Legal Tech Startup Lexion Raises $20M to Expand Generative AI-Powered Services
Legal tech startup Lexion has raised $20 million in a Series B funding round led by Point72 Ventures. Lexion offers an array of AI-powered contract and business management services. The startup began incorporating generative AI last year through the AI Contract Assist plugin for Microsoft Word, which engages generative AI to help draft, negotiate, and explain contracts for people outside the legal profession.
Lexion leverages AI for streamlining contract setup, execution, and long-term management. The introduction of the AI Contract Assist plugin for Word integrated OpenAI’s generative AI models to speed up the process even more. The AI synthesizes terms, suggests areas for negotiation, and can condense the contract by section as a way of translating it for the layman. Lawyers with the Word plugin can write a prompt describing the goal of a contract clause, and the AI will generate one with appropriate language. The AI can also suggest how to negotiate specific parts of the contract and insert clauses from previously written contracts. Lexion’s tool will also translate contract clauses into more conversational language, summarizing what it means more clearly. The AI has been fine-tuned on contract language and related legal data, but the assistant is still in its early stages, but Lexion hopes to augment its capabilities through training on a company’s previous contracts.
“For us, AI isn’t just hype—it’s our past, our present, and our future. When OpenAI released davinci-003 last November, we already had a use case for Lexion. We’d been experimenting with GPT-3 for a year and, right away, we saw much better results. Within a few weeks, we rolled out a new plugin to our customers: AI Contract Assist,” Lexion CEO Gaurav Oberoi explained in a blog post. “These are the kinds of technological solutions that this round of funding will help us to provide to operations teams. Our goal is to help lawyers save 80% of their time spent redlining contracts and then continue to extend this efficiency boost to sales teams filling out RFPs, IT teams completing security questionnaires, and more.”
The new funding brings Lexion’s total investment to about $45 million. Oberoi claimed Lexion saw triple revenue for the third year running last year. Incorporating generative AI to help with contracts and other legal documents and services makes sense and has begun popping up in more legal tech environments. For instance, legal technology developer Rally published its own AI assistant for composing contracts using GPT-3 named Spellbook. Lawyers can embed Spellbook in Microsoft Word, much like Lexion, to generate suggestions on improving the language in a contract, summarizing the document to be understandable even to a child, and offering ideas for where negotiation could happen. AI-powered legal research is also under development by companies like Casetext. And AI legal assistant startup Harvey has raised $5 million in a funding round led by the OpenAI Startup Fund to answer questions and complete tasks for lawyers, producing and editing legal documents.