LegalOn Secures $50 Million to Enhance AI Solutions for Streamlining Legal Processes

Contract review continues to require substantial time and effort from lawyers. They must manually navigate complex language, identify risks, and interpret legal terminology. LegalOn Technologies has created a solution for this challenge.

Their AI-powered software assists legal departments in Japan, the United States, and the United Kingdom. According to the company, around 7,000 organizations are currently utilizing their product. In the Japanese market, LegalOn Technologies holds a leading position, with 25% of the country’s publicly traded companies already using their platform.

LegalOn’s AI contract review tool, Review, identifies risks and suggests corrections based on templates developed by lawyers and the legal standards of each client. The company claims that Review reduces review time by 85%, while simultaneously enhancing quality and accuracy.

Now, the company aims to improve its AI tools, complementing its existing software, and has recently secured $50 million in funding for this purpose.

The Series E funding round will be led by Goldman Sachs’ private equity fund, with participation from existing investor World Innovation Lab (WiL). Other contributors include the Japanese law firm Mori Hamada & Matsumoto, Mizuho Bank, and Shoko Chukin Bank.

While a significant portion of the funds will be allocated to new AI product development, the company is also ramping up its efforts to enter the U.S. and U.K. markets, where it claims its business has quadrupled in the past year.

LegalOn has opted not to disclose information about its valuation.

Daniel Lewis, the CEO of LegalOn, stated that the company stands out among many AI-driven legal tech startups due to its foundation of expert legal content created by lawyers. He emphasized that this differentiates LegalOn from other tools that depend on users creating rules from scratch or using generic AI models that lack the precision required for legal work.

“Our approach ensures that contract review adheres to real legal standards, making the outcomes more accurate, consistent, and practical for legal departments. Additionally, we offer over 50 ready-made templates designed by lawyers that easily integrate into existing workflows, and our solution is operational from day one,” Lewis explained.

Just last week, the startup launched another tool: Matter Management, which aids legal departments in tracking contract requests, assigning responsibilities, linking issues with appropriate personnel and documents, and collaborating with other departments.

The company has also entered into a technology partnership agreement without equity participation with OpenAI, granting LegalOn access to the developer’s advanced large language models.

“This technical collaboration,” Lewis elaborated, “provides us with early access to their latest models and enables our engineers to work closely with OpenAI’s engineers. This brings us closer to our goal of creating advanced AI agents using cutting-edge technology while relying on our own legal content and expertise.”

The AI revolution has proven to be a robust asset for legal tech startups globally. In June, Harvey AI secured $300 million in Series E funding, bringing its valuation to $5 billion. Last year, Clio also raised $300 million, reaching a valuation of $3 billion.

However, even as generative AI transforms the legal sector, Lewis does not believe it will replace lawyers. “Technology hasn’t reached that level yet, and we aren’t even considering replacing lawyers,” he stated. “Lawyers remain in control. What AI cannot do perfectly today can only be done by humans. Lawyers who take on the responsibility of overseeing, editing, and making judgments are the ones currently benefiting the most from AI.”

With the Series E round, LegalOn’s total capital has surpassed $200 million. Among its investors are SoftBank Vision Fund, HSG (formerly Sequoia Capital China), the Japanese venture firm JAFCO, and MUFG Bank.

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