Thomson Reuters Corporation has signed a definitive agreement to acquire legal tech research challenger Casetext for $650m cash.
Founded by CEO Jake Heller and CIO Pablo Arredondo in 2013 with a view to democratising legal research, Casetext uses AI and machine learning to help legal professionals conduct research and compose legal documents more quickly. Casetext employs 104 employees, and its customers include more than 10,000 law firms and corporate legal departments.
The proposed transaction is said to complement Thomson Reuters’ existing AI roadmap and builds on its recent initiatives, including a commitment to invest more than $100 million annually on AI capabilities, the development of new generative AI experiences across its product suite, as well as a new plugin with Microsoft and Microsoft 365 Copilot for legal professionals.
Casetext was granted early access to OpenAI’s GPT-4 large language model, allowing it to develop solutions with the new technology and refine use cases for legal professionals. Its key products include CoCounsel, an AI legal assistant launched in 2023 and powered by GPT-4 that delivers document review, legal research memos, deposition preparation, and contract analysis in minutes.
“The acquisition of Casetext is another step in our ‘build, partner and buy’ strategy to bring generative AI solutions to our customers,” said Steve Hasker, president and CEO of Thomson Reuters. “We believe that Casetext will accelerate and expand our market potential for these offerings – revolutionizing the way professionals work, and the work they do.”
“For the last ten years, we have harnessed the power of AI to build products that elevate the practice of law and enable attorneys to serve more people’s legal needs, with the ultimate goal of increasing access to justice,” said Jake Heller, CEO of Casetext. “Joining Thomson Reuters is an incredible opportunity to advance our mission and the field of generative AI solutions exponentially, not only for lawyers but across professions, ensuring this revolutionary technology can benefit as many people as possible.”
There will be many in the industry who feel that the legal research space needs an independent challenger, and with ROSS Intelligence no longer in business and Ravel Law having been acquired by LexisNexis, Casetext really was left carrying the flag.
In a blog post, the Casetext team said: “This is undeniably a highly successful startup exit. But we’re excited about this deal precisely because we won’t be “exiting.” Quite the opposite. Our entire team will join Thomson Reuters, together accelerating the revolution in legal tech. We’ll be able to realize much sooner all the potential we see for our AI legal assistant, CoCounsel, whose resounding success has brought us to this point. Most important, we’ll advance more quickly and completely toward fulfilling our vision of using the power of AI to help more attorneys do more and better work for more clients—the key to increasing access to justice for everyone.” The link to that blog post in full is here: https://casetext.com/blog/casetext-to-join-thomson-reuters-ushering-in-a-new-era-of-legal-technology-innovation/
Closing of the transaction is subject to specified regulatory approvals and customary closing conditions and is anticipated to occur in the second half of 2023. The acquisition follows the sale of Elite to TPG for around $500m.
Thomson Reuters will hold a conference call to discuss additional details related to the proposed transaction on Tuesday, June 27 at 9:00 AM EDT. A live webcast of the conference call will be available on the Investor Relations section of www.thomsonreuters.com.