UK-based legaltech company Lawhive, which offers AI-powered in-house “lawyer” through a software-as-a-service platform for small law firms, has raised £9.5 million (11.9 million) in a seed round US dollars) for its expansion to extend the reach of AI-driven services for law firms on the “main street”.
To date, most legaltech startups using AI have focused on the large, juicy market of “big law” – that is, large, national or global law firms that are heavily integrating AI into their workflows. These include Harvey (US-based; raised $106 million); Robin AI (UK-based; raised $43.4 million); Spellbook (based in Canada; raised $32.4 million). However, startups pay little attention to the thousands of lawyers on the “high street,” who have far smaller budgets and are harder to monetize.
Lawhive’s platform is aimed at small law firms or individual lawyers who run their own law firm. Lawyers can use their software to onboard and manage their own clients or be matched with consumers and small businesses through a marketplace feature.
The startup applies a variety of basic AI models and its own internal model to summarize documents and accelerate the legal process for lawyer and client 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) – with 81% with a minimum score of 55%. .
Speaking to TechCrunch, Pierre Proner, CEO and co-founder of Lawhive, said: “Pretty much all existing legaltech companies – AI companies like Harvey or Robin AI or Spellbook – are all targeting the enterprise market.” That’s a very small number of large law firms in the USA in the UK. We are trying to solve the problem in the area of consumer law, which is completely different and a separate market, both in the UK and globally. It is currently served by 10,000 small law firms across the UK.”
He said small firms face higher costs and a shrinking market: “They have all these high costs of staff, paralegals, junior lawyers, interns, etc. etc. And they only have one to three actual senior lawyers who make any money. So the model doesn’t work. There is a huge migration of mid-career lawyers from the main street/high street model and many of them are moving into freelance work and this is where we have, through our platform of Independence, so to speak, was very well received. Hired lawyers who use our AI lawyer.”
Although the UK consumer rights market, like most legal markets, is worth an estimated £25 billion, it is groaning under the weight of its own costs. This means that every year around 3.6 million people have an unmet legal need in connection with a dispute and around a million small businesses manage their own legal matters. So, there is a huge opportunity for automation to help the industry increase its productivity.
Proner added: “We combine with foundational models from OpenAI and Anthropic as well as open source models. But it is our own model, trained on the data we were able to collect from thousands of cases.”
According to Proner, the startup plans to use the seed round to enter other markets: “We are eyeing other markets that are not yet being publicly announced.”
Based on Lawhive’s lead investor, it may be possible to infer where the planned market expansion will focus: The seed round was led by GV, the venture capital investment arm of Alphabet, the US parent company of Google. London’s Episode 1 Ventures is also taking part following a £1.5 million investment in April 2022.
In a statement, Vidu Shanmugarajah, partner at GV, said: “As a trained lawyer, I have experienced first-hand the need for technology-driven innovation in the legal sector. “Lawhive represents a game-changer for both lawyers and consumers.”