Marking its third acquisition in the last year and its fourth since 2019, Onit, the Houston company that provides enterprise workflow products for corporations and corporate legal departments, has acquired Bodhala, a New York company whose SaaS platform provides in-house legal departments with AI-powered legal spend analytics, benchmarking and market intelligence.
Onit says that the acquisition “creates the most complete enterprise legal management solutions on the market, allowing corporate legal departments to evolve analytics into actionable intelligence to optimize outside counsel spend.”
Terms of the deal were not disclosed.
Onit already has its own suite of products for enterprise legal management, contract lifecycle management, and business process automation. In addition, last November, it acquired McCarthyFinch, provider of a suite of AI-driven contract management software, followed a month later by its acquisition of AXDRAFT, developer of contract automation software.
In May 2019, four months after private equity firm K1 Investment Management invested $200 million in Onit, it acquired SimpleLegal, a company that provides legal spend, matter and vendor management software to the mid-sized corporate legal market.
In May, following these acquisitions, Onit introduced a new product, InvoiceAI, which uses artificial intelligence for first-pass invoice review.
Within this suite of products serving large- and mid-sized legal departments, Bodhala would appear to be a natural fit. Its focus is on using data and AI to provide greater pricing transparency for buyers of legal services, and thereby help them source outside counsel at competitive and market-driven rates.
Analytics and Benchmarking
In an interview earlier this week with Eric M. Elfman, CEO and cofounder of Onit, and Raj Goyle, CEO and cofounder of Bodhala, Elfman said that he had been pursuing this acquisition for a couple of years because of the potential he saw for combining Bodhala’s technology with Onit’s storehouse of law firm billing data.
“We’re a store of electronic invoices,” Elfman said. “Tens of billions of dollars of lawyer bills have flowed between our law firm customers and our corporate customers.”
What Onit has, until now, been able to do with those bills is pretty basic, which is to review them for issues such as compliance with billing guidelines or unauthorized timekeepers, Elfman said.
But Bodhala takes that to another level, Elfman said, enabling legal departments to apply analytics and benchmarking to compare invoices and billing rates and gain greater market intelligence.
“It augments everything that SimpleLegal and Onit have been building over the years,” Elfman said. “It’s really the next evolution, above reporting — reporting is tactical, this is analytics and benchmarks.”
An Audacious Startup
He said Bodhala was a scrappy startup that had the audacity to think it could shape the buying behavior of the chief legal officers and general counsel of the largest corporations in the world, as it relates to the top law firms in the U.S.
“There was this notion that there was this inner sanctum and that you could never really get under the hood of the ‘should cost’ of a law firm,” Goyle said. “We had the audacity to say, ‘Bullshit, absolutely you can. This is the data revolution we’re living in.”
While it took some years for that message to catch on, catch on it did, Goyle said, leading to Bodhala experiencing 400% growth in revenue over the last 18 months.
He said he considered the ultimate validation of Bodhala’s mission to be its acquisition by Onit, which he described as a legal tech company “that is a rocket ship in its own right.”
“With Onit, you’re going to really have this holistic solution that can solve the pain points of the chief legal officer, the general counsel, the head of legal operations and — as Eric likes to say — ultimately the CEO, who is going to be happy because he or she can finally have confidence that the legal department runs like a business.”
Just as Onit maintained SimpleLegal as an independent subsidiary following its acquisition, it will do the same with Bodhala, and Goyle and his entire team will remain with the company in their current roles, with Goyle reporting to Elfman.
If anything, Elfman said, the acquisition will only accelerate additional hiring and product development at Bodhala.
Elfman said Onit would take a light touch to any technical integration for at least the next two quarters, but then begin to work more closely on how to take advantage of the synergies between the companies.
“If you look at what Bodhala does, they rely on data, electronic invoicing data, that either has to come from the law firms or the corporation,” Elfman said. “Onit has that data. Once a corporation says, ‘I want to deploy Bodhala,’ it’s a flipping the switch to allow access to that data. So, day one, we’re going to make it easier for Bodhala to execute on this information for Onit’s and SimpleLegal’s almost 600 legal department customers.
“Longer term, I think our vision is it ought to be one click. ‘Hey, I’m buying SimpleLegal. Click, turn on Bodhala. Bam, there’s my analytics and my benchmarking.’”
At the same time, Goyle said, Bodhala will remain independent and e-biller agnostic. He said the product syncs with a dozen or so e-billing systems and that a third of its client base uses no e-billing system. “That independence is very important for us and for Onit.”
“We’re terribly excited,” Elfman said. “This continues our trend of partnering up with disruptive young companies. What Raj and Ketan and Brad, the founders of Bodhala, have done is nothing short of incredible. So proud to join forces with him and team.”