline the back office and enable the rapid deployment of new innovative legal services. Old legacy systems can't deliver this where as new technology, such as MS CRM Dynamics, can BUT you have to invest to make it relevant for the legal market. Time will tell if Aderant follow this acqustion through with the investment it will require.
So while some may suggest, as CEO of Peppermint Technology, I should be worried about Aderant buying Client Profiles I am not. Infact I applaud the move. We should embrace and encourage the investment in new technology as it's good for the market. Perhaps if more players in the market looked outward to their customers, and not inward to protect their margins, the legal market would be in a better place.

I don't want to stoke the fires, but Arlene's post is spot on.
VCs are simple beasts where profit improvement is usually the bi-product of – ie achieved in spite of – reduced/integrated back office overhead. Aderant are making a better fist of it than CS, but again only because Vista (like Hg) expect to be long gone before skeletons and chickens start doing their thang.
With CRM – yes the dynamics are interesting – but the legal services problem is fundamental – when a law firm asks a developer to build a system that shows them how to integrate a sales force, I'll sit up and stare. Big firms use CRM to control; the mid-market use it to catch up; the small firms still think it has something to do with marketing.
With matter management – its GCs who want industrial strength systems more than private practice – and the structures required to service them are radically different. A private practice team buying industrial strength case management just shows willing – it doesn't mean they can hack it (ditto for in-house teams tackling practice management that do more than time and fees).
It is sad that UK acquisitions have been underwhelming at best – it does not mean their won't be more deals – and soon.

“In recent years there has a been a flurry of buying and consolidation amidst Legal IT suppliers but none of it has benefited customers.”
This cannot be same Arlene Adams that, as MD of Iris, started buying and consolidating UK PMS vendors shurely?

Arlene, I couldn't agree more with your comments regarding focus on customers and the market vs. the balance sheet. As you point out, time will tell whether these acquisitions result in true innovation or just more of the same. It's all in the execution. I, too, would like to see some advancements in this industry after many years of “legacy” systems.
Hilarious commentary on this post, Charles. Plenty of critics and industry experts to keep things interesting.

I wasn't saying market consolidation is a bad thing. Far from it. There are still too many suppliers for the size of market. My point was to highlight investment in new technology is critical to advancing any market. Buying legacy companies without investment doesn't achieve much. Until now the UK Legal technology market has been suffering an investment famine hence I set up Peppermint who are investing several million in driving long needed innovation into the market.
PS… be brave and show your name if your going to post on the blog!

It's unfair to say there's been no forward thinking or innovation – Elite was the first to build and release an entirely new platform in 3E since the early 90's and their decision to do so is a clear example of creating competitive advantage for the vendor, and better solutions for customers which was the point of Arlene's post. Credit where credit is due Arlene – Elite took a beating in the early days of 3E and should be recognised for 'changing the game', and it seems to have paid off for them given the number of new clients they're winning whilst other vendors work to catch up.
Looking forward to seeing your solution when it's ready!

What you did say was “none of it has benefited customers”.

And then there is CRM4Legal, the company's Microsoft CRM Dynamics-based client relationship management system. This is another excellent product but one which internationally has not enjoyed the success it deserves, primarily because of difficulties and a run of bad luck with its channel partners.
I think the writer is wrongly informed. It was not bad luck with channel partners, but lacking support from Client Profiles including not following up agreed commitments.
I sincerely hope that this will improve now!
A CRM4Legal expert

Actually the writer is not wrongly informed – its the anonymous CRM4Legal expert that is talking bollocks. The reference to bad luck with channel partners relates to the fact their first choice channel was the CRM arm of Vodafone which was shut by Vodafone before they could take the product anywhere. Then they tied up with TFB but then Tikit bought TFB and – at that time – Tikit was an Interaction partner and did not want to push a rival CRM package. …CC

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