Litera has acquired FileTrail, the legal technology supplier’s 15th company in the last five years. FileTrail allows Litera to expand its GRC offerings to clients. How much Litera has agreed to pay for FileTrail has not been revealed, but the deal is marked as completed.
Litera CEO Sheryl Hoskins said, “Firms have always prioritized information governance and safeguarding client and matter data, but in today’s regulatory environment, it’s become even more critical.
“It is essential for firms to maintain a complete view of client and matter data to comply with their regulatory obligations. FileTrail’s strength lies in its ability to offer a unified view of all data within an organization, and this integration into Litera’s existing GRC portfolio will provide firms and corporate departments with industry-leading Governance, Risk, and Compliance capabilities.”
Who is Litera?
Litera has been around since 1995 and positions itself at the forefront of legal technology. Its transition from document technology to legal tech started in 2018. It made three acquisitions that allowed it to adopt AI and automation of workflows. They also led to its customer base more than quadrupling.
Acquisitions over the last six years have continued to deliver growth. The customer base has grown 3x and it has added a number of key partnerships. The acquisitions cover a range of sectors, all impacting part of the legal tech ecosystem. They include document productivity (DocsCorp), budgeting and pricing (Clocktimizer), shipping and invoice management processing specialist (PS/Ship), and CRM vendor Upper Sigma.
Earlier this year, it launched Foundation Dragon, a GenAI tool built by its in-house AI incubator. It is a deal term database that searches through all a firm’s unstructured data to identify information that can be used in negotiations.
Who is FileTrail?
FileTrail specialises in information governance with a focus on the US, Canada, UK, and European markets. With a customer base in regulated industries, its Governance Software covers the entire document lifecycle. It integrates with Microsoft SharePoint, iManage, NetDocuments, OpenText eDocs, and others to protect electronic documents. It also provides governance around its customers’ physical documents.
The company’s core technology is its policy engine and automation. Policies are applied to documents when they are created. It makes it easier to classify documents and set rules such as retention and security. It also means that compliance controls can be automated, making it easier to audit and reduce risk.
Why has Litera acquired FileTrail?
Litera plans to integrate FileTrail into its existing products and sees it bringing additive technologies to its product line that will introduce new capabilities. It specifically calls out FileTrail as complementing its CAM, PowerDesktop, and PS/Ship solutions. The result will be a wider focus on governance.
Litera says that FileTrail’s policy engine and automation will complement its existing products. How quickly the two companies can integrate the product lines is not clear, nor is it clear if Litera will retain FileTrails’ product line.
There are five sets of capabilities that Litera identifies as improving:
- Comprehensive Data Management: Gain a thorough understanding of how and where client and matter data is stored and used by the firm, across both physical and digital records.
- Integrated Digital Collaboration Management: Ensure the ability to provision, manage, and analyze digital collaboration systems such as document management systems, network file shares, Microsoft Teams, or SharePoint.
- Unified Retention and Compliance Management: View and apply retention policies and outside counsel guidelines on physical and electronic records.
- Streamlined Review and Approval Workflows: Utilize review and approval workflows for the disposition of physical and digital records.
- Effective Management of Outside Storage Vendors: Implement comprehensive solutions to manage the transfer and storage of sensitive information with outside physical storage vendors.
Enterprise Times: What does this mean?
Legal Tech is a vibrant sector at the moment. However, the majority of vendors are focused on document lifecycle and contract solutions. The sector is also seeing an increasing amount of automation and AI.
This is a good acquisition by Litera. It is additive in terms of products and brings a raft of high-profile clients. It also provides a platform for cross-selling for both Litera and its partners.
The company’s growth over the last seven years has been impressive. It hasn’t had to raise capital since 2021. Since then, it has made several acquisitions, although the company has not announced what it has paid. This means that the company is working within its income and one wonders at what point, if any, it will seek to raise more capital.
There is also a question of whether Litera will continue to make acquisitions or rely on its own AI incubator to deliver new solutions. If the latter, what will come next?
