EXCLUSIVE: Lawhive, a startup using AI to reimagine the general law firm, raises $60M in new venture capital funding

legala British startup that wants to use artificial intelligence 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 US expansion.
Mitch Ralls, co-founder of .Series B, led the Series B funding round Danaher Inc., a $170 billion science and technology conglomerate. Other investors include TQ Ventures, GV (formerly known as… Google Projects), Balderton Capital, and Jigsaw. The funding comes less than a year after Lawhive raised $40 million in its first round.
Lawhive is not a pure software company. Instead, it is a legal services company that employs a network of human lawyers assisted by a technology platform created by Lawhive. The company says this enables it to provide legal services more efficiently and at a lower cost than a traditional general law firm. The company is among a wave of startups using this new business model. Include others Robin ICommon Law, The Third President, and LegalOS. The model differs from other startups in the field of AI law such as Harveywhich only sells AI systems for use by lawyers.
Founded in 2020, Lawhive has built what it calls an AI operating system for consumer law. The firm handles routine legal matters including family law, landlord-tenant disputes, property transactions, and consumer rights issues. Its technology automates tasks such as document drafting, legal research, case management, and client reception. It says about 500 lawyers now work through its platform across three regulated law firms – two in the UK and one in Arizona.

Democratic access to legal aid

“We are the overnight success that took five years to build,” said Pierre Bruner, CEO of Lawhive. The company’s annual revenue now exceeds $35 million, and has increased sevenfold in the past year, according to Bruner.

Lawhive targets what it says is a large, 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 United States generates revenues of about $200 billion annually, but there is a larger potential market.
“There’s a current $200 billion market, but there’s a trillion dollar unmet need for people who get into serious legal trouble every year and can’t afford a lawyer,” Brunner said.

Riles, who built Danaher into one of the world’s most successful industrial companies over four decades, said in a statement that he was attracted to Lawhive’s mission of making legal services more accessible. “Lawhive is democratizing legal services,” he said.

Can’t beat them, join them in the axis

Lawhive started out trying to sell automation software to traditional retail law firms, but Bruner said many small firms were reluctant to buy. Lawyers at these firms were skeptical about adopting the technology, he said, in part because 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 flat fees rather than using a model based on billable hours.

Lawhive decided to become a law firm on its own, Brunner said. This allowed Lawhive to “reimagine” law firm design from the ground up, he said, putting AI at the heart of how the firm operates in terms of producing legal work as well as doing back-office tasks like billing and onboarding clients. In many small law firms, these tasks account for up to 70% of the firm’s costs, he says. He compared Lawhive’s approach to other legal AI companies that “effectively design software around how lawyers work in law firms. We do the opposite.”

Lawyers who work through Lawhive earn up to 2.8 times what they would in traditional practice, Brunner said, because they can handle a much higher caseload. Consumer attorneys often handle between 80 and 200 clients at a time, and AI tools allow them to move through that caseload more efficiently.

For routine legal work, such as filing an uncontested divorce filing, Brunner said Lawhive’s technology allows for “almost complete autonomy,” with human attorneys simply reviewing submissions for quality control.
Although there have been several high-profile cases in which lawyers have been criticized by judges and issued heavy fines for submitting documents containing false citations for cases due to errors made by AI software, he said Lawhive has tried to design its AI software to minimize the chances of such errors occurring. When the system is unsure about something, it flags the problem for human review, Brunner said. For more complex disputes that require more adjudication, AI plays a more supportive role, he said.
After starting out in the UK, Lawhive launched in the US last year and now operates in 35 states, with plans to expand across the country. The company has offices in Austin, Texas, and is opening a new headquarters in New York.
Brunner said the company plans to use the new funding primarily to expand into the United States. He said that the company’s ambition is to grow between five and seven times this year.

This story originally appeared on Fortune.com