Thomson Reuters will acquire legal tech startup Casetext for $650M
Thomson Reuters announced Monday that it had reached an agreement to buy the legal tech startup Casetext for $650 million as part of its long-term investment in generative artificial intelligence.
The company said in a statement it has signed a “definitive agreement” and will close the transaction in the second half of 2023, subject to regulatory approval.
Casetext, a San Francisco-based startup, was founded in 2013 and has about 100 employees. It launched the legal AI assistant CoCounsel in March. The product, developed in a partnership with OpenAI and trained on the latest version of its GPT large language model, uses a chatbot interface to aid in legal research, document review and contract analysis.
“The acquisition of Casetext is another step in our ‘build, partner and buy’ strategy to bring generative AI solutions to our customers,” said Steve Hasker, president and CEO of Thomson Reuters, in prepared remarks. “We believe that Casetext will accelerate and expand our market potential for these offerings—revolutionizing the way professionals work, and the work they do.”
Thomson Reuters said in a news release the acquisition is part of an overall strategy to develop generative AI and includes integrating the technology into its products, partnering with other companies and buying up innovators like Casetext that have developed their own products.
Earlier this year, it announced that it would invest more than $100 million each year in the burgeoning technology, and in May, it said it had partnered with Microsoft to create a contract drafting plug-in for Word in Microsoft 365 Copilot.
In a statement, Jake Heller, CEO of Casetext, said his company had “harnessed the power of AI” for 10 years to assist attorneys with an “ultimate goal of increasing access to justice.”
“Joining Thomson Reuters is an incredible opportunity to advance our mission and the field of generative AI solutions exponentially, not only for lawyers but across professions, ensuring this revolutionary technology can benefit as many people as possible,” Heller said.
Thomson Reuters stated in slides published ahead of a Tuesday morning conference call that CoCounsel “will accelerate our ability to bring Generative AI capabilities to our portfolio and market,” and it plans to combine CoCounsel’s technology with Thomson Reuters’ “authoritative content and insights to bring significant productivity benefits for the legal industry.”
Heller, along with Casetext co-founders Pablo Arredondo and Laura Safdie, were ABA Journal Legal Rebels in 2017.
The buyout is another signal that the legal industry is going all in on generative AI, which many expect to transform the profession and the way attorneys work. In May, Thomson Reuters’ competitor LexisNexis launched Lexis+ AI, a chatbot for case research and document drafting.