Lawhive raises $12M to increase its legaltech AI platform for small corporations

UK-based legaltech startup Lawhive, which affords an AI-based, in-house “lawyer” by a software-as-a-service platform focused at small legislation corporations, has raised £9.5 million ($11.9 million) in a seed spherical to increase the attain of AI-driven providers for “predominant road” legislation corporations.

So far, most legaltech startups which have deployed AI have targeting the large, juicy market of “Huge Regulation” — giant legislation corporations which have a presence all through the nation or globally and are eager on pushing AI into their workflows. Such startups embody Harvey (U.S.-based; raised $106 million), Robin AI (UK-based; raised $43.4 million), and Spellbook (Canada-based; raised $32.4 million). However startups have paid scant consideration to the 1000’s of “predominant road” legislation corporations, which have far smaller budgets and are tougher to monetize.

Lawhive targets small legislation corporations or solo legal professionals working their very own retailers. Attorneys can use its software program to onboard and handle their very own shoppers, or can join Lawhive’s market to be matched with particular person prospects and small companies.

The startup says it applies a wide range of foundational AI fashions in addition to its personal in-house mannequin to summarize paperwork and pace up repetitive duties similar to KYC/AML, consumer onboarding and doc assortment for each legal professionals and their shoppers. The corporate says its in-house AI lawyer, “Lawrence,” is constructed on high of its personal giant language mannequin (LLM), which it claims has handed the Solicitors Qualifying Examination (SQE) with an 81% grade towards a passing grade of 55%.

“Just about all the present legaltech — AI firms like Harvey, Robin AI, or Spellbook — all go after the company market,” Pierre Proner, CEO and co-founder of Lawhive, instructed Information World. “That’s a really small variety of huge legislation corporations within the U.S. or the UK. We’re attempting to resolve the issue within the shopper authorized house, which is a completely totally different and separate market. It’s served, in the meanwhile, by — within the UK — 10,000 small legislation corporations.”

Proner mentioned smaller corporations should handle larger prices amid a shrinking market. “They’ve obtained excessive prices of staffing, with paralegals, junior legal professionals and trainees. They solely have one-to-three precise senior legal professionals who’re incomes any cash. So the mannequin doesn’t work. There’s this large exodus of mid-career legal professionals from the main-street/high-street mannequin, and plenty of them are going freelance or self-employed. That’s the place we’ve form of seen plenty of traction.”

Though the UK’s shopper authorized market is price an estimated £25 billion, like most authorized markets, it’s groaning beneath the burden of its personal prices. This implies round 3.6 million folks have an unmet authorized want involving a dispute annually, and around a million small companies deal with authorized points on their very own. So there’s a robust alternative for automation to assist the sector dial up productiveness.

Proner added, “We do mix [our model] with foundational fashions from OpenAI and Anthropic, in addition to open supply fashions. However it’s our personal mannequin, which has been skilled on the information that we’ve been capable of collect from 1000’s of instances.”

The startup plans to make use of the seed spherical to enter different markets, per Proner. “We now have our eyes on different markets but to be publicly disclosed,” he mentioned.

Lawhiev’s lead investor for this spherical could present some clues about which markets the corporate could also be contemplating: The seed spherical was led by GV, the enterprise capital funding arm of U.S.-based Alphabet. Additionally collaborating is London-based Episode 1 Ventures, which beforehand invested £1.5 million within the firm in April 2022.

In an announcement, Vidu Shanmugarajah, a accomplice at GV, mentioned, “As a lawyer by coaching, I’ve skilled first-hand how wanted technology-driven innovation is within the authorized sector. Lawhive represents a transformative shift for each legal professionals and customers.”