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E-discovery consolidation: Merrill buys LextraNet

By contributing author Brad Blickstein, Blickstein Group, on legal service providers:

Consolidation in the electronic discovery industry has been a foregone conclusion for a long time, although a walk through the LegalTech show last month would contradict the theory. We all think it’s bound to happen as corporations take more control of the discovery process.

One example was announced on March 1: Merrill’s purchase of LextraNet. (Both companies are private; no financial terms were disclosed.)

The deal is interesting. LextraNet is basically a web-based repository, a tool which hosts documents and facilitates review. But Merrill already has one, called Merrill Discovery Navigator. It seems they are hoping to convince LextraNet clients to use Merrill for other discovery services, such as imaging, coding and processing.

Also, web-based repositories have functionality that extends well beyond e-discovery. They are useful for insurance, mergers and acquisition work, extranets and content management. This deal may lead Merrill past the discovery business.

My recent post (February 24, 2007) examined three schools of thought for process-oriented service providers: agnostics, builders and partners. It seems I forgot “buyers.” It will be interesting to see how these two companies integrate, and if they provide a bit of a roadmap for the consolidation we are all so sure is coming.

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