Lawhive, a legal tech startup based in the U.K., has successfully raised £9.5 million ($11.9 million) in a seed round. Lawhive will use the funding to expand the availability of their AI-driven services for small law firms, offering them an in-house “lawyer” through a software-as-a-service platform.
So far, the focus of many legal tech startups that have implemented AI has been on the lucrative market of “Big”Law”—those large law firms with a national or global presence that are eager to integrate AI into their workflows. These startups include Harvey (U.S.-based; raised $106 million), Robin AI (U.K.-based; raised $43.4 million), and Spellbook (Canada-based; raised $32.4 million). However, startups have largely overlooked the numerous “main street” law firms, which operate on smaller budgets and present more challenges when it comes to monetization.
Lawhive focuses on catering to the needs of small law firms or solo lawyers managing their own practices. Lawyers have the option to utilize its software for client onboarding and management, or they can join Lawhive’s marketplace to connect with individual customers and small businesses.
This startup utilizes a range of AI models, including their own proprietary model, to efficiently summarize documents and streamline repetitive tasks like KYC/AML, client onboarding, and document collection for lawyers and their clients. The company asserts that they have developed its in-house AI lawyer, “Lawrence,” using their own extensive language model (LLM). Lawrence has achieved an impressive 81% on the Solicitors Qualifying Examination (SQE), surpassing the passing grade of 55%, according to the company.
According to Pierre Proner, CEO and co-founder of Lawhive, most of the current legal tech companies, such as Harvey, Robin AI, or Spellbook, primarily target the corporate market. There are only a few major law firms in the United States or the United Kingdom. Our focus is on addressing the issue in the consumer legal space, a distinct and independent market. Currently, 10,000 small law firms in the U.K. support it.
Proner noted that smaller firms are facing the challenge of managing increased costs in a market that is gradually contracting. They have significant staffing expenses, including paralegals, junior lawyers, and trainees. They have a limited number of senior lawyers who generate revenue. It seems that the model is not functioning properly. Many mid-career lawyers are leaving the traditional main-street/high-street model and opting for freelance or self-employment. That’s where we’ve noticed significant progress.
Like other legal markets, the U.K.’s consumer legal market bears its own expenses despite its immense value. Each year, approximately 3.6 million individuals encounter unresolved legal matters related to disputes, while roughly one million small businesses navigate legal challenges independently. There is a significant potential for automation to greatly enhance productivity in this sector.
Proner mentioned that they incorporate our model with foundational OpenAI and Anthropic models, as well as open source models. However, our model is based on extensive data gathered from thousands of cases.
The startup intends to utilize the seed round to expand into additional markets, according to Proner. “We are currently exploring additional markets that we have not yet publicly announced,” he said.
Lawhive’s lead investor choice for this round could offer insights into the potential markets the company is exploring. The seeGV, the investment arm of Alphabet, a prominent U.S.-based company, led the seed round. 1 Ventures, a London-based investor, also took part in the investment.
In a statement, Vidu Shanmugarajah, a partner at GV, emphasized the crucial role of technology-driven innovation in the legal sector, drawing from personal experience as a lawyer. Lawhive represents a game-changing shift for both lawyers and consumers.
In the past, Lawhive secured £1.3 million in funding from Episode 1 during the pre-seed stage.
