Saturday, January 21, 2012

Document Solutions Inc. Merges with Knoxville Document Pros

Consolidation in the document management industry continues as two businesses with operations in Knoxville have announced a merger.

Document Solutions Inc., headquartered in Nashville with offices in Knoxville and Cincinnati, is merging with Knoxville Document Pros.

The companies will operate under the Document Solutions banner. Terms of the merger were not disclosed.

Document Solutions has carved out a niche in providing electronic discovery, digital forensics, data recovery and traditional document services for the legal industry. The company was founded in Nashville in 1999 and opened its Knoxville office in September 2007.

Document Solutions' announcement follows the launch last year of several initiatives, including the Smart Sampling Process, Intake Program, ESI Managed Services and the DSI Remote Discovery Platform.

Knoxville Document Pros began in 1998 and is owned by Eric Rose. It began with most of its clients being law firms. It has specialized in scanning, copying and imaging services. The company has grown by following the burgeoning e-discovery field.

Document Solutions said under the auspices of a single umbrella the company expects to leverage the two companies' capabilities to continue growing and adapting to the evolving document management market.

Document Solutions' Knoxville partner and co-owner Jeff Stoneking cited Document Pros' strong reputation and customer base as compelling reasons for the merger.

"It's great news for DSi's East Tennessee clients that one of our outstanding competitors has become an outstanding partner," Stoneking said, "Eric has been in the litigation support industry for over 20 years, he's run multiple businesses, from photocopying to e-discovery, and he's had a lot of success with it. Most importantly, he shares DSi's commitment to uncompromised customer service."

Document Solutions' co-founder and Chief Financial Officer Kevin Tyner said the merger is part of his company's larger commitment to expanding its reach and scope in the e-discovery industry.

"Our Knoxville location has been a critical part of our success in East Tennessee and the greater Southeast, and the established track record of top-quality services that Eric and Knoxville Document Pros bring to DSi will make our company even stronger there," Tyner said in a statement.

Rose said East Tennessee corporations, small businesses, engineering firms and law firms will have access to advanced proprietary technology with the merger.

"Our clients will benefit immediately from DSi's incredibly innovative, cutting-edge services in e-discovery and digital forensics," Rose said.

After the merger, DSi Knoxville will have 12 employees and five owners. Rose and three former Knoxville Document Pros employees vacated their former office on Gay Street to move into the DSi space in First Tennessee Plaza, 800 S. Gay St.

Thursday, January 19, 2012

Cinven takes out Intermediate Capital Group to Acquire CPA Global

On February 08, 2010 we reported that Intermediate Capital Group had acquired a significant stake in CPA Global. Now the European private equity firm Cinven, which is headquartered in London, has purchased intellectual property (IP) management business CPA Global.
 


While financial details for the deal are undisclosed the transaction comes two years after Intermediate Capital Group acquired a minority stake in the company for £400 million. 
 


As part of the 2010 deal ICG took a 47 per cent stake while the management team, led by chief executive Peter Sewell, retained a 22 per cent share.
 


CPA Global provides clients in sectors such as telecoms and pharmaceuticals with IP management services and software to help protect rights and maintain value.
 


Stuart McAlpine, partner at Cinven, comments: 'CPA Global is an exciting primary opportunity to invest in a global leader in a market with defensive qualities and attractive growth prospects.


'The business has achieved an exceptional financial performance and is highly cash generative.'
 


McAlpine says that the acquired business fits with Cinven's strategy of investing in companies where it can accelerate its global presence using Cinven's sector expertise and Asian portfolio capacity.


According to Cinven, the volume of patents granted worldwide has increased by 5 per cent annually and has significant growth projected in China and other Asian economies.


Data from Thomson Reuters shows that China surpassed both the US and Japan for the total number of patents filed in 2011.


Sewell adds: 'Companies around the world are increasingly recognising the value of IP.


'In recent years, we have seen how the patent renewal market and protection of clients' IP remain business critical throughout the economic cycle.'

Litigation Support Market 2012 Predictions

Greater Competition, Technology-based Offerings and Regulatory Amendments seen as factors altering the 2012 Litigation Support Outsourcing Market, reports legal management consultancy Fronterion LLC

As reported on the CPA Global website "LSO’s expansion into new legal disciplines next year will take place against the backdrop of a tougher contest for clients’ hearts and minds, says forecast"

Changes will sweep through the legal services outsourcing (LSO) sector in 2012 as competition for potential clients heats up, according to legal management consultancy Fronterion LLC. In its annual overview of LSO (also known as legal process outsourcing, or LPO) the organisation highlights a move towards technology-based offerings; an evolution beyond litigation support; and forthcoming regulatory amendments as factors that will alter the sector’s landscape. Meanwhile, clients will seek to work around law firms and work directly with providers, even as those law firms attempt to integrate providers straight into their services: two trends that will make for a more vibrantly competitive industry.

