Lawhive raises $12 million to expand its legal technology AI platform for small businesses

UK based law firm Lohiff, which offers an AI-driven in-house “lawyer” through a software-as-a-service platform aimed at small law firms, has raised £9.5 million ($11.9 million) in a seed round to scale AI. Services for “Main Street” law firms.

To date, most legal tech startups using AI have focused on the large, exciting market of “Big Law” — that is, large law firms, both nationwide and global, that are aggressively pushing AI into their workflow. These include Harvey (US-based, which raised $106 million); Robin AI (UK-based, raised $43.4 million); Spellbook (Canada-based, raised $32.4 million). But there has been little interest from startups in the thousands of “main street” lawyers, who have much smaller budgets and are harder to monetize.

Lawhive targets its platform at small law firms or solo lawyers running their own boutique. Lawyers can use its software to onboard and manage their clients or match them with consumers and small businesses through marketplace advantage.

The startup applies a variety of foundational AI models, and its own internal model, to summarize documents and speed up the legal process for both lawyer and client via repetitive administrative tasks such as KYC/AML, client onboarding and document collection. Lawhive says its in-house AI lawyer, Lawrence, is built on its Large Language Model (LLM), which it claims passed the Solicitors Qualifying Examination (SQE) – scoring 81% against a pass mark of 55%. .

Speaking to TechCrunch over a phone call, Pierre Brunner, CEO and co-founder of Lawhive, said: “Almost all the existing legal tech companies – AI companies like Harvey or Robin AI or Spellbook – are all going after the enterprise market. And that’s a very small number of companies.” Big Law in the US and UK We’re trying to solve the problem in the consumer legal space, which is a very different and separate market, both in the UK and globally and currently served by – in the UK – 10,000 small law firms.

Smaller firms faced higher costs and a shrinking market, he said: “They’ve taken on all these higher costs for staff, paralegals, junior lawyers, trainees, etc. And they only have one to three actual senior lawyers earning a salary.” What money? So the model doesn’t work. “There is a mass exodus of mid-career lawyers from the high street/high street model, many of whom are going freelance, and this is where we have seen a lot of traction with our self-employed lawyers platform using our AI lawyers.”

Although the UK consumer legal market deserves appreciation 25 billion pounds sterling, like most legal markets, is groaning under the weight of its own costs. This means that approximately 3.6 million people have unmet legal needs involving dispute each year About a million Small businesses handle their legal issues on their own. Therefore, there is a strong opportunity for automation to help the sector increase productivity.

“We combine core models from OpenAI and Anthropic, as well as open source models,” Brunner added. “But this is our own model, trained on data we’ve been able to collect from thousands of cases.”

The startup plans to use the seed round to enter other markets, according to Bruner: “We have our eyes on other markets that have not been publicly disclosed yet.”

It may be possible to infer where the planned market expansion will focus by looking at Lawhive’s lead investor: The seed round was led by GV, the venture capital investment arm of Alphabet, Google’s US-based parent company. Episode 1 Ventures in London is also participating, following a £1.5m investment in April 2022.

In a statement, Vidu Shanmugarajah, partner at GV, said: “As a lawyer by training, I have witnessed first-hand the need for technology-driven innovation in the legal sector. Lawhive represents a transformative shift for both lawyers and consumers.