Truth Systems, a California start-up advised by Stanford’s Dr Megan Ma, has raised $4m in Seed funding, with the aim of helping law firms to apply ‘enforceable guardrails’ to AI tools.
Artificial Lawyer spoke to co-founder Nam Nguyen about what they are trying to do:
– What does this do in practical terms? What is it preventing? What is it helping to happen?
Charter – [ the name of the tool created by Truth Systems ] – first reads all of a firm’s internal policies and specific client engagement letters, then converts them into dynamic, enforceable guardrails. If a user inputs text or a prompt into an AI tool that violates the firm’s internal guidelines (e.g., pasting privileged communication or using the wrong tool for legal research), Charter will prevent the prompt from being sent and deliver a warning to the user in real time.
When Charter flags AI misuse, it records immutable audit logs. These logs help Innovation and InfoSec teams understand risk surfaces and identify where to focus AI training, promoting responsible AI adoption.
– How does it do this?
For each policy that firms want to enforce, we can train a Small Language Model to classify whether a violation occurs. These models are then deployed via a browser extension, which uses a larger model to orchestrate and determine which guardrails are appropriate to flag to users in real time.
– What does the customer have to do to make this work?
Our customers only have to deploy our browser extension to make it work. We exist on top of any vendor and public AI tools. Most firms work with us to build custom guardrails, where we would either translate their Acceptable Use Policy and OCG directly or help them monitor for any unwanted behaviours and build guardrails against them.
– What technology are you using for this?
We are using a blend of Smaller Language Models and Large Language Models.
– Which businesses is this aimed at?
We are primarily targeting law firms in the AmLaw 200.
– Please tell us about the company itself.
We currently have four people. The founders are Alex Mac and I (Nam Nguyen). Our founding engineer is Mikolaj Bocheński, who was the second hire at Legora and used to head the AI Research team there. We are based in San Francisco.
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The company added that it all started off because of a late-night conversation back in college between Alex Mac and Nam Nguyen outside a taco truck, where they couldn’t stop thinking about one key question: ‘How can humans interact with AI in ways that are safer, more transparent, and ultimately more human?’
That question led them to Stanford Law, where, under legal AI expert Dr. Megan Ma, they explored how legal and technical systems could work together to build trust in AI. What started as research became a conviction: good governance shouldn’t slow innovation down; it should make it possible. And hence Truth Systems and Charter was born.
And here’s a screenshot image from their dashboard, showing a number of monitoring features.
In terms of the investment, the round was led by Gradient, with participation Lightspeed Venture Partners, F-Prime Capital, Y Combinator, The LegalTech Fund, Pear VC, a16z Scout, Silver Circle, and Wndr Co, and angel investors that included Kaz Nejatian, CEO of Opendoor, and Lauren Wagner, former Head of Product for Trust & Safety at Meta.
Denise Teng, Partner at Gradient, added: ‘As AI reshapes tool use and the broader technology stack, the legal and compliance landscape is undergoing a generational shift. Truth Systems is building the monitoring, governance and policy engine that enables enterprises such as law, financial services, and beyond – to adopt AI safely and at scale. Their approach puts control back in the hands of compliance and security teams, and we believe this is exactly what will define the next wave of responsible AI.’
Good luck to them. You can see more here.
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