LexCheck, an NLP-powered contract negotiation tool, has raised an additional $5m of Seed funding, showing that investor appetite for early stage legal tech tools remains healthy.
LexCheck can trace its early roots back to 2015, i.e. seven years ago. However, it really got going in 2020 when it received $3m in funding. Its CEO and founder, Gurinder Sangha (pictured), was previously the founder of Intelligize, which was sold to LexisNexis in 2016, and is a legal information and content research application.
The new investment was led by Ulu Ventures and including participation from Kli Capital and Howard Morgan. The company is based in New York and has opened offices in London and also Melbourne, Australia.
All well and good. But, what does it do? As the images below show, the idea is that the system is trained against company playbooks and preferred language – as other startups in this space also do – and that it then ‘provides issues lists or revisions to contract language within minutes of [document] uploads, reducing the amount of time attorneys spend reviewing contracts by over 90%’.
This could be for ‘NDAs to procurement and sales agreements to complex investment and acquisition agreements’, they said.
Sangha commented: ‘Rapid growth and traction within our customer base are evidence that LexCheck has found a strong fit addressing the needs of large enterprises. We expect our momentum in the space will only grow as enterprise software, and legal technology specifically, become increasingly critical to all organisations.’
Miriam Rivera, Ulu Ventures CEO and formerly Google’s first VP/Deputy General Counsel, added: ‘Time-based competition in business is nothing new. Legal contracting as a source of comparative advantage in business is a feat few legal departments achieve. LexCheck technology speeds legal review by leveraging the limited time and high cost of talented attorneys to close deals and revenue in record time.’
Is this a big deal? The contract negotiation space seems to be attracting more and more interest, as the legal tech sector moves its focus from bulk review for transactions, to leveraging inhouse KM assets to improve the contract formation stage of the document lifecycle.
This type of tech can stand alone, or it could be a useful additional capability that could be integrated into a CLM platform. Either way, NLP is moving steadily across both sides of the signature line now.