LexisNexis Acquires 'Legal Analytics': Lex Machina
Legal technology columnist Sean Doherty analyzes LexisNexis's acquisition of legal analytics provider Lex Machina.
LexisNexis Legal & Professional, a content and software provider for business and legal professionals, announced on November 23 that it acquired privately held Lex Machina Inc., a software-as-a-service provider of data analytics for patent and trademark litigation data. Lex Machina, based in Silicon Valley, will operate as a stand-alone entity in the North American Research Solutions group within LexisNexis Legal & Professional. Terms of the deal were not disclosed, but the value of the transaction to both companies is readily apparent.
Lex Machina creates structured data sets from public data, such as PACER (Public Access to Court Electronic Records), to help lawyers predict the outcomes of different legal strategies by mining, tagging, categorizing and enhancing millions of federal court dockets and documents. The technology allows lawyers to make data-driven decisions and develop litigation strategies from data on case law, parties and counsels, jurisdictions and presiding judges. From historical case law and docket information, Lex Machina subscribers can predict the most favorable jurisdictions to bring cases, glean the most successful motions and arguments before judges, and sleuth opposing counsel strategies from prior cases. (For more about how Lex Machina works, see my fellow columnist Zach Abramowitz’s conversation with Owen Byrd, the chief evangelist and general counsel of Lex Machina.)
Subscribers to Lex Machina include IP owners, such as Cisco Systems Inc., Google Inc., GlaxoSmithKline, HP, IBM Corp., Microsoft Corp., Nike Inc. and their outside counsel, which read like a Who’s Who in IP litigation from the Am Law 100, including Akin Gump Straus Hauer & Feld, Baker & Hostetler, Fenwick & West, Kilpatrick Townsend & Stockton, Proskauer, Ropes & Gray, Wilson Sonsini Goodrich & Rosati, and Winston & Strawn. With that lineup, where can Lex Machina go with LexisNexis?
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There’s only so much public data you can cost-effectively crunch, analyze, repackage and license to subscribers who are willing to pay premium prices. IP litigation data is an obvious choice. IP cases involve bet-the-farm issues where clients want some validation and certainty of a particular litigation strategy before they proceed and they are willing to pay for it. Although PACER has a plethora of litigation data to process, it’s not clear that non-IP cases would generate sufficient subscribers to pay for Lex Machina’s costly data processing, normalizing and analysis. Next up: private data.
“The only thing inhibiting our entry into other areas of the law is access to content,” said Josh Becker, CEO of Lex Machina. “By joining the LexisNexis family, we will accelerate the introduction of Legal Analytics to more practice areas and enhance insights for our customers with the advanced technology of the Lexis Advance platform.”
The combination of LexisNexis content with Lex Machina’s technology can create data analytics products for a variety of practice areas. Lexis Advance is a huge pool of structured data for Lex Machina’s analytical algorithms. Since LexisNexis normalizes and structures the data XML, Lex Machina will not incur hefty data processing and normalization costs. Hence its technology may be available to non-IP litigants at more affordable prices.
LexisNexis also has court dockets and documents from its CourtLink product to give Lex Machina tech more lawyer and law firm performance data, legal market trends, and judicial outcomes to enable lawyers to make more critical and perhaps nuanced decisions about cases. Lex Machina’s technology may also enhance existing LexisNexis analytical products, including MedMal Navigator, Patent Advisor and Verdict & Settlement Analyzer. And they may do so as a value-added provider, such as Law360, another LexisNexis stand-alone company.
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Lexis Advance subscribers see Law360 headlines in their subscriptions and when they click the links they are seamlessly transferred to Law360.com. But they need a Law360 subscription to access the full content.
Like Law360, Lex Machina will gain access to LexisNexis subscribers already paying a premium for data, assuming they will pay more for analytics. It’s a good bet. Attorneys know the value of information that can give them an edge in litigation. Plaintiffs’ attorneys partner with local attorneys to gain better knowledge of forums and judges. With Lex Machina, they can choose the most receptive forum for their pleadings, apply motions more readily acceptable to judges, and perhaps develop a winning litigation and settlement strategies.
The LexisNexis-Lex Machina deal further validates the ability of the big legal content and software providers — such as Bloomberg, LexisNexis, Thomson Reuters, and Wolters Kluwer — to snatch up new technology for their customers and extend the acquired technology beyond their limited value chain of content and customer base. Earlier this year, Bloomberg acquired Exemplify, Thomson Reuters acquired Business Integrity, and Wolters Kluwer acquired SureTax, but only LexisNexis appears to let acquisitions continue as standalone companies.
For other takes on the Lex Machina acquisition, see Bob Ambrogi and Casey Sullivan.
LexisNexis Acquires Premier Legal Analytics® Provider Lex Machina [LexisNexis]
LexisNexis VP Steven Errick Discusses Lex Machina Acquisition [Law Sites]
Access to Justice Problem Fueled LexisNexis, Lex Machina Deal [Big Law Business / Bloomberg BNA]
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Attorney Sean Doherty has been following enterprise and legal technology for more than 15 years as a former senior technology editor for UBM Tech (formerly CMP Media) and former technology editor for Law.com and ALM Media. Sean analyzes and reviews technology products and services for lawyers, law firms, and corporate legal departments. Contact him via email at sean@laroque-doherty.net and follow him on Twitter: @SeanD0herty.
