Jack Newton, CEO and co-founder of Clio, in 2023. Clio has made its second major acquisition of 2025 with the purchase of AI legal software company vLex.The Globe and Mail
Legal-software company Clio, one of Canada’s largest private software companies, has made its second transformative acquisition this year, paying US$1-billion for vLex LLC, maker of an artificial-intelligence tool that keeps lawyers from accidentally citing fake court rulings.
The deal expands Burnaby, B.C.-based Clio (officially named Themis Solutions Inc.), which sells practice management software to lawyers, into a new area and for the second time in 2025 doubles its potential market.
It also pits Clio against heavyweight rivals: Canadian legal software giant Thomson Reuters Corp. and Relx PLC’s LexisNexis unit. (Thomson Reuters’s controlling shareholder, the Thomson family, owns The Globe and Mail)
The acquisition, Clio’s sixth, brings “the business of law and the practice of law capability under one roof,” chief executive officer Jack Newton said in an interview.
“We are reforming the company and reshaping it with AI at its heart. It puts us on an entirely new trajectory.”
Clio said Monday it had signed a definitive agreement to buy Barcelona-based vLex from European private equity firm Oakley Capital for stock and cash.
Clio won out over at least one other bidder, San Francisco-based Harvey, which last week announced a strategic alliance with LexisNexis. Clio and Harvey are both worth billions of dollars based on recent financings.
CIBC Capital Markets analyst Scott Fletcher said in a research note that the Clio and Harvey deals “have the ability to alter the competitive landscape,” for Thomson Reuters, one of Canada’s most valuable public companies. He added that while its AI tools have performed well and accelerated its growth, Thomson Reuters “will need to continuously improve its product to keep up with peers.”
Mr. Newton declined to comment on how Clio, with US$300-million in annual recurring revenue, would finance the deal, nor did he provide any financial information about vLex. Clio does have debt facilities and deep-pocketed backers including New Enterprise Associates, Goldman Sachs Asset Management, TCV, JMI Equity and T. Rowe Price Associates, Inc.
Until now, Clio has sold what it calls an operating system for law firms. Its cloud-based platform is used by lawyers to manage their practices, including scheduling, bookkeeping, accounting, billing, client onboarding, document and case file management and advertising.
The profitable company is one of more than 70 private Canadian tech enterprises to surpass US$100-million in annual revenue, and a likely candidate to go public when markets warm up. Last year Clio did a US$900-million secondary financing that saw New Enterprise Associates buy out employees and early investors.
During its first 17 years, Clio focused on small- to medium-sized law practices. Then in March it bought Manchester, U.K.-based Sliced Bread Ltd. (known as Sharedo), which targets large, global law firms. That deal doubled Clio’s potential market. More than 200,000 lawyers now use Clio.
vLex is a different business. The 350-person company, founded in 2000 by brothers Lluís and Angel Faus, maintains a global law library of one-billion-plus legal documents. vLex focused outside the U.S. until 2023, a year after its sale to Oakley, when it merged with Washington-based Fastcase, giving it access to more than one million lawyers in that market.
At the same time, vLex was developing a generative AI-based virtual assistant known as Vincent for legal professionals to automatically read cases, create research memos, build arguments, flag potential legal issues, cite authorities and draft documents.
Thomson Reuters and LexisNexis have both invested heavily in AI in recent years and created tools similar to Vincent while also building in features to prevent a common problem with the large language models that power them: their propensity to make up answers. Those so-called hallucinations have led to embarrassment for lawyers when they filed documents in court citing fictional cases conjured up by AI.
Nonetheless, lawyers are rapidly adopting AI tools. Buying vLex establishes for Clio one of the most important strategic advantages in the age of AI, which is the vast amount of data from the acquired company’s vast law library, Mr. Newton said. He said Vincent, used by thousands of lawyers, “enables for fully hallucination-free AI where citations are grounded in case law and lawyers can rest easy that” what it produces is trustworthy.
Vincent is still a nascent business with revenues that are “not that relevant,” Mr. Newton said. He described Clio’s investment as “a venture bet. It’s this extremely early but extremely promising and rapidly growing AI capability and business they’re building that we acquired.”
The deal is expected to close this year. Clio was advised by Goldman Sachs and law firms Osler, Hoskin & Harcourt LLP, Wilson Sonsini Goodrich & Rosati and Gowling WLG. vLex used J.P. Morgan as its financial adviser.