EXAMINING THE CASE FOR LEGALWARE 8v .4 iiva A mirova Stock prices for legal software firm LegalWare continue to climb as they are fast becoming one of the most talked about companies in the commercial software market. Investors like their reliable end-of-year revenue figures, which have seen year-on-year growth since 2014, as well as their profitability levels, which are healthy for an expanding company in this industry. LegalWare now has 8 million shares, giving it an impressive valuation at current prices. We have seen boom and bust cycles in the software market before, though, and as such always advise caution and make the case for keeping a diversified portfolio when investing in this sector. Although still susceptible to market swings and paradigm shifting change, stocks in the commercial software sector tend to be more stable than their consumer software counterparts. Steady growth in both revenues and stock prices across the sector since 2014 will attest to this. As with technology related companies, LegalWare will be less of a reliable bet than those in less rapidly changing industries; however, given the figures we've seen so far, it is interesting to say the least. Commercial Software Stock Index LegaIWare StOCk Price ($1 Performance at End of Year\" End Of Each Year , F. 1.3 21032 1" ' 180.02 190.19 200.05 2014 2015 2016 201? 2018 2019 2020 2014 2015 2016 201? 2018 2019 2020 *Srock indexes are caicuiotea' using the average change in aii stock price values across oil companies in on industry Revenue generated by each segment of the Market share of the legal segment of commercial software industry the commercial software market (as a percentage of total revenue) (based on revenue) Other Other Finance 10% 9% 11% Data Tec Professional 21% Services LegalWare 15% Education 20% 18% Legal 15% LawSolut Solicit 10 11% 38% Retail 32% Size of the Commercial Software Industry (total revenue of all companies, in $ billions) 50 37.8 39.1 40 31.6 33.7 28.5 30 21.1 24.3 20 10 0 2014 2015 2016 2017 2018 2019 2020 Revenue and Profits for LegalWare (in $ millions) 1173 1200 938 1000 751 800 600 541 601 498 513 400 108 180 178 235 91 103 135 200 0 2014 2015 2016 2017 2018 2019 2020 Revenue Profits