Legal One has just raised $50 million to basically help lawyers streamline contract reviews.
It's had some absolutely insane success.
You would not believe who is currently using it and who has put money into funding it.
And all in all, I think this is basically going to be what we're going to see as a broad market change for AI and legal in the future.
So let's get into all of that on the podcast today.
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Let's get into what legal one is doing.
So I'd say one of the big things is SoftBank is one of the big backers of legal one.
They've just landed this $50 million.
And basically, what they're trying to do right now is solve this problem where contract review.
So one of our lawyers writing up a contract, they send it over to a company or a company or a person is receiving a contract, they get the lawyers to review, make sure everything looks good.
I've talked to many people in business that say they've had their lawyers review a contract or agreement from an organization or from an entity.
And there's been some like, basically, the whole thing was good.
But there's been some sneaky things slipped in there.
I talked to one lawyer in particular, I remember when I was in college, my business law professor, he talked about one company in particular that he worked for and he saved them like, I think it was something like $20 million that basically there was a clause and a little thing that was kind of snuck in there and he had them change it and in the future it was relevant and saved them like $10 million from a very small thing.
So I think this is definitely a big area that people want, that people put a a lot of value on and a lot of attention to, but it takes so long.
These documents can be astronomically insanely long, especially when you're talking about business law and a lot of other areas.
So what is the solution?
I think just like people have turned to AI to parse through political like bills in the Senate or, you know, here in the United States, I think this is also a fantastic place to turn to lawyers and contract law.
And so obviously I'm not the only one that that thinks this Legal One has been used by 7 ,000 organizations across Japan, US and UK.
It's leading the Japanese market.
So about 25 % of all public country companies in Japan are using Legal One to review all of their documents.
And they have basically their main tools called Review.
It looks at, it's not going to do everything for you.
It's not replacing lawyers, I would say.
But what it does do is it identifies risks.
And it also suggests edits, it's based on playbooks built by lawyers and each customer's legal standards.
So the company says that their tool, which is called Review, basically cuts down review time by 85%.
And they say that also improves quality and accuracy.
So this is, I mean, obviously quality and accuracy, I think everyone can argue about whatever, but the 85 % time save, I do not doubt.
And I think that's 100%, right?
And if you know lawyers, time is money.
As someone who has, you know, used lawyers for many different purposes in my in my companies from company setup to you know when you run into a trademark dispute it costs a lot of money and they bill by the hour so if you can cut down costs by 85 % or time by 85 % that cuts down costs it's fantastic so one thing I'll say is currently legal one is looking to build out a whole bunch of AI agent tools that are going to basically work with all of their software.
So they just raised $50 million to do that.
I think they're also going to spend some of that $50 million on their good market strategy.
So marketing, apparently in the United States, they're really exploding.
This is a Series C funding round, and it was led by Goldman Sachs.
It's their growth equity fund.
They also had some of their existing investors like World Innovation Lab.
They had Mori Hamurada and and Matsumoto, which is a law firm in Japan.
They had Muzo Bank and Shoko Chunk Bank, who also invested.
So I think they're very big in Japan, and so they had a lot of players from there.
But of course, we're seeing Goldman Sachs and lots of other players that jumped in.
They didn't actually want to disclose what their valuation was, which I'm always interested to see.
But they did say that in the United States and the UK, their business has quadrupled over the past year.
So it's growing fast. I think it was kind of like really big in Japan, and now it's expanding to a lot of other markets.
This was basically started by two former corporate lawyers in 2017, and they've seen a ton of success.
According to Daniel Lewis, who is global CEO of LegalOne, the company is basically trying to stand out from all of the other legal tech startups by basically using its attorney -drafted expert legal content strategy.
So he says basically that base makes LegalOne unlike any other tool that you can use to rely on users to build rules from scratch. So anyways, this is what he said specifically about it.
He said, our approach ensures contract reviews are aligned with real legal standards, making the the output more accurate, consistent, and practical for legal teams. In addition, we have more than 50 attorney -built playbooks, seamless integration into existing workflows, and our solutions work out of the box on day one.
So I mean, basically, I think what they're saying is it's very complicated to do a lot of this stuff.
You can't just ask ChatGPT, review this contract, and flag it for any errors.
I think basically, if you have a lawyer that is an expert in a particular type contract law and also in a particular country, right?
Because laws vary by country, who could say, hey, review this contract, which is an XYZ type contract and flag it for all of these different things.
So they have lawyers building these templates basically of the types of things that you need to flag and review a contract for the clauses that are common get gotchas inside of that.
So it basically helps to have the expertise of a lawyer to build out these templates and make the AI the most useful it can possibly be.
Just last week, they launched another tool that was called matter management and it basically helps legal teams look at um and kind of track the contrast requests they can assign owners they can connect matters to relevant people and documents and they can collaborate with other departments so they're building out a lot of cool stuff they also have something interesting that i don't see a lot they have basically it's kind of it's a non -equity tech partnership with open ai i'm assuming open ai is just like hey look here's one of our big users let's kind of work with them um and so it pretty pretty
much gives LegalOne access to ChatGPT's most advanced models.
And whenever they have something new that comes out before they give it to everyone else, LegalOne can test it out, basically.
So this is kind of cool.
This is, of course, where tons of other legal companies are raising or have raised a lot of money.
So there's definitely competition in this market.
In June, Harvey AI raised about $300 million in a series e -funding.
They have now a $5 billion valuation.
valuation last year.
Clio raised $300 million, reaching a $3 billion valuation.
So even with all this competition, I think that they're doing fantastic.
This is their Series C round, and it basically brings their total raised capital to over $200 million.
So they're doing very well.
They've raised a ton of money.
They've had SoftBank as an investor.
They had HSG, which is formerly Sequoia Capital China.
And then they had some Japanese venture capital firms, Jafco and and MUFG Bank.
So I think this company is going to do a lot of things.
It's getting a lot of adoption, a lot of users.
I'm excited to follow along.
And I'm really excited for what AI is doing in the legal field.
I think this is something that we're going to just see continue to grow and grow into the future.
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