Why the Westlaw-Lexis duopoly has been unshakable (until now)

For decades, legal research in the United States has been dominated by two giants: Westlaw (Thomson Reuters) and LexisNexis (RELX Group).

This duopoly hasn't persisted by accident.

It's the result of two formidable moats that have made it nearly impossible for new entrants to compete effectively:

Moat 1: Data access

Building a useful legal research platform requires collecting case law from thousands of courts across the country, each publishing in different formats with varying levels of accessibility.

Some courts make their data freely available online, while others have exclusive rights deals or outdated systems that make it challenging to collect data. Despite the challenge, Westlaw and Lexis have spent decades building their databases. New entrants don't have the time or resources to build this, making it especially challenging for them to enter the space.

But the raw data alone isn't the only moat.

Moat 2: Making the data useful

Westlaw calls this process "KeyCite," while Lexis has a similar system called "Shepard's Citations".

This process involves analyzing how new judicial opinions treat previous cases — whether they affirm, distinguish, or overturn precedent — and has been obviously extremely resource intensive. Both firms have historically employed armies of legal professionals to read and analyze cases to help make the case data useful - although this work is increasingly shifting towards AI.

But despite the data access and data usefulness moats, there have been efforts to challenge Westlaw and Lexis: enter Ross Intelligence.

The cautionary tale of Ross Intelligence

Founded in 2014, Ross Intelligence rose to prominence as an ambitious AI-powered legal research platform that attempted to break the duopoly several years ago. Their innovation centered on using IBM Watson's natural language processing to allow attorneys to ask research questions in plain English rather than using complex Boolean search terms.

But when Ross approached Westlaw to license their data, they were promptly refused. Undeterred, Ross acquired data from a third party — data that had originally been scraped from Westlaw. Thomson Reuters (Westlaw's parent company) responded with a lawsuit that effectively ended Ross's existence in 2021.

This legal action created a temporary pause in innovation, until recently.

New challengers enter the arena

Despite these obstacles, the market's hunger for alternatives has fueled a new wave of competitors leveraging AI and novel approaches to data acquisition.

Among the most promising:

vLex

Perhaps the most legitimate third player in the space is vLex and their AI assistant, Vincent.

Vincent offers a global legal workflow assistant designed to enhance legal research and drafting processes. Its capabilities span multiple jurisdictions, providing access to legal information from over 100 countries and 200 jurisdictions, including all U.S. states. This makes Vincent AI particularly valuable for cross-border legal research and comparative law studies.

Vincent has received significant recognition in the legal tech industry, including being named the 2024 New Product of the Year by the American Association of Law Libraries.

Midpage

Midpage is making it easier than ever for litigators and law students to analyze and query complex case law.

They do this through their platform which combines traditional boolean search capabilities with advanced AI features. Unlike competitors, Midpage built its own case law database from publicly available sources like Court Listener, achieving coverage of over 10 million cases. Midpage's unique features include a grid-based search, AI-powered filters, proactive annotations, and seamless integration with Microsoft Word.

Midpage's platform positions it as a competitive alternative in the market.

The incumbents get serious about AI

Following the release of ChatGPT in late 2023, Westlaw and Lexis have gotten much more serious about improving their product suites with AI functionality.

Thomson Reuters acquired CaseText for $650M in August 2023

Recognizing the potential threat of new entrants, Thomson Reuters acquired CaseText for $650 million in August 2023. The market's assumption at the time was that Thomson Reuters would integrate CaseText directly into Westlaw, but instead, they've maintained CaseText (now branded as Co-Counsel) as a separate product from their Westlaw Edge platform, creating confusion among users who expected a unified solution.

From the outside, it seems like these are two products doing the same thing. In my opinion, it's a classic example of integration challenges within legacy incumbents.

RELX Group (LexisNexis's parent company) recently invested in Harvey

Harvey is the currently the leading general-purpose AI platform for law firms, having raised over $300M to date and strong market penetration among large firms.

Though today, Harvey lacks comprehensive case law data to be a true legal research tool, RELX Group’s investment signals a potential future where Harvey might expand into legal research, possibly with access to LexisNexis's vast data resources.

Why This Matters

The evolution of legal research tools isn't just about technology — it's about democratizing access to legal information. The current duopoly structure has resulted in prohibitively expensive tools that smaller firms and solo practitioners simply can't afford to access.

AI-driven solutions promise not only to break this pricing structure, but also to make legal research more intuitive and efficient.

Rather than Boolean searches and complex filtering, newer tools allow lawyers to ask questions in natural language and receive contextualized answers drawn from relevant case law.

For the legal profession, this shift represents both a challenge and an opportunity. The data moat remains a significant barrier, but as AI advances and creative approaches to data acquisition emerge, we may finally see meaningful competition in a space that has remained stubbornly resistant to change.