Superlegal, the first artificial intelligence-powered contract review platform for small and medium-sized businesses authorized to practice law in the United States, today announced that it has closed a $5 million seed funding round co-led by Aleph and Disruptive AI fund.

The investment round also attracted participation from Alicorn Venture Capital and Tom Glocer, the former chief executive of Thomson Reuters. This follows a grant the company received from the Google AI Startups Fund.

Superlegal provides a comprehensive software-as-as-service platform with AI-powered and lawyer-verified contract reviews for small and medium-sized businesses to handle commercial contracts efficiently and cost-effectively. It says it can also assist them with accurately reviewing and advancing contracts without relying on a legal department or outside counsel.

The company can do this because there was a regulatory change in the state of Utah two years ago, Superlegal co-founder and Chief Executive Noory Bechor told SiliconANGLE in an interview, which created a program that improved access to legal services.

“No one that is not a lawyer can practice law — it’s called unauthorized practice of law, or UPL,’ Bechor said. We were able to convince the Utah Supreme Court that we, as a technology company, have expertise when it comes to commercial legal. And we received a specialized license to practice law as a technology company, which allows us to provide legal services SaaS platform to people who are not lawyers.”

Bechor explained that because the company deals with commercial law it is not state-specific, such as litigation, which means that the license allows the company to provide support in all 50 states.

Superlegal makes its technology very easy to work with for businesses: essentially, it’s a service a lot like going to an outside council to review a contract between two commercial parties. At the core, it tries to digitize the experience of working with an actual lawyer. Once a legal document has been drafted, it can be uploaded to the platform where it is reviewed by the AI. In what’s currently on the market, he said, problematic portions are “red lined,” compared with the client’s preferences, and the recommendations are made for modifications.

In the second phase, the AI results are vetted by human attorneys to make certain that outcomes from the system are accurate. That means at all times there is a human in the loop before the document is returned to the client. 

In the case of Superlegal, clients always get an answer within 24 hours, Bechor emphasized. “That’s kind of a big deal,” he added.

If a construction or distribution company can get its contract completed faster, it means that they can close the deal faster. When it comes to contracts it’s directly related to sales and revenue activity for small and medium businesses and their ability to make money. According to Bechor, this can lead to up to a 70% reduction in deal cycle time and because businesses can eschew internal and external counsel it can provide up to a 90% reduction in legal costs.

Contract negotiation is a major challenge for many businesses, especially the construction sector which is made up of more than 3.6 million firms, which oftentimes ink deals between more than 100 suppliers and contractors. In a recent case study, ESC Spectrum, an Austin environmental services and compliance company, tapped Superlegal to do their commercial contracts. According to the company, the AI service is saving the company $8,000 per month and almost 16 hours per month previously spent discussing contracts with the council.

Superlegal already exists in a market that is filling up with legal AI firms, but many of them, such as Harvey AI and Eve, are directed at providing chatbots that assist legal professionals. Bechor said one of the challenges of providing a new legal AI tool in the market is the potential customers and the problem that needs to be solved. So when he launched Superlegal, he aimed to build something designed for business lay people, to provide them with a service that could unburden them.

With the new funding, Bechor said, the company will invest in product development aligned with the direction that AI interfaces are taking the industry. Right now, that’s still an evolving path, which could see Superlegal become a chatbot that clients can talk to on their phone or a plugin that appears alongside them when they’re conducting business. Bechor added that until now the company has been somewhat quiet, but there have also been a substantial number of happy customers, so there are also plans to expand marketing and increase brand recognition.

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