Lawhive raises $12M to expand its legal tech AI platform for small firms

U.K.-based legal tech startup Lawhive, which offers an AI-based, in-house “lawyer” through a software-as-a-service platform targeted at small law firms, has raised £9.5 million ($11.9 million) in a seed round to expand the reach of AI-driven services for “main street” law firms.

To date, most legal tech startups that have deployed AI have concentrated on the big, juicy market of “Big Law” — large law firms that have a presence throughout the country or globally and are keen on pushing AI into their workflows. Such startups include Harvey (U.S.-based; raised $106 million), Robin AI (U.K.-based; raised $43.4 million) and Spellbook (Canada-based; raised $32.4 million). But startups have paid scant attention to the thousands of “main street” law firms, which have far smaller budgets and are harder to monetize.

Lawhive targets small law firms or solo lawyers running their own shops. Lawyers can use its software to onboard and manage their own clients, or can sign up for Lawhive’s marketplace to be matched with individual customers and small businesses.

The startup says it applies a variety of foundational AI models as well as its own in-house model to summarize documents and speed up repetitive tasks such as KYC/AML, client onboarding and document collection for both lawyers and their clients. The company says its in-house AI lawyer, “Lawrence,” is built on top of its own large language model (LLM), which it claims has passed the Solicitors Qualifying Examination (SQE) with an 81% grade against a passing grade of 55%.

“Pretty much all of the existing legal tech — AI companies like Harvey, Robin AI or Spellbook — all go after the corporate market,” Pierre Proner, CEO and co-founder of Lawhive, told TechCrunch. “That’s a very small number of big law firms in the U.S. or the U.K. We’re trying to solve the problem in the consumer legal space, which is a totally different and separate market. It’s served, at the moment, by — in the U.K. — 10,000 small law firms.”

Proner said smaller firms have to manage higher costs amid a shrinking market. “They’ve got high costs of staffing, with paralegals, junior lawyers and trainees. They only have one-to-three actual senior lawyers who are earning any money. So the model doesn’t work. There’s this huge exodus of mid-career lawyers from the main-street/high-street model, and a lot of them are going freelance or self-employed. That’s where we’ve sort of seen a lot of traction.”

Although the U.K.’s consumer legal market is worth an estimated £25 billion, like most legal markets, it’s groaning under the weight of its own costs. This means around 3.6 million people have an unmet legal need involving a dispute each year, and around a million small businesses handle legal issues on their own. So there’s a strong opportunity for automation to help the sector dial up productivity.

Proner added, “We do combine [our model] with foundational models from OpenAI and Anthropic, as well as open source models. But it is our own model, which has been trained on the data that we’ve been able to gather from thousands of cases.”

The startup plans to use the seed round to enter other markets, per Proner. “We have our eyes on other markets yet to be publicly disclosed,” he said.

Lawhive’s lead investor for this round may provide some clues about which markets the company may be considering: The seed round was led by GV, the venture capital investment arm of U.S.-based Alphabet. London-based investor Episode 1 Ventures also participated.

In a statement, Vidu Shanmugarajah, a partner at GV, said, “As a lawyer by training, I have experienced first-hand how needed technology-driven innovation is in the legal sector. Lawhive represents a transformative shift for both lawyers and consumers.”

Previously, Lawhive had raised £1.3 million from Episode1 at pre-seed.