Investment in alternative legal services providers stepped up yesterday after a US private equity company took a majority stake in Factor, the managed services firm that used to be part of Axiom.
With offices in New York, Chicago, London, Belfast and Warsaw, Factor is now owned by Carrick Capital Partners, an investment firm focused on software and software-enabled businesses with over $1bn in assets under management.
There was no figure put on the deal, which is expected to close by October, but in a statement the firms said it “represents one of the biggest net new investments in the global legal solutions market”. Carrick was an existing investor in the company.
It said the investment would allow “immediate” expansion globally and accelerate development of “innovative, large-scale, customised, legal solutions for clients in the enterprise, life sciences and financial services sectors”.
Factor is not a regulated law firm, although it employs more than 500 lawyers, legal specialists, technologists, and process consultants.
It used to be called Axiom Managed Services and was spun off from the ‘New Law’ pioneer in February 2019, before rebranding at the start of 2020.
Factor offers managed services for ongoing transactional legal work and contracts projects for event-driven needs like new regulatory requirements.
It works with both general counsel and law firms – in April, it entered into a non-exclusive partnership with Allen & Overy (A&O) to help financial services providers deal with the upcoming transition from the London Interbank Offered Rate (LIBOR) to new benchmarks.
Its analysis suggested that 40% of the 100m contracts using LIBOR have no language dealing with cessation of the benchmark and will require remediation prior to it being discontinued at the end of 2021.
Varun Mehta, chief executive of Factor, said: “The new chapter in our partnership with Carrick positions us to bring new client solutions to the market at unprecedented scale, and fuel even faster growth than we achieved in our first six months as a rebranded company.
“Factor has the geographic reach, domain expertise and financial backing to provide our clients with the industry’s most innovative solutions. We fully expect to leverage this investment into larger opportunities, and more focus on our customers and our mission in transforming the way legal solutions are delivered for general counsel and the companies they serve.”
Carrick co-founder Jim Madden said: “Our move to become majority shareholder of Factor was a strategic decision based on the company’s unique track record of delivering differentiated solutions to the legal market.
“With their vision, deep domain expertise, and gold-plated client list, the Factor team combines sophisticated expertise, technology adoption and business process optimisation with a nuanced understanding of how lawyers and business leaders think.
“Their singular focus on bringing legal innovation to more complex work is unique in the market. With lots of players focused on the commoditised bottom, Factor has a huge growth opportunity in the much larger sphere of more complex work.”
Axiom founder Mark Harris will remain as chair of Factor’s board.