Another day, another investment in a legal startup. Yesterday, I reported that cloud-based litigation management platform Allegory had raised over $500,000. Today brings news that LawGeex, a contract review platform based on artificial intelligence, closed a $7 million Series A funding round.
The round was led by a group of investors that includes Japanese-based HR and information services company Recruit Holdings, the owner of job-listing site Indeed.com. Previous investors Lool Ventures and LionBird also participated in this round, bringing LawGeex’s total funding to $9.5 million.
LawGeex was founded in 2014 by Noory Bechor, a former business lawyer at the largest law firm in Israel, and Ilan Admon, an expert in AI.
The LawGeex platform is designed to help businesses with their day-to-day individual contracts, as opposed to AI contract platforms such as eBrevia or Kira Systems that focus on due diligence review of large numbers of contracts .
It focuses on the negotiation stage, with the aim of freeing businesses and their legal teams to focus on more complex contracts.
The platform reviews incoming contracts, approving them if they match pre-defined criteria, or escalating them to the legal team if needed. Legal teams can define their criteria based on best practices, or create their own custom “playbooks,” outlining exactly what the platform should accept or reject in any contract.
The goal, Bechor told me during a recent conversation, is to reduce some of the inefficiency in the contract-negotiation process by automating it. “Contracts are very structured,” Bechor said. “If we can train the computer to understand the legal language, we can eliminate a lot of what lawyers do.”
Based on his experience in practice, Bechor believes the negotiation process is a black hole where a lot of transactions get stuck or break down. “We decided to focus our development here. We take the customer from the point where they receive the contract to the point where they can sign the contract confidently.”
LawGeex comes preloaded with playbooks for common types of business contracts, such as non-disclosure agreements, services agreements, software licenses or purchase agreements. Customers can then customize the playbooks to match their preferences.
Based on these playbooks, LawGeex then analyzes each incoming contract for inconsistencies, identifying uncommon clauses or missing clauses, for example. If a clause is missing, the user can simply drag and drop its standard clause into the agreement.
LawGeex is best suited for midsized companies that have a sufficient volume of contracts to use the platform at least weekly and that have a small to midsized inhouse legal team.
Pricing depends on a number of factors, but would typically be around $1,000 a month, Bechor told me.
“The way we think about the negotiation phase is basically this: What do you want the lawyer to do? You want the lawyer to flag things that shouldn’t be there, you want the lawyer to flag things that should be there, and you want the lawyer to explain things to you that you don’t understand,” Bechor said.
That, he said, is what LawGeex attempts to do.