The legal industry is buzzing with merger and acquisition activity. Recently, we have heard about Iron Mountain’s acquisition of Stratify, Inc., Lexis Nexis’ continued M&A path with recent deals for Redwood Analytics and UK-based practice management company Axxia, and Dell Inc.’s plans to purchase e-mail continuity provider MessageOne, Inc.

With all this activity and no sight of a slowdown, the discussion focused on why these acquisitions are taking place and what effect they have on the industry. The acquisitions serve to either grow market share, acquire unique technology, expand a presence in an untapped or under serviced market (i.e., Lexis’ acquisition of Axxia) or all of the above. How can this be done while fulfilling the “we are doing this in the best interest of our client base” promise? This is a tricky one since the success stories of successful company acquisitions and subsequent assimilations seem to be few and far between.

Many of the M&A scenarios discussed focused on companies in the same space, but what about organizations outside of the legal vertical looking to gain market entry by acquiring legal technology assets? To a certain degree, global professional services software giant SAP has tried this several times in the US, but with limited success. In the case of SAP, the issue seemed to be the limited market potential for their enterprise software versus the failed acquisition of an established player. The question of such M&As having success in the future depends greatly on the strategy behind the merger … an attempt to buy into the market or the goal of transitioning a proven technology from a different vertical into a lucrative legal technology market. Both strategies include their challenges, but the latter has historically proven to be the bigger uphill battle.

What’s going on with EDD market M&A? This is a fascinating area to look at since M&As here are accelerating as well (FTI Consulting acquiring Ringtail Solutions; Wolters Kluwer purchase of CT Summation; Lexis purchase of Concordance) with many more to come. With an enormous growth rate of vendors entering the space offering EDD/litigation support technology and services who knows when things will slow down.

Food-for-thought: What if there was more accountability for companies to fulfill their M&A client promises? How can law firm and corporate clients – the software and service end users – express their dissatisfaction with constant corporate merger moves when and if they are disappointed with the new changes/direction?