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When Lehman Brothers collapsed during the 2008 financial crisis, Jason Boehmig lost his job at a US investment bank. Unlike most of his peers, Boehmig knows what his next step is. He went to law school, which he had always planned to do. But this comes with the advantage that he first worked as a trader at Lehman, where he saw the transformative potential of new technology. Today, he is the co-founder and CEO of Ironclad, which develops automated contract management software for law firms and enterprises. The San Francisco-based business is one of several legal tech unicorns — companies valued at more than $1 billion — that have received funding from leading startup investors.
After law school, he worked as a technology attorney at Silicon Valley law firm Fen wick & West while studying coding on the weekends, and concluded that well-designed technology could change—or rather, how lawyers approach contracting. "The technologists, when they were building software for lawyers, didn't get it — and the lawyers never used the technology because it wasn't what they wanted," he said.
Launched in 2014, Ironclad has won automated contract work from companies such as L'Oréal, Mastercard and Dropbox. Customers can create contracts and negotiate with parties using a digital platform with software that can extract data from contracts that is useful for other parts of the business. It can handle all types of contracts, from sales agreements to complex non-disclosure agreements. Ironclad is valued at $3.2 billion and has received a total of $333 million in backing from leading venture capital firms such as Y Combinator, Sequoia Capital and Accela. Other legal tech unicorns include Clio, which provides cloud-based legal technology, and cloud-based e discovery company Ever law. Based in Texas and providing AI-powered e discovery software, Disco will set sail in July 2021. Supporters are coming Since then, venture capital money has poured into legal tech start-ups, especially in the US. Outside investors are waking up to the potential benefits of technology that makes lawyers' lives easier, whether it's signing tools or contract drafting and review software. Also, the legal sector's previously lagging approach to technology adoption means the potential for growth is seen as greater.
$1 billion+
Venture capital investments in the nine months to September 2021, according to Crunchbase Last year, data provider Crunchbase calculated that legal tech companies topped $1 billion in venture capital investment in the nine months to September 2021, surpassing the previous high of $989 million in 2019. A report by LawtechUK, a government-backed initiative to help modernize legal services, found that regulation and management of legal documents attracted the most money. It estimates that greater use of digital technology by legal service providers could bring them an overall productivity increase worth £1.7 billion a year.
Perhaps inevitably, some liken the growth of legal technology to the explosion of technological innovation in financial services. But it's still small when measured next to the fintech sector.
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