UK-based legaltech startup Lawhive, which presents an AI-based, in-house “lawyer” by means of 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 companies for “main street” legislation corporations.
So far, most legaltech startups which have deployed AI have focused on the large, juicy market of “Big Law” — 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 “main street” legislation corporations, which have far smaller budgets and are tougher to monetize.
Lawhive targets small legislation corporations or solo attorneys operating their very own retailers. Attorneys can use its software program to onboard and handle their very own purchasers, or can join Lawhive’s market to be matched with particular person clients 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 attorneys and their purchasers. The corporate says its in-house AI lawyer, “Lawrence,” is constructed on prime of its personal giant language mannequin (LLM), which it claims has handed the Solicitors Qualifying Examination (SQE) with an 81% grade in opposition to a passing grade of 55%.
“Pretty much all of the existing legaltech — AI companies like Harvey, Robin AI, or Spellbook — all go after the corporate market,” Pierre Proner, CEO and co-founder of Lawhive, advised TechCrunch. “That’s a very small number of big law firms in the U.S. or the UK. We’re trying to solve the problem in the consumer legal space, which is a totally different and separate market. It’s served, at the moment, by — in the UK — 10,000 small law firms.”
Proner stated smaller corporations should handle larger prices amid a shrinking market. “They’ve got high costs of staffing, with paralegals, junior lawyers and trainees. They only have one-to-three actual senior lawyers who are earning any money. So the model doesn’t work. There’s this huge exodus of mid-career lawyers from the main-street/high-street model, and a lot of them are going freelance or self-employed. That’s where we’ve sort of seen a lot of traction.”
Though the UK’s client authorized market is price an estimated £25 billion, like most authorized markets, it’s groaning below the burden of its personal prices. This implies round 3.6 million folks have an unmet authorized want involving a dispute every year, and around a million small companies deal with authorized points on their very own. So there’s a powerful alternative for automation to assist the sector dial up productiveness.
Proner added, “We do combine [our model] with foundational models from OpenAI and Anthropic, as well as open source models. But it is our own model, which has been trained on the data that we’ve been able to gather from thousands of cases.”
The startup plans to make use of the seed spherical to enter different markets, per Proner. “We have our eyes on other markets yet to be publicly disclosed,” he stated.
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 taking part is London-based Episode 1 Ventures, which beforehand invested £1.5 million within the firm in April 2022.
In a press release, Vidu Shanmugarajah, a companion at GV, stated, “As a lawyer by training, I have experienced first-hand how needed technology-driven innovation is in the legal sector. Lawhive represents a transformative shift for both lawyers and consumers.”
