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Lawhive, a British startup that wants to use AI to transform the business model of law firms that perform routine legal work for individuals and small businesses, has raised $60 million in new venture capital funding to accelerate its expansion in the U.S.
The Series B funding round was led by Mitch Rales, cofounder of Danaher Corporation, the $170 billion science and technology conglomerate. Other investors included TQ Ventures, GV (formerly Google Ventures), Balderton Capital, and Jigsaw. The funding comes less than a year after Lawhive raised a $40 million Series A round.
Lawhive is not a pure software company. Instead, it is a legal services firm that employs a network of human lawyers who are assisted by a technology platform Lawhive has built. The company says this enables it to provide legal services more efficiently and at lower cost than a traditional general practice law firm. The company is among a wave of startups employing this new business model. Others include Robin AI, General Legal, Third Chair, and LegalOS. The model is distinct from other AI law startups such as Harvey, which just sell AI systems for lawyers to use.
Founded in 2020, Lawhive has built what it calls an AI operating system for consumer law. The company handles routine legal matters including family law, landlord and tenant disputes, property transactions, and consumer rights cases. Its technology automates tasks such as document drafting, legal research, case management, and client intake. It says that about 500 lawyers now work through its platform across three regulated law firms—two in the U.K. and one in Arizona.
Democratizing access to legal help
“We’re the overnight success that took five years to build,” said Pierre Proner, Lawhive’s chief executive. The company’s annual revenue now exceeds $35 million and has grown seven-fold in the past year, according to Proner.
Lawhive is targeting what it says is a large and underserved segment of the legal market—the kind of general legal services that individuals and small businesses need. The company estimates that the consumer legal market in the U.S. generates about $200 billion in revenue annually, but that there is an even larger potential market.
“There’s a $200 billion existing market, but there’s a trillion dollars of unmet need, of people who have serious legal problems every year who can’t afford an attorney,” Proner said.
Rales, who built Danaher into one of the world’s most successful industrial companies over four decades, said in a statement that he was drawn to Lawhive’s mission of making legal services more accessible. “Lawhive is democratizing legal services,” he said.
A can’t beat ’em, join ’em pivot
Lawhive started out trying to sell automation software to traditional retail law firms, but Proner said many small firms were reluctant to buy. He said lawyers at these firms were skeptical about adopting the technology, partly out of concern that spending less time on cases would make it harder to justify their fees to clients, even though many of these firms already charged fixed fees rather than using a model based on billable hours.
So Lawhive pivoted and decided to become a law firm itself, Proner said. He said this allowed Lawhive to “reimagine” the design of the law firm from the ground up, with AI at the heart of how the firm operates both in terms of producing legal work but also doing back office tasks such as invoicing and client onboarding. He says that in many small law firms these tasks account for up to 70% of the firm’s costs. He contrasted Lawhive’s approach with other legal AI companies that “are effectively designing software around how lawyers in law firms work. We’re doing the opposite.”
Proner said lawyers working through Lawhive earn as much as 2.8 times what they would make at a traditional practice, because they can handle a far greater volume of cases. Consumer lawyers often juggle 80 to 200 clients at a time, and the AI tools allow them to move through that caseload more efficiently.
For routine legal work, such as filing an uncontested divorce application, Proner said Lawhive’s technology allows for “almost full autonomy,” with human lawyers simply reviewing the filings for quality control.
While there have been several high profile cases of lawyers been castigated by judges and issued hefty fines for submitting filings containing erroneous case citations due to errors made by AI software, he said that Lawhive has tried to design its AI software to minimize the chances of such mistakes. When the system is uncertain about something, it flags the issue for human review, Proner said. And for more complex disputes that require more judgment calls, the AI plays a more supportive role, he said.
After starting in the U.K., Lawhive launched in the U.S. last year and now operates in 35 states, with plans to expand nationwide. The company has offices in Austin, Texas, and is opening a new headquarters in New York.
The company plans to use the new funding primarily for U.S. expansion, Proner said. He said the company’s ambition is to grow another five- to sevenfold this year.
This story was originally featured on Fortune.com
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Jeremy Kahn
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