In its 10 for 2012 paper, which follows up on forecasts published for 2010 and 2011, Fronterion also suggests that multishoring – previously covered on NewLegal Review – will continue to define the shape of LSO, as clients seek to allocate legal tasks between onshore and offshore models in ways that would produce the maximum savings and efficiency.

That trend, in Fronterion’s view, is likely to govern the overall direction of LSO in the next 12 months.

A technological future

As the multishore approach becomes more prevalent there will be a noticeable passing of the old order, which will see litigation-support functions that formed the bedrock of LSO in its earlier days giving way to newer and more technical services. The paper provides several reasons for this outlook. In the main, it says, a sector-wide dependency on litigation support is unsustainable at a time when commoditisation of the legal tasks involved has begun to stagnate. Furthermore, the business of executing of those tasks could be leaving the remit of flesh-and-blood employees entirely: in the long term, Fronterion says, ‘certain manual LSO services may become automated or eliminated altogether by computer programs that cost less than even the cheapest worker’.

With that in mind, the paper predicts, bundled LSO services and technology offerings ‘will be an essential differentiator for outsourcers in 2012’. Applications that providers may wish to offer include contract-management repositories; review platforms; and legal research tools that can trawl through thousands of documents for key themes and phrases. At the same time, providers will diversify their legal services into areas such as due diligence on mergers and acquisitions (M&A), as they aim to build from the traditional area of litigation support. ‘Expanding service adoption in 2012 will be an uphill battle,’ the paper stresses, ‘but worth the effort.’ The key focus for providers must be to set out a ‘progressive value proposition’ for clients.

‘Supreme validation’


LSO’s growing profile in the wider legal sector has captured the imaginations of law firms – to the extent that, next year, imitation is likely to be the sincerest form of flattery. In Fronterion’s forecast, LSO-style approaches to legal business are going to be replicated by traditional firms, who will implement detailed process management, regular reporting and scalable, transparent services in order to win over clients. This will be the strongest sign yet from law firms that they recognise how outsourcing providers have changed delivery expectations among corporate legal departments and redefined perceptions of value – a watershed that the paper calls ‘a supreme validation of the LSO approach.’

Other law firms, says the forecast, will choose to include workflow from LSO companies on key tasks in their initial pitches to prospective clients – a pre-emptive measure that, again, acknowledges that LSO techniques will naturally be sought after by in-house lawyers from the word ‘Go’. As Fronterion notes, ‘this represents a major milestone for the industry and expands opportunities for growth.’

However, the development could just as easily become a wellspring for intensified competition: law firms pushing for early integration of LSO companies will jostle for position with clients opting to make direct contact. In this climate, success will be determined by which provider will win which chunk of legal work from which corporate client – ideal preconditions for a hotly contested market, in which the relationship between providers, law firms and clients will be transformed.

Appropriately, then, it will fall to regulators in the US and UK to determine how that relationship should be managed. The American Bar Association is already scheduled to publish recommendations for reworked LSO professional guidelines in August. Fronterion also considers it likely that, in the UK, the Solicitors Regulation Authority (SRA) will be called upon to offer similar ideas as the full implementation of the 2007 Legal Services Act continues to unroll – a subject that NewLegal Review has covered in detail very recently.

In the forecast’s vision for 2012, LSO’s high profile in the legal sector will continue – along with its facility for sparking debate on how legal services should be offered even further into the future.

Fronterion’s predictions for 2012

1. A profitability squeeze for LSO
Shrinkage in the wages gap between developed and developing economies will take a toll on profit margins in the sector.

2. A growth beyond litigation support
Contract management, due diligence and mergers and acquisitions (M&A) functions will become more prominent in the LSO sector as it strives to be more sustainable.

3. Technology to combine with LSO
Innovative software offerings to assist clients’ legal-management capabilities will become an essential market differentiator for service providers.

4. Wider adoption of LSO techniques
Law firms and legal professionals of all kinds will increasingly use LSO-style project-management methods in their approaches to process and reporting

5. Law firm insurers to target LSO
Perceived risks stemming from an increased usage of legal outsourcing services will be cited in marketing campaigns by insurance firms.

6. Changes in the executive ranks
A focus on more operationally minded leadership, in which executives will focus on efficiency and profitability, will cause a shift from the entrepreneurial ethic that has so far dominated the helms of major LSO providers.

7. LSO to face stiffer competition
Law firms will pre-emptively include LSO providers in their offerings to meet growing client expectations for lower-cost services, leading to a proliferation of LSO usage. As such, competition will be busier, and more varied.

8. A ‘winner-takes-all’ sector
The economic climate likely to prevail in 2012 will make it harder for new, stand-alone LSO vendors to attract the capital necessary to compete with the sector’s largest players. This will benefit the established hierarchy.

9. Changing professional guidelines
Forthcoming results of LSO studies conducted by US and UK regulatory authorities will clarify dos and don’ts for the sector’s practitioners.

10. Evolution of the law firm-client relationship
Whereas the typical triumvirate relationship has seen law firms engage LSO providers on behalf of in-house legal departments, 2012 will increasingly see those departments hiring LSO providers directly.

Monday, January 16, 2012

Symantec Buys LiveOffice for $115M

Symantec has acquired email archiving specialist LiveOffice for $115 million, and intends to use that software to put e-discovery applications in the cloud, officials said today.

The pairing had long been rumored, as the companies have a history together. Symantec began reselling LiveOffice's technology in 2010, later rebranding it as Enterprise Vault.cloud, while LiveOffice CEO Nick Mehta and Vice President of Sales and Business Development Jim O'Hara both previously worked at Symantec.

Symantec bought another email specialist, MessageLabs, for $695 million in 2008. But that deal was more focused on security products. The current deal is unique because of LiveOffice's focus on e-discovery, which can be used with Symantec's Clearwell Systems subsidiary acquired for $390 million last year.

"Over time it will be a platform for a hosted Clearwell, which will be really interesting," said Symantec's Brian Dye, vice president, information intelligence group, in Mountain View, Calif. However, "Whether we can get it done this year is not clear," he acknowledged.

Many e-discovery service providers already sell the eponymous Clearwell E-Discovery Platform on a hosted basis, but Symantec's integration would be deeper because of proprietary technology that shares data between the applications, Dye said. The software will share metadata about a file's access and history, and will allow users to eliminate irrelevant data, rather than simply acting as a bit mover, he noted.

That plan, for what's known as connector software, is similar to what Symantec previously offered through a partnership with Austin, Texas-based StoredIQ. That partnership ended when the Clearwell deal happened because the companies compete. Meanwhile, Symantec will continue selling its own connector product, Discovery Accelerator, to other e-discovery companies, Dye added.

Monday, January 09, 2012

Siris Capital Buys Applied Discovery (ADI)

LexisNexis has sold its Applied Discovery division to equity firm Siris Capital, the companies said Friday, clearing the way for Lexis' Concordance Evolution to be a flagship e-discovery product.

Lexis acquired Applied, one of the early leaders in e-discovery, for a reported $95 million in 2003. But there were clashing corporate cultures over the years, including as recently as last year, when Lexis and Applied chose competing partners for predictive coding technology. Lexis also invested in Concordance until the review software had features overlapping Applied's Discovery Leverage, contributing to Applied becoming expendable, sources said.

Terms of the sale to Siris, in New York, were not disclosed, and Siris did not comment by press time. The deal is Siris' second in three months, having acquired cellular equipment specialist Tekelec in November for $780 million.

However, "Siris [has] a proven record in stabilizing and growing their acquisitions with infusions of talent, vision and capital -- for organic growth as well as for growth via acquisitions," Lexis and Applied said in a joint statement. "[C]urrent work plans remain in place. The organization will also move forward to offer customers more flexibility, third party tools and an increased focus on managed review services."

Bellevue, Wash.-based Applied also has a new CEO -- Ramana Venkata, who replaced Ira Herman, company spokeswoman Lindsay Perrault said. Venkata founded e-discovery company Stratify in 1999 and remained through its $158 million acquisiton by Iron Mountain in 2007. He left in 2010, and the Stratify unit was later sold to Autonomy for $380 million.

Monday, January 02, 2012

eDiscovery Company Epiq Systems Acquires De Novo Legal

Kansas City, KS (December 28, 2011) – Epiq Systems, Inc. (NASDAQ:EPIQ), a leading global provider of technology solutions for the legal profession, today announced the acquisition of De Novo Legal LLC, a significant U.S. e-discovery provider with particular prominence in managed review services. Epiq paid closing consideration of approximately $68 million which was funded from the company’s credit facility. The transaction also includes a deferred cash component and an opportunity for contingent consideration based on future revenue growth.

With this transaction, Epiq further strengthens its leading global e-discovery franchise, providing corporate legal departments and law firms with full-service capabilities to manage electronic information for discovery, investigations, regulatory issues, compliance, and related legal matters.

De Novo augments Epiq’s capacity for managed review services and broadens Epiq’s e-discovery customer base. De Novo has document review centers in key strategic locations in the United States and is among the largest providers of managed review and staffing services. De Novo also offers clients e-discovery processing and hosted review platforms. For 2011 on a pro forma basis, De Novo represents an approximate 30% to 40% revenue increase to Epiq’s projected standalone e-discovery segment.

Epiq originally introduced an organically developed service extension for managed review in 2009, which has grown consistently since its inception. This acquisition positions Epiq to offer unrivaled throughput and responsiveness to customers from multiple domestic and overseas locations.

Significant subject matter expertise combined with scale, reach and capacity are important attributes of Epiq’s worldwide e-discovery business and constitute key competitive differentiations. Whether for individual complex engagements or for continuing relationships with multinational corporations or global law firms, the availability of end-to-end services and choice of multiple technologies positions Epiq in the top bracket of market participants. The company has full-service e-discovery operations in New York and Phoenix domestically, and London and Hong Kong internationally.

Kenyon Group, Inc. acted as financial advisor to De Novo Legal and arranged the transaction.