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Legal tech company closes on one of the industry’s largest funding rounds, announces new AmLaw 100 customers
In one of the largest investments in the legal tech industry to date, Casetext, which provides artificial intelligence (AI)-based legal research technology for lawyers, has closed on a $12 million Series B funding round. Canvas Ventures, a firm whose partners have previously invested in technology powerhouses Siri and Evernote, led the investment with participation from prior investors Union Square Ventures, 8VC, and Red Sea Ventures, among others.
Casetext officials said they will use the new funding to further develop the capabilities of its software platform, accelerate team growth, and expand the capabilities of CARA (its “Case Analysis Research Assistant”), the first automated research assistant for lawyers.
Through Casetext’s innovations, including CARA, the San Francisco-based company is addressing the $21 billion market for legal and regulatory information, according to Rebecca Lynn, general partner at Canvas Ventures.
“Having been a lawyer before becoming a venture capitalist, I can say with confidence the speed and scale of Casetext’s disruption of the legal research industry is profound,” Lynn said. “I think Casetext will be indispensable for lawyers, from associates to partners. Litigation is a battle and