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Lawhive raises $12M to expand legal tech AI platform for small firms

Lawhive, a UK-based legal tech company that offers in-house AI-powered “lawyers” through a software-as-a-service platform aimed at smaller law firms, has raised £9.5 million ($11.9 million) in a seed round to expand its business Scale provides AI-driven services to “main street” law firms.

To date, most legal tech startups deploying AI have focused on the large and juicy market of “big law” — meaning large law firms, both national and global, are keen to on pushing artificial intelligence into its workflow. These include Harvey (U.S.-based; raised $106 million); Robin AI (U.K.-based; $43.4 million raised); Spellbook (Canada-based; raised $32.4 million). But startups pay little attention to the thousands of “main street” lawyers who have much smaller budgets and are harder to monetize.

Lawhive’s platform targets small law firms or independent attorneys running their own law firms. Lawyers can use its software to recruit and manage their own clients, or match them with consumers and small businesses through the marketplace feature.

The startup applies various underlying AI models as well as its own in-house models to aggregate documents and speed up the legal process for attorneys and clients on repetitive administrative tasks such as KYC/AML, client onboarding and document collection. Lawhive says its in-house AI lawyer, “Lawrence,” is built on its own large language model (LLM), which it claims has passed the Solicitors Qualifying Examination (SQE) – scoring 81% and a passing score of 55%.

“Almost all of the existing legal tech companies — artificial intelligence companies like Harvey, Robin AI, or Spellbook — are targeting the enterprise market,” Lawhive CEO and co-founder Pierre Proner said in a phone interview with TechCrunch. “It’s just the enterprise market. A very small number of large law firms in the US and UK. We are working to address the area of ​​consumer law, which is a completely different, separate market in the UK and globally, and is currently served by 10,000 small law firms in the UK. ”

Small law firms, he says, face higher costs and a shrinking market: “They face high costs in terms of staffing, paralegals, junior lawyers, interns, etc. And they only have one or three real of senior lawyers are making any money, so this model is not working and there is a huge exodus of mid-career lawyers from the high street/high street model, which is what we are seeing a lot of with our self-help platforms. Big attraction for hiring lawyers using our AI lawyers.”

Although, like most legal markets, the UK consumer legal market is worth an estimated £25 billion, it is struggling under the weight of its own costs. This means that each year approximately 3.6 million people have unmet legal needs and are involved in disputes, and approximately 1 million small businesses take matters into their own hands. Therefore, there is a huge opportunity for automation to help the industry become more productive.

Proner added: “We do combine base models from OpenAI and Anthropic, as well as open source models. But this is our own model that has been trained on data we have collected from thousands of cases.”

Proner said the startup plans to use the seed round to enter other markets: “We’re looking at other markets that we haven’t publicly disclosed yet.”

By looking at Lawhive’s major investors, it might be possible to deduce where the planned market expansion will focus: The seed round was led by GV, the venture capital arm of Google’s US parent company Alphabet. London-based Episode 1 Ventures is also involved, having invested £1.5 million in April 2022.

Vidu Shanmugarajah, partner at GV, said in a statement: “As a lawyer by training, I know firsthand how much the legal field needs technology-driven innovation. Lawhive represents a transformative shift for lawyers and consumers alike.”

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