Extract from Rhys Dipshan’s article “Bad for Innovation, Good for Business? For ALSPs, Market Consolidation Is a Mixed Blessing”
The legal tech and services market is no stranger to consolidation, with the past few years seeing a surge in M&A deals, spurred in large part by the market’s maturity and growing investor interest. But while such acquisitions are helping many legal tech and service providers expand to new heights, they’re not always welcome news.
Some alternative legal service providers (ALSPs)—themselves customers of legal tech tools—are concerned about the impact such market consolidation may have on legal tech innovation. But for all their worries, they also see more M&A deals as creating better business opportunities for smaller players in the market as well. While it may be too early to tell whether such predictions will come to fruition, it’s evident that the effect of a growing rush of M&A deals won’t be as clear-cut as some might think.
How innovation will fare with increased market consolidation, for instance, can depend on when and where one looks. QuisLex CEO Ram Vasudevan notes that in the short-term and on a micro-level, “certain mergers can provide nascent companies with the resources to survive and innovate.”