In
a
somewhat
unexpected
announcement,
Clio,
the
giant
practice
management
software
company,
has
acquired
vLex,
the
legal
research
and
AI
company,
to
the
tune
of
$1
billion,
according
to
a
report
in
the
Artificial
Lawyer.
Coming
on
the
heels
of
the
recent
announcement
of
the
“strategic
alliance”
between
Harvey
and
LexisNexis,
it
would
seem
that
the
legal
tech
world
is
in
upheaval.
That
may
indeed
be
true
but
it’s
also
true
that
there
are
some
sound
reasons
for
the
recent
developments.
These
reasons
go
to
the
heart
of
the
needs
and
wants
of
lawyers
and
legal
professionals.
When
I
wrote
about
the
Harvey/LexisNexis
alliance
last
week,
I
noted
that
Harvey
had
succeeded
by
correctly
gauging
the
needs
and
wants
of
its
customers.
That
may
also
be
true
of
the
Clio
acquisition.
Diverse
Markets
First,
it’s
important
to
keep
in
mind
that
Clio
and
Harvey
to
some
extent
have
traditionally
served
different
legal
markets.
As
I
said
in
my
recent
post,
Harvey
began
by
focusing
on
Biglaw
and
only
recently
has
been
looking
at
the
smaller
firm
market.
Clio
has
long
been
the
practice
management
platform
for
smaller
law
firms
although,
like
Harvey,
it’s
now
looking
at
moving
into
the
midsize
and
even
bigger
law
market.
Both
companies
have
expansion
in
mind.
That
means
they
need
more
diverse
sets
of
tools.
Ironically,
the
deals
could
strengthen
each
company’s
position
in
the
market
traditionally
served
by
the
other.
AI
and
a
Firm’s
Internal
Materials
But
that’s
only
of
tangential
importance.
Here’s
the
more
important
thing.
As
I
have
written
before,
so
much
of
what
law
firms
(and
legal
departments
for
that
matter)
want
out
of
AI
is
the
ability
to
access
safely
internal
materials.
To
find
best
practices
and
prior
works
and
leverage
them.
As
said
in
a
post
last
year:
Retrieval
before
AI
technology,
even
if
the
material
was
housed
someplace,
was
at
best
clunky
and
hit
and
miss.
It
took
time.
Now,
it’s
instantaneous.
And
the
advantages
are
pretty
significant,
too,
ranging
from
generating
better
quality
documents,
creating
documents
that
bear
the
firm’s
unmistakable
aura
and
culture,
and
better
associates’
training.
So
the
ability
of
Harvey’s
AI
and
now
vLex’s
AI,
Vincent,
to
access
those
internal
materials
and
provide
instantaneous
responses
is
significant.
Presumably,
the
Clio-vLex
combination
will
enable
Vincent
to
work
with
Clio’s
system
to
access
just
these
sorts
of
documents
and
materials
not
only
across
public
documents
but
also
across
internal
data
bases
as
well.
Moreover,
the
Harvey
alliance
and
Clio
acquisition
will
provide
customers
with
the
ability
to
have
the
AI
tools
work
on
internal
documents
but
also
on
an
entire
legal
data
bank
that
not
only
offers
legal
research
but
also
drafting
help
and
suggestions
based
on
an
even
larger
data
bank
of
materials.
The
One
Stop
Shop
More
importantly,
presumably
the
combinations
will
provide
tools
that
will
work
seamlessly.
The
new
combinations
will
thus
create
a
one-stop
shop
for
the
tools
and
services
a
firm
might
need
to
leverage
its
own
content
and
the
more
public
legal
universe
both
substantively
and
administratively.
This
one
stop
will
enable
things
like
case
management,
document
summarization,
and
even
brief
writing
in
one
single
platform.
The
tools
will
also
leverage
content
for
administrative
non
billable
tasks
like
billing
and
invoicing.
The
key:
the
combined
tools
will
eliminate
the
necessity
to
deploy
separate
tech
solutions
to
solve
various
individual
problems.
A
non-unified
approach
creates
all
sorts
of
problems
and
frustrations.
Lawyers
don’t
like
moving
from
platform
to
platform.
It’s
a
frustrating
pain
point.
Frustration
means
lawyers
won’t
use
some
of
the
tools
for
which
the
firm
is
paying.
They
disrupt
work
flows.
As
I
wrote
previously,
“Law
firms
don’t
like
selecting
vendors
to
begin
with.
They
aren’t
good
at
it.
Firms
have
trouble
trying
to
make
different
vendors’
products
work
across
various
tasks.
It’s
clunky
and
time-consuming.”
Waste
of
money,
waste
of
time,
less
than
ideal
work
product.
I
wrote
then
that
if
or
when
a
vendor
could
combine
all
these
functions
in
one
platform,
it
would
be
on
to
something
because
it
would
address
a
real
pain
point.
It
looks
like
that’s
exactly
what
Harvey,
LexisNexis,
Clio,
and
vLex
are
doing.
The
Cost
But
of
course,
everything
has
a
price.
I
have
also
written
before
about
the
perils
of
this
kind
of
market
maturation
when
I
noticed
consolidation
trends,
where
justification
of
expenditures
extracts
a
price
over
service.
Paying
a
billion
dollars
for
something
places
a
lot
of
pressure
for
quick
returns.
I
have
also
talked
before
about
the
consequences
of
moving
products
away
from
the
lawyers/entrepreneurs
who
founded
the
startups
that
made
the
products
and
toward
those
who
may
not
have
the
same
feel.
I
have
noted
the
warning
of
commentator
Cory
Doctorow
of
what
he
calls
“inshitification,”
a
process
where,
as
a
company
grows,
it
focuses
less
on
the
users
it
originally
served
and
more
on
monetization.
That’s
a
real
risk
here.
We
now
have
two
huge
players
in
the
space.
(Well,
one
and
a
half
if
you
consider
that
the
Harvey/LexisNexis
deal
is
an
alliance
not
a
combination.
At
least
not
yet.)
These
two
entities
will
have
considerable
market
power
and
make
in
much
harder
for
others
to
thrive
and
break
in.
So,
while
the
long-term
impact
is
not
yet
known,
there
is
reason
for
concern.
One
Final
Thought
There
is
one
silver
lining.
The
Harvey/LexisNexis
deal
is
a
little
concerning
because
it
creates
such
a
potential
advantage
on
the
firms
that
use
both
sets
of
tools,
primarily
Biglaw.
The
Clio/vLex
combination,
though,
may
offer
smaller
firms
similar
capabilities,
particularly
for
those
who
already
use
Clio.
While
the
Harvey/LexisNexis
alliance
favors
Biglaw,
the
Clio/vLex
deal
could
help
level
the
playing
field
for
smaller
firms.
What’s
Next?
Predicting
the
future
is
never
easy.
But
suffice
it
to
say
that
the
market
pressure
on
other
vendors
is
now
stronger,
especially
for
those
who
offer
products
that
only
fill
a
particular
need.
The
move
is
toward
consolidation,
capitalizing
on
the
desires
of
customers
to
have
one-stop
solutions.
That’s
probably
not
going
to
diminish
anytime
soon.
It
Had
to
Happen
These
deals
were
driven
by
the
demand
and
desire
for
one-stop
platforms
to
leverage
AI
tools.
Recognition
of
this
fact
will
no
doubt
propel
others
to
do
the
same.
Stephen
Embry
is
a
lawyer,
speaker,
blogger
and
writer.
He
publishes TechLaw
Crossroads(Opens
in
a
new
window),
a
blog
devoted
to
the
examination
of
the
tension
between
technology,
the
law,
and
the
practice
of
law.