Elevate has expanded its AI and data science capabilities with the acquisition of enterprise and technology firm LexPredict. The move is the legal company’s latest deal since it received a round of debt financing from Morgan Stanley in April. More acquisitions are expected to close imminently.
Elevate and LexPredict have been collaborating closely for more than a year, leveraging AI to improve speed and accuracy in M&A due diligence and contract analysis for client Cisco.
“We have known (chief strategy officer) Dan Katz, and the LexPredict team for many years and have always been super respectful of what they do,” said Elevate president John Croft (pictured). “I would say Dan is in the top three in the world when it comes to really knowing and understanding AI and data science and its application in the legal space. This has been the perfect way to due diligence each other. We have been building up to this deal over a period of time which has been great.”
Croft believes that the merger will enable Elevate to provide the bespoke technology solutions its big corporate law department clients require.
“There are tools out there like Kira and Luminance that are very good, and we work with them and will continue to work with them. But they are set up as off-the-shelf solutions designed to do one thing. ‘I’m doing some diligence and therefore I need this,’. ‘I’m doing some discovery so therefore I need that.’ That’s not what we are looking to build here”, said Croft.
“Our clients have needs where its not about plug in and play. You can’t buy one piece of kit, push the button and off you go. We need to have a slightly more sophisticated data science and AI capability.”
The merger will also increase the pace at which Elevate is integrating AI into its own enterprise legal management suite, Cael. “Elevate has been building AI into Cael, gently, for years. So, from our point of view, this acquisition will amplify that, allowing us to up our game in terms of the capability we have,” Croft said.
For LexPredict, meanwhile, the deal will provide the services that surround that tech, Croft added. “We have 700 associates around the world. We generate $50m a year. We have scale. I think this represents a powerful combination of LexPredict’s intellectual brainpower, their understanding of how it all works, and our services and customer relationships. Together the two will be magic. It really is a case of one plus one equals five.”
The newly merged company will build upon the AI-enabled contracts repository management, abstraction and search they have already developed together, adding intake, assessment and workflow.
They will also focus on bringing increased efficiency to regulatory work including LIBOR, GDPR and Brexit by combining enabling LexPredict’s technology with managed services. In addition, they plan to develop tools for outside counsel billing guideline compliance and predictive modelling for pricing and planning of litigation and transactional matters.
Elevate raised an undisclosed round of debt funding from Morgan Stanley in April this year. Morgan Stanley was already a client of Elevate when it proposed investing in the firm. However, Elevate’s management team was reluctant to cede equity control after previous bad experiences.
“It ended up being a debt deal and they have been really fabulous,” said Croft. “They are really strong business partners. The relationship now goes both ways.”
News of Morgan Stanley’s involvement with Elevate earlier this year was swiftly followed by the announcement that the company had acquired some of the assets of US-based e-discovery company E-STET, that had not formed part of the earlier acquisition by EY. Further deals are now likely, said Croft.
“Are more acquisitions on the cards? The simple answer is yes. We are working on a couple right now and we expect them to become public quite soon.”
By Amy Carroll