Thomson Reuters/HighQ: ‘Helps Growth, Defends Vs Rival Consolidators’

Today, Thomson Reuters (TR) officially announced it has bought HighQ, the legal data sharing platform. But what does it all mean?

Here is what someone with knowledge of the deal told Artificial Lawyer just now:

  •  HighQ wants to be a leader in the rapidly changing legal market and not to be part of something bigger at this point risked rivals that are consolidating possibly leaving HighQ behind. 
  • With TR they can accelerate and gain a better reach into different legal markets and an improved reach to senior decision makers. This will drive growth and help the company to meet its strategic goals.
  • TR invests in software, from Panoramic to ContractExpress, they are trying to build a powerful software business and HighQ can help with this.
  •  HighQ’s management will stay in place and work closely with TR. No immediate changes in management roles.
  • There were multiple parties bidding for HighQ. TR won, but the price will not be revealed yet, though it may come out soon as TR is publicly listed.

And, here are some thoughts from Artificial Lawyer:

  1. HighQ is one of the few very well-known legal tech brands in the data sharing space. Its insertion into TR shifts the market and puts additional pressure on peers such as NetDocuments. Why? Because TR has very deep pockets and will invest in scaling client uptake.
  2. Adding HighQ to TR’s platform play is clever. The central idea of a platform play is to make it hard for the client to leave. HighQ has made itself a central node in the legal data environment of many firms and companies, adding this to TR’s research, doc automation and other capabilities just makes it all the harder to escape TR once you’re signed up – and that’s exactly what TR wants.
  3. TR has enough money to buy pretty much anything it wants in the market. That it chose HighQ shows that it really wants to become even more enmeshed in how lawyers work, not just provide point solutions. I.e. this is a vertical and horizontal integration strategy, capturing data movement and storage, and then adding this to doc creation, legal research and legal data libraries and more.
  4. It was always going to be interesting to see what TR did with some of the money they got from selling the MLS LPO group to EY. Here is part of the answer. The price is not known, but HighQ has been going for 18 years – since 2001 – and has found its way into dozens of leading law firms. Their price therefore, plus the bidding aspect, suggests a significant sum. It also shows how much the industry values HighQ as a strategic asset.
  5. This now sets the bar for the rest of the market. When a company like TR buys a business like HighQ then it raises the strategic stakes for everyone else. We can expect rivals to now accelerate their M&A strategy to build their platforms at even greater speed.
  6. This also means that any legal tech company that supports a platform play is likely now a potential target, whether from a large tech player, or a PE fund looking to buy up market assets with a view to a roll-up and sell strategy down the line.
  7. Money begets money. As investors and large companies see the money flowing, in turn more money will flow. Sale prices will rise and then more money will rush in to try and get a good deal before prices rise further. As seen yesterday with ContractPodAI – money is flowing fast. It will flow faster now.

Conclusion – we have been building to this point for a while. Now consolidation has become real. Eventually it will have a momentum of its own.

The question now is: who is next?

2 Trackbacks / Pingbacks

  1. Strategic Differences: LexisNexis Backs Doc Analysis, As TR Moves Away – Artificial Lawyer
  2. Thomson Reuters Prize Offers $250,000 + Partnership To RegTech/LegalTech Startups – Artificial Lawyer

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