Sedgwick has signed an agreement to acquire Bottomline’s legal spend management (LSM) division for undisclosed terms amid a challenging year ahead.
Bottomline, a provider of business payments and cash management solutions, offers LSM services to the property and casualty insurance sector, supporting insurers, third-party administrators, self-insured entities and corporate legal departments with cloud-based software applications and legal bill review solutions.
Sedgwick intends to integrate its LSM technology infrastructure, including the Legal-X and Legal eXchange platforms, to help clients manage litigation costs.
Subject to regulatory approvals and customary conditions, the transaction will see Sedgwick operate the LSM business as a separate division. Sedgwick plans to transition approximately 300 LSM employees to ensure continuity of service for clients.
Through the acquisition, Sedgwick’s casualty clients are expected to benefit from the addition of legal bill review solutions, which will support e-billing, case management, reporting, analytics, and vendor management services.
“This transaction sets a new standard of excellence for Sedgwick, positioning us as the unmatched claims partner for organisations worldwide,” said Jim Ryan (pictured), chief operating officer at Sedgwick. “By integrating industry-leading LSM expertise in third-party legal bill review into our existing capabilities, we will elevate the value we bring in meeting the evolving needs of our clients and their customers.”
The acquisition was also described as “game-changing” for customers, with Bottomline CEO Craig Saks adding that the deal would allow his company to focus on business payments and cash management.
Morgan Stanley & Co. LLC and BofA Securities acted as financial advisers, and Simpson, Thatcher & Bartlett LLP provided legal counsel to Sedgwick. Deutsche Bank Securities Inc. served as financial adviser, and Kirkland & Ellis LLP provided legal counsel to Bottomline.
With “powerful economic forces” affecting the LSM environment this year, continuous evaluation of the process and technology, as well as being open to adopt fresh approaches to LSM is key.
According to Bottomline’s Legal Spend Management 2025 Outlook, the 2025 environment will both be a challenge and an opportunity for corporate legal departments.
Increased legal spend and workload due to an increase in expected litigation, as well as the complex corporate regulatory environment are among the hurdles that companies need to overcome this year. Many companies tend to rely on outside counsel for this due to their expertise - but this move puts more pressure on budget and staff.
The use of generative AI is also expected to become more prevalent as it comes with new efficiencies in law firm practices. However, this also poses a challenge to effectively reconcile productivity gains with fair billing practices.
Nevertheless, this challenging environment also presents opportunities for corporate legal departments to implement significant savings and operational improvements.
