Bessemer Undertaking Partners, a VC company that has by now manufactured sizeable investments in legal technological know-how businesses this sort of as Clio, DISCO and Anaqua, has obtained a 60% vast majority stake in Litify, a legislation follow administration platform founded in 2016 by a group of individuals who came out of Morgan & Morgan, the major plaintiffs’ regulation business in the United States.
The investment decision arrives at a time when the authorized engineering has been seeing cutbacks and economic uncertainty. It also highlights the industry’s transfer towards platformization, interoperability, and cloud-based mostly digital transformation, all themes I’ve earlier highlighted.
Litify’s system is exceptional in that it is crafted on top rated of Salesforce, the revenue and marketing platform utilized by quite a few Fortune 500 organizations. It describes its product or service as an “end-to-end lawful operating platform” that can be utilized for complete-company practice management, business legal management, plaintiff exercise administration and claims litigation management.
The parties did not disclose the dollar amount of today’s financial commitment. Litify experienced previously raised $50 million in Series A funding in 2019, on major of previously rounds of $2.5 million in 2018 and $5 million in 2017. The lead investor in that Series A spherical, Tiger Global Management, will continue being a minority trader.
Litify claimed that Bessemer is now a 60% vast majority shareholder, which means all shareholders and vested selection holders participated in the transaction similarly, as opposed to a typical funding spherical. Litify claimed this was not a development financial investment whereby Bessemer is including a large amount of money of income onto the company’s equilibrium sheet to help greater paying.
In 2021, Litify acquired LegalStratus, an e-billing and make any difference administration platform for corporate authorized departments and govt companies that was also crafted on the Salesforce system.
With today’s offer, Bessemer Companion Brian Feinstein will provide as chairman of Litify’s board of administrators. Bessemer has a document of investing in sector-defining software package companies this sort of as Procore, ServiceTitan, Shopify, Toast, nCino, and Vlocity.
In the legal sector, Bessemer is an investor in the e-discovery firm DISCO, which went public in July 2021, and was a fairly early trader in law follow administration organization Clio.
It is also an trader in authorized tech firms Anaqua, which gives IP asset administration application agreement lifecycle administration firm Contractbook and Formally, a system for immigration situations.
“Litify stands out as the authorized technologies player that is uniquely positioned to rework authorized enterprise operations at its main,” Feinstein reported. “I’m enthusiastic to lend my skills to Litify buyers at a time when requires on lawful support suppliers are expanding.”
Vote of Confidence
Ari Treuhaft, president and COO of Litify, advised me in an interview that he views Bessemer’s investment as a strong vote of self esteem from just one of the world’s major institutional traders, and he mentioned he is energized for what this will signify for the company’s clients.
“It’s a strong vote of self confidence in every little thing that we have been doing and every little thing we plan on continuing to do, now underneath their tutelage and guidance, finding out from very best tactics for other very thriving authorized tech companies that they worked with, like Cleo, Anaqua, and DISCO, and also wildly successful vertical SaaS businesses, general public providers like Procore, nCino and the like,” Treuhaft said.
Connected: On LawNext Podcast: Litify COO Ari Treuhaft on Why the Follow Management Business Considers Itself A Distinctive Group of Authorized Tech.
“We’re in this for the lengthy haul. We want to add a ton of price to law corporations and legal departments and Bessemer thinks in that mission.”
Treuhaft mentioned the acquisition will not change the company’s course. “This is incredibly substantially a continuation of precisely what we do ideal now. We operate with superior-volume regulation companies, large high-volume methods, and we also do the job with big firms that have very advanced authorized departments, authorized functions and administration of outside the house counsel. And we’re going to keep on accomplishing the exact same.”
Regulation Firm and Company Customers
Litify was started in 2016 by John Morgan, founder of Morgan & Morgan, and Reuven Moskowitz, COO at Morgan & Morgan, and carries on to be employed by that organization as its observe administration platform. Both Morgan and Moskowitz continue to be minority investors in the company.
Morgan and Moskowitz issued a joint assertion in which they mentioned: “We are grateful for this milestone and thrilled to see the enterprise consider this enjoyable upcoming phase with the support of Bessemer. We are thankful to traders, unbelievably happy of the workforce, and we are wanting ahead to Brian’s management to accelerate Litify’s development.”
The business states it now serves much more than 45,000 lawful industry experts throughout extra than 20 unique legal practice regions. Treuhaft explained the enterprise mainly serves regulation firms in the mid-to-big array and that corporate legal departments are a quick-rising section of its market. In fact, he challenge that, by following year, the corporate authorized business enterprise could be on par with the regulation agency enterprise.
A press launch asserting the acquisition stated that the offer is occurring as Litify “achieves profitability and continues its next period of expansion.” When I requested Treuhaft about the company’s profitability and progress, he claimed that he could not examine the company’s funds but stood by the language of the press launch.
But Treuhaft reported that, about the earlier couple of several years, Litify has turn into keenly mindful of the kinds of attorneys who get the most benefit out of its program, and they are the kinds on which the organization focuses.
Who are individuals lawyers? I questioned.
“Any legal observe that promotions with a large-volume, extra-repeatable style of authorized get the job done — litigation lawyers, defense lawyers, immigration, work, trusts and estates, and any law firm which is doing work on contingency for everything,” he reported.
“And then on the corporate facet, it’s really large businesses that have pretty advanced organizational legal wants, and in which you have a person centralized team that’s attempting to immediate targeted visitors on all of it, both equally internally and to outdoors counsel. Those are the locations that we glow in. The focus is on advanced organizations that are on the lookout for scale and operational excellence out of their computer software.”