Noory Bechor, CEO, and co-founder of LawGeex
Earlier this week, we announced the closing of a new $12 million funding round led by venture capital fund, Aleph, and including previous investors, such as Lool Ventures. This will allow us to deliver better and smarter products, expand our market reach and continue leading the legal AI category.
This is the latest in a number of major developments disrupting the $700 billion legal services market. Here are five takeaways I have taken from this journey, the process of raising funding, and what this means for the future of legal technology.
1) This time getting investment was fairly easy
This may sound like bragging, but it is not meant to be. It is a testament to how fast change is happening in the legal industry. I left the financial safety of being a lawyer at a big firm to found LawGeeex, convinced that the horribly inefficient practices of law must be automated. However, myself and CTO and co-founder, Ilan Admon met with quizzical looks from investors. Law was a difficult sell.
Fast-forward to today. In reporting the LawGeex funding this week, Crunchbase News pointed out that this “funding round comes as the legal tech world boosted fundraising last quarter. Crunchbase News found that legal tech startups had raised just $1.25 million in Q1 2017, compared to over $49 million in just the first month of 2018. The round is also indicative of the increased focus on AI-powered tools across industries which are redefining work at a basic level.”
To make the point even stronger, Aleph closed our funding round in 18 days from term-sheet to closing.
This is a clear message to all investors who are not sure if they should invest in the rising tide of legal technology that change has come.
2) Lawyers are adopting tech (big time)
Since our last funding round, we have seen incredible market adoption. Legal AI has gone from a buzzword to a bulwark, of legal departments. In a recent conference we held in New York, lawyers at companies from Microsoft, to eBay and Bain Consulting talked about what they are doing in this area as part of daily processes. Lawyers are no longer saying they are interested in AI; they are saying they have a pain and our technology can fix it.
Every single day our teams talk to top legal departments, reflecting this reality. In the past week alone, snippets from conversations with top law departments looking to automate included: “We have a major need to improve turnaround time & contracting process; “no one here wants to do contract reviews”; “We are looking at every process improvements for the legal function”.
This week LawGeex is attending a major conference in Las Vegas, simply unthinkable only three years ago. More than 1000 legal operations leaders (a role itself less than three years old) are descending on the Corporate Legal Operations Consortium (CLOC) conference attended by the legal leaders at the world’s biggest companies (including Facebook, NetApp, Google). This, and a similar initiative from the Association of Corporate Counsel, is bringing business, technology, and better processes to law departments. The modern legal department is standing shoulder to shoulder with every other part of their business for world-class efficiency, cost savings, and processes. They are putting technology opportunities and savings at the center of responsible legal service delivery.
3) Legal entrepreneurs: pursue your dream
Our entrepreneurial journey in building a world-class legal technology company will, I hope, inspire others. The opportunities are immense. This year a “Global Legal Hackathon” was held across 22 countries. The winning prototypes included voice-driven contracts (Canada); a one-stop AI image copyright protection (China); and a program that allows those convicted of marijuana misdemeanors to file an expungement automatically (Los Angeles). With centuries of no change in the law, the doors of innovation are wide open. Personally, I am inspired every day by entrepreneurs reaching out and telling me that they use LawGeex as an example of a legal technology success story.
4) Pursuing value-based investment
The LawGeex values — efficiency, innovation, love, teamwork, and professionalism — drive every business and product decision we make. It was a major factor that the investor we chose, shared these values. To take only one example, professionalism is highly valued by both LawGeex and Aleph. Despite the hype about AI, we are very honest with customers about what we can and, just as importantly, cannot do (what we do, we do very well). This integrity helps engender trust and builds a sustainable business for the long term. Professionalism and trust similarly came through in testimonials from Aleph portfolio companies who I’ve spoken with during my own diligence. Having an investor partner that has the same values means we can have confidence and clarity in this next exciting chapter of our journey.
5) Keep focused on the bigger picture
Funding is only one part of building a successful business. The capital will be vital to enact a bigger picture of deepening the LawGeex product offering, including the breadth of contracts we support and expand our US presence after the recent opening of our New York office. We also want to respond proactively to customers and potential users of LawGeex to provide a seamless and beautiful user experience that our customers love (another one of our values). With market growth, there’s a genuine opportunity with the bigger picture in mind, of reshaping the legal profession.
With this bigger picture in mind, a funding announcement nevertheless provides a good opportunity to send a message to all our employees, partners and customers. The revolution is well on its way and all of our hard work and dedication is continuing to pay off.