The managed services company Factor, one of two companies that spun off last year from legal services company Axiom, said today that one of its original investors, the investment firm Carrick Capital Partners, will multiply its stake in the company to become its majority shareholder.

Although the amount of the investment has not been disclosed, Factor said that the deal, which it expects to close by October, “represents one of the biggest net new investments in the global legal solutions market.”

Factor CEO Varun Mehta told me yesterday that he believes it is one of the most significant investments in the market of the past few years.

“This investment is a testament to the foundation that already existed, to the leadership team we’ve been able to build, and to the opportunity that exists and that we think we’re uniquely positioned to meet,” Mehta said.

Factor said that the infusion of capital will allow it to immediately expand its presence in the global market and accelerate its development of innovative, large-scale, customized legal solutions for clients in the enterprise, life sciences and financial services sectors.

CEO Varun Mehta

As indicated by its tagline, “Complex legal work at scale,” Factor distinguishes itself in the market through its focus on higher-end transactional work that would otherwise be handled by fairly senior legal counsel.

Carrick was one of the original investors in Axiom, where Factor got its start. After being spun off last year as Axiom Managed Solutions, the company changed its name in January to Factor, in a move it positioned as a relaunch. At the time, it said that Carrick and a second Axiom investor, Benchmark Capital, would be “doubling down” on the rebranded company and would remain long-term investors.

Mehta declined to comment on whether Benchmark will remain an investor after the deal closes. He said that Carrick will be buying out a number of current shareholders in order to build its majority stake.

Carrick cofounder Jim Madden said this latest investment was motivated by Factor’s “unique track record of delivering differentiated solutions to the legal market.”

“Their singular focus on bringing legal innovation to more complex work is unique in the market,” Madden said. “With lots of players focused on the commoditized bottom, Factor has a huge growth opportunity in the much larger sphere of more complex work.”

A Busy Year for Factor

It has been a busy year for Factor. Soon after rebranding in January, it named Mehta as its new CEO. He had formerly helped found the Clutch Group, an e-discovery managed services firm, and served as its executive vice president.

More recently, Factor added John Dillon as CFO, who was formerly divisional CFO of global consulting firm Mercer, and Roxann Erxleben as COO, who was formerly with Accenture and Axiom Managed Services.

Last month, Factor hired Ed Sohn, a veteran managed services executive who last year joined EY Law when it acquired Pangea3 from Thomson Reuters, as its head of solutions.

These executives will remain with the company, and Axiom founder and Knowable CEO Mark Harris will remain as chair of Factor’s board.

Asked whether the company plans more executive hires, Mehta said, “With this investment, it will give us the ability to take the market leadership status we have and build on it, including with more hiring.”

Factor employs 500 people who, until the pandemic, worked from six offices in Poland, Belfast, Chicago, Raleigh, N.C., London and New York. While most now work virtually, a very limited number have begun to return to on-premises work in the Poland office.

When Mehta joined Factor last January, he told me that the biggest challenge he faced to building the company was the high level of cautious skepticism among corporate counsel.

The biggest change since then, he said, is that because of the pandemic and its impact on their businesses and their legal departments, GC are now, more than ever, looking for new and better ways to get things done.

As for changes to Factor since January, Mehta says they have all focused on building on the foundation established nearly a decade ago when it was still part of Axiom.

“Our vision and mission from the day we started has remained steadfast,” he said, “but we’ve added a lot more meat to the bone.”

Photo of Bob Ambrogi Bob Ambrogi

Bob is a lawyer, veteran legal journalist, and award-winning blogger and podcaster. In 2011, he was named to the inaugural Fastcase 50, honoring “the law’s smartest, most courageous innovators, techies, visionaries and leaders.” Earlier in his career, he was editor-in-chief of several legal publications, including The National Law Journal, and editorial director of ALM’s Litigation Services Division.