UK based legaltech company Lawhivewhich offers an AI-powered in-house “lawyer” through a software-as-a-service platform aimed at small law firms, has raised £9.5 million ($11.9 million) in a seed round to expand the reach of its AI services for “main street” law firms.
To date, most legaltech startups developing AI have focused on the big, juicy market of “Big Law” — meaning large, whether nationwide or global, law firms that are heavily pushing AI into their workflows their. These include Harvey (US-based, raised $106 million); Robin AI (UK-based, raised $43.4 million) Spellbook (Canada-based, raised $32.4 million). However, startups have little regard for the thousands of “main street” lawyers, who have much smaller budgets and are harder to monetize.
Lawhive targets its platform at small law firms or individual lawyers who have their own shop. Attorneys can use its software to onboard and manage their own clients or be matched with consumers and small businesses through a purchase option.
The startup applies a variety of key AI models and it’s own in-house model to summarize documents and speed up the legal process for both lawyer and client on repetitive administrative tasks such as KYC/AML, client onboarding and collection documents. 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) — scoring 81% against a pass score of 55 %.
Speaking to TechCrunch Pierre Proner, CEO and co-founder of Lawhive, said: “Almost all existing legal technologies – AI companies like Harvey or Robin AI or Spellbook – are all chasing the corporate market. This is a very small number of large US law firms in the UK. We are trying to solve the problem in the consumer legal space, which is completely different and a separate market, both in the UK and globally. It is currently served by — in the UK — 10,000 small law firms.”
He said small businesses faced higher costs and a shrinking market: “They have all these high costs of staff and legal and junior lawyers, interns, et cetera, et cetera. And they only have one to three real senior lawyers who make any money. So the model doesn’t work. There’s this huge exodus of like mid-career lawyers from the main-street/high street model, and a lot of them are becoming self-employed freelancers, and at that point we’ve seen a lot of traction through the self-employed platform that salaried lawyers are using our AI lawyer.”
Although the UK consumer legal market deserves an assessment £25 billion, like most legitimate markets, is groaning under the weight of its own costs. This means that approximately 3.6 million people have an unmet legal need involving a dispute each year and about a million small businesses handle legal issues on their own. Therefore, there is a strong opportunity for automation to help the industry increase productivity.
Proner added: “We’re combining with core models from OpenAI and Anthropic, as well as open source models. But it’s our own model, which has been trained on the data we’ve been able to gather from 1,000 cases.”
The startup plans to use the seed round to enter other markets, according to Proner: “We have our eyes on other markets that haven’t been publicly disclosed yet.”
It may be possible to infer where the planned market expansion will be focused by looking at Lawhive’s lead investor: The seed round was led by GV, the venture capital investment arm of Alphabet, Google’s US-based parent company. London’s Episode 1 Ventures is also involved, following a £1.5m investment in April 2022.
In a statement, Vidu Shanmugarajah, partner at GV, said: “As a trainee lawyer, I have experienced first-hand how essential technology-driven innovation is in the legal sector. Lawhive represents a transformative change for lawyers and consumers alike.”
