Double Acquisition Highlights How Legal Industry Is Slowly Embracing AI

Legal technology provider Reveal, which uses artificial intelligence and analytics tools to aid the legal discovery process, said Tuesday it has acquired Logikcull and IPRO,two other vendors in the e-discovery space.

After the deal, Revealwill be worth more than $1 billion, according to private-equity firm K1 Investment Management, Reveal’s majority stakeholder. K1funded the transactions.Other terms of the deal were not disclosed.

Tarun Jain, principal at K1, said the investment is a bet on the growing influence of digital tools and AI in particular on the legal industry—a historically slow-to-adapt sector.

“Attorneys have been behind the eight ball on technology,” said Reveal founder and chief executive Wendell Jisa. Now, he said, the proliferation of digital data, in the form of emails, text messages and other files, is forcing them to catch up.

Reveal, founded in 2009, provides a cloud software platform that helps firms automate the onerous, document-heavy practice of legal discovery, said Jisa. On the platform, organizations, including law firms, corporate legal departments and government agencies, can collect all of a case’s relevant documents and data and use AI and other tools to quickly search and analyze them, he said.

Logikcull, founded in 2004, provides a similar cloud service, typically for smaller and medium-size businesses. IPRO, founded in 1989, provides a similar tool for on-premises use.The addition of Logikcull means the combined company will now be able to target a range of customers—ones with large, complex data sets and those with smaller, simpler ones—while IPRO brings a large global customer base as well as several new tools, Jisa said.

This is not the first time Reveal has made waves in the legal vendor space; it acquired analytics and data visualization software company Brainspace in 2021.

The new company will have a presence in more than two dozen countries and serve more than 4,000 clients, Revealsaid.

Legal remains an incredibly challenging industry to sell software to, said Alan Pelz-Sharpe, founder of business advisory firm Deep Analysis. Typically, every partner’s permission is required before a law firm makes a purchase decision, he said.He added that new software is an easier sell now that the average age of partners is decreasing and a greater portion of them have grown up in the digital age.

Broadly, the concern has also extended from a question of whether attorneys can trust AI to what it will mean for their business models, said Logikcull’s former CEO, Andy Wilson, who will take on a temporary advisory role at the new company. The more AI creeps into use in legal settings, speeding up or completely automating certain portions of the workflow, the more attorneys may have to rethink the traditional idea of the “billable hour.”

“Why hire the law firm to spend weeks or months to find evidence buried in millions of files when AI tools can do it in minutes or seconds?” he said.

Law firms increasingly have been testing new AI tools, but the tools raise potential pitfalls if used incorrectly or without sufficient oversight. A Manhattan judge in June issued sanctions against two lawyers who cited fake ChatGPT-generated legal research in a personal-injury case.