If you thought the legal industry was immune to digital transformation, think again. A combination of technology, specialization, and client demands has prompted the industry to adapt to more efficient practices, from value-based billing to virtual law firms.
Investors are taking advantage of this new trend.
Carrick Capital Partners, a Newport Beach-based private equity firm with $1 billion in assets, announced it has become a majority partner in Factor, a leader in next-generation solutions for complex legal work.
While the terms were not disclosed, the deal is expected to close by October. The newly minted partnership represents one of the biggest investments in the global legal solutions market. According to the Orange County Business Journal, Carrick’s third fund typically invests $40 million to $70 million in problem-solving software companies.
“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,” Co-founder of Carrick Jim Madden said in a statement.
Factor will use the capital to expand its global presence and accelerate its development of innovative legal solutions for customers spanning enterprise, life sciences, and financial services industries.
Founded in 2000, Factor (formerly Axiom) is an on-demand corporate legal talent company. Factor serves more than half of the Fortune 100, reported 2018 revenue run rates of $360 million, and has been touted as “law’s next big thing.” Only hiring 5% of attorney applicants, the company has garnered a reputation for having the best talent in the industry. On average, Factor lawyers have 15 years of experience and range from graduates to corporate general counsel. It also has a considerably diverse workforce. In 2019, Forbes reported that Factor’s lawyers are made up of 55% women.
Since then, Factor has rebranded to offer managed services for ongoing transactional legal work and contracts projects for event-driven needs like new regulatory requirements.
“The new chapter in our partnership with Carrick positions us to bring new client solutions to the market at an unprecedented scale, and fuel even faster growth than we achieved in our first six months as a rebranded company,” said Varun Mehta, Chief Executive Officer of Factor.