A contract review is a slow, manual process that puts a burden on the legal team, sifting through the tightly packed language with lawyers, flagging them, and translates legal terms.
In fact, this issue is so common that for the past few years, Tokyo-based Legalon Technologies has had an open door to that market. Currently, AI contract review software for legal teams is used by 7,000 organizations in Japan, the US and the UK, and the company uses its platform to lead the Japanese market.
Identifies Legalon’s AI contract review tools, reviews, risks and proposes editing based on lawyer-built playbooks and legal standards for each client. The company claims that reviews improve quality and accuracy while reducing review time by up to 85%.
But success has not eased Regan’s ambitions. The company is currently hoping to build more AI agent tools to suit the software, and has recently raised $50 million and done just that.
The Series C funding round was led by Goldman Sachs’ Growth Equity Fund and saw participation from existing investors World Innovation Lab (WIL). New investors Morita and Matsumoto (Japanese law firm), Mizuho Bank and Shokochukin Bank have also invested.
Many new cash is dedicated to developing more AI agent products, but the company is stepping up its market commitment in the US and UK.
Legalon refused to disclose the assessment.
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Founded in 2017 by two former corporate lawyers Nozomu tsunoda and Masataka ogasawara, Legalon aims to address time-consuming tasks before and after the contract review process, such as organizing legal requirements and automating contract management.
According to Legalon’s global CEO Daniel Lewis, the company stands out from a horde of Legal Tech startups using AI thanks to its foundation of professional legal content in Lawyer Draft. He says the foundation, unlike other tools that rely on users to build rules from scratch, uses a common AI model that lacks the accuracy required for legal work.
“Our approach will ensure that contract reviews are consistent with actual legal standards, making the output more accurate, consistent and practical for the legal team. Additionally, playbooks built by over 50 lawyers are seamlessly integrated into existing workflows, and the solution works on the first day,” Lewis said.
Last week, the startup launched another tool. Issue Management helps legal teams track contract requests, assign owners, connect with relevant people and documents, and work with other departments.
The company also attacked a non-equity technology partnership with OpenAI. This gives you Legalon access to ChatGpt makers’ advanced, large-scale language models.
“It’s a technical collaboration,” explained Lewis. “It gives us early access to their latest models, and it positions our engineers to work side by side with Openai engineers. In that respect, it advances our goal of building a cutting edge edge. [AI] We are agents using great technology, but we can take it into account with our unique legal content and expertise. ”
The AI revolution has proven to be a massive tailwind for legal tech startups around the world. In June, Harvey AI secured $300 million in Series E funding, pushing its valuation to $5 billion, and last year Clio also raised $300 million, reaching a valuation of $3 billion.
But even if generative AI transforms the legal industry, Lewis doesn’t think it will replace lawyers. “The state of technology does not exist yet, and the change in lawyers is not our vision,” he said. “The lawyers are still in the driver’s seat. What AI today can’t do perfectly is by definition something only people can do. And lawyers who lean towards that responsibility – editing, editing, and using judgment is what we see today’s most extraordinary leverage from AI.”
Series C will increase Regalon’s total capital to more than $200 million. The investors include SoftBank Vision Fund, HSG (formerly known as Sequoia Capital China), Japanese venture capital firm Jafco and MUFG Bank.
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