US-headquartered information governance vendor Diligent Corporation has acquired Manzama Inc, we can reveal, in an acquisition that comes as Diligent begins strategically targeting the legal sector for the first time, including hiring a VP of legal sales.
Manzama counts among its clients firms such as Skadden Arps, K&L Gates, Mayer Brown, White & Case as well as Allens in Australia and, in the UK, a raft of top 50 firms such as Addleshaw Goddard and DAC Beachcroft.
Its content aggregation and analytics software will continue to be available as a standalone product but will also be plugged in to the tools that Diligent uses to help senior executives govern their organisations. Diligent, which has not publicly announced the Manzama acquisition, is an SaaS business that counts as its clients 70% of the FTSE 100, 50% of the German DAX, and globally 50% of the Fortune 1000.
There will be many private practice law firms that aren’t familiar with Diligent but, speaking to Legal IT Insider, Diligent’s EVP and chief financial officer Michael Stanton said: “Today we’re the most widely used software company by senior executives to govern their organisations, from the governance of their documents and information to their voting and reporting. We provide automated boardroom governance in a very neat and intuitive software app that makes it easier for board members and company secretaries to administer and track in a secure and efficient way.”
He adds: “It could be that you’re talking about executive compensation or a piece of M&A or any development where that information needs to be highly secure in a way that traditional paper isn’t: you can’t have people leaving printed documents lying around. Sending those kinds of communications on email with a PDF attached is not the most secure.” That is particularly, in a situation recalled by Stanton that many readers will relate to, where the PDF is a password-protected file and the password is circulated with the PDF.
The risk and compliance market is worth around $40-50bn and, of that, enterprise governance management is worth around $6bn. Stanton says: “We believe we’re not just an early leader but a category definer. There are a lot of organisations that focus on risk and compliance but if you look at the ‘G’ in GRC [governance, risk management and compliance], that’s our sweet spot – the privileged C-Suite relationships.”
Manzama will help Diligent to enhance its new insights and analytics offering where a real-time dashboard of curated content can be consumed by board members and GCs.
While Diligent has a number of law firm clients, it has never specifically focussed on private practice law firms. That is about to change as Diligent hires a VP of legal sales and plans to build its resources to focus on a sector where it sees “massive market opportunity.”
Stanton says: “Law firms are big businesses that can take advantage of working with Diligent. They have the same governance structure as corporates and if they are deciding partner compensation, I really hope that they are not emailing that communication around.”
He adds: “For us, law firms have not been a core focus, but we are in the process of hiring a VP of legal sales and we will put our money where our mouth is: we think the legal sector is a massive market opportunity. We’ve worked with law firms for years but our sales representatives were covering regions as opposed to industry verticals and if they sold to a law firm it was because that firm was in their territory, not because it was in the legal market. We’re still largely region-focussed but now there is more focus on legal: law firms and private equity firms.”
Diligent in 2018 acquired German-founded virtual data room provider Brainloop which, aside from some of the biggest corporates in the world, counts law firms CMS, Stewarts and Noerr among its clients.
Stanton says that the due diligence process in the run up to buying Manzama has been an eye-opener. “The newer insight for me into the law firm market as part of my teams’ due diligence, in which they spoke to CIOs at the biggest law firms in the world and talked about all the tech they buy, is that it’s not so different to listening to corporate CIOs but that there is a vast array of technology being deployed.”
Another example of technology consolidation, Stanton says: “Manzama is a beautiful product that we can continue to scale on a standalone basis as well as integrate into our broader offering for both corporates and law firms. The value we can bring is a broader platform: you don’t need to assemble five different technologies – we can do that.”