The process of preparing a contract to establishing a final signed document may be a few hours for a simple agreement but can take as long as weeks and months for more sophisticated agreements depending on each party’s needs. Legal bills typically accrue throughout the process. Technologies to optimize contract management are emerging to streamline the experience. LexCheck is an AI-powered contract review platform for legal teams. Based on sets of industry and company playbooks that benchmark against precedents, the platform is able to automate the first pass of the contract review process, reducing turnaround times and thus reducing costs. For nascent or custom areas/industries that the platform hasn’t had experience in before, users can upload 25-50 samples that can be used to train the AI. LexCheck has tripled its customer base in the last year, working with leading law firms, financial institutions, and other partners across fourteen industries that have all been able to successfully leveraged the platform to accelerate business transactions, while freeing up resources.
AlleyWatch caught up with LexCheck CEO and Founder Gary Sangha to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $22M, and much, much more…
Who were your investors and how much did you raise?
We raised a $17M Series A, led by Mayfield Fund.
Tell us about the product or service that LexCheck offers.
LexCheck uses artificial intelligence, including natural language processing (NLP), to help legal teams accelerate the most tedious parts of contract management—reviewing, editing, and negotiating contracts.
In addition to legal professionals, LexCheck can help sales and procurement leaders move contracts forward faster by standardizing the contract negotiation process, which lessens the burden for, and preempts escalations to legal teams. This gives other areas of the business more autonomy without compromising quality or introducing risk.
LexCheck delivers on this promise by providing organizations with digital playbooks—based on industry best practices or customized to each company’s contracting standards—that automate first-pass contract reviews by delivering redlines, comments, and contextual insertions and deletions and automatically escalating deviations from playbook-preferred positions in minutes. These industry-standard playbooks are available for use immediately. If custom playbooks are required, LexCheck only requires between 24 and 50 sample documents to train the AI, whereas other capabilities can require hundreds, if not thousands.
What inspired the start of LexCheck?
As a lawyer and entrepreneur, I’ve experienced firsthand the complexity, heavy workload and time constraints faced by corporate legal teams, as well as the delays prolonged contract negotiations can cause. I started LexCheck to address these challenges and minimize the friction.
How is LexCheck different?
Because LexCheck was built by practicing lawyers alongside linguists and software engineers our solution works the way lawyers need it to.
Additionally, LexCheck’s technology can be implemented quickly and easily as it only requires a small set of samples, between 24–50 whereas other solutions often require hundreds, to develop customized contract playbooks and minimal training is needed for end users.
What market does LexCheck target and how big is it?
All types of businesses rely on contracts. LexCheck has been able to help organizations across more than 14 industries—including some of the world’s largest financial institutions, fastest-growing technology providers, and top law firms—accelerate revenue and actualize on business decisions typically delayed by prolonged contract negotiations. The platform helps legal teams as well as sales and procurement leaders.
What’s your business model?
LexCheck is a SaaS solution that does not require any additional outsourcing to legal experts. We provide organizations with digital playbooks—based on industry best practices or customized to each company’s contracting standards—that automate first-pass contract reviews by delivering redlines, comments, and contextual insertions and deletions and automatically escalating deviations from playbook-preferred positions in minutes.
How are you preparing for a potential economic slowdown?
Over the last few years, LexCheck experienced significant growth, including a $3M seed round and tripling its customer base which has helped set us up for success. The current macroeconomic challenges are causing businesses to need to do more with less, and our product enables businesses to do this by speeding up key business processes such as the time spent reviewing contracts and time to contract execution.
What was the funding process like?
Funding in the legal tech sector has slowed over the last few quarters, so we are grateful for the fact that our process went smoothly. Mayfield quickly recognized the value LexCheck brings to not just legal teams, but across enterprises.
What are the biggest challenges that you faced while raising capital?
It has been a tough economic environment for legal tech companies to fundraise, and as reported by Law360, very few legal tech startups successfully fundraised in Q3 and Q4 of this year.
What factors about your business led your investors to write the check?
The success we’ve seen with our customer base over the last year made it evident we have a product market fit. Our investors recognized the value LexCheck can bring to the entire business, not just the legal team. As businesses grapple with the current macroeconomic challenges, they need a solution like LexCheck that can accelerate key business processes.
The success we’ve seen with our customer base over the last year made it evident we have a product market fit. Our investors recognized the value LexCheck can bring to the entire business, not just the legal team. As businesses grapple with the current macroeconomic challenges, they need a solution like LexCheck that can accelerate key business processes.
What are the milestones you plan to achieve in the next six months?
We look forward to using this funding to continue building our technology and accelerating the delivery of our product vision, while maintaining a focus on the customer experience. Exciting things are on the horizon!
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on building a good business. If you focus on customer success and customer service, great things will happen.
Where do you see the company going now over the near term?
2023 is going to be a breakout year for AI in legal. As the legal industry faces the challenges of high attrition and turnover rates, lawyers will turn to solutions like LexCheck for help.
What’s your favorite restaurant in the city?
Don Angie!
