Legal Generative AI Assistant Spellbook Raises $20M
Generative AI legal assistant startup Spellbook has raised $20 million in a Series A funding round led by Canadian venture capital firm Inovia Capital and joined by Thomson Reuters Ventures, The Legaltech Fund, and others. Spellbook’s funding is another indication that there’s a lot of interest in incorporating generative AI and large language models into legal work as the profession adopts the technology at an accelerating pace.
Spellbook launched as a product for legal tech developer Rally before changing its name to Spellbook to emphasize how generative AI became the center of future projects. Spellbook works as an extension for Microsoft Word, capable of composing and analyzing contracts and other legal documents. The name refers to how the AI model can ‘cast spells’ to perform tasks like offering advice on adding new clauses, editing existing language, and otherwise improving a legal document. That includes pinpointing where there is room for negotiation in contracts. Spellbook employs OpenAI’s LLMs, graduating to GPT-4 after first rolling out with GPT-3.
Spellbook boasts that its tools can reduce the amount of time a lawyer spends on the routine, though still necessary, aspects of their job by as much as 30%. That’s enticed a client list of more than 1,700 law firms and legal teams to sign up, a 300% jump in just the last seven months. That translates to 86,000 contracts opened each month, with each month marking a new record. The new investment raises Spellbook’s total funding to over $30 million, with plans to scale its client list to 30,000.
“We’ve been amazed by the explosive usage growth our platform has experienced, since launching Spellbook as the first generative AI contract drafting tool in 2022,” Spellbook CEO Scott Stevenson explained. “This raise marks a major milestone for our team, and is indicative of the market traction we saw in 2023. With the new capital, we’ll continue innovating within the legal AI sector, partnering with the most law firms of any generative AI that we know of –and more importantly, to continue delivering new value to our customers.”
Spellbook staked an early claim in its field, but other entrepreneurs are pursuing similar, if not identical, goals. They’ve raised notable amounts of cash, including a $45 million round for Lexion and its AI-powered contract drafting tools. Meanwhile, generative AI for legal and other professional services startup Harvey went from a $5 million round led by the OpenAI Startup Fund at the end of 2022 to an $80 million round last month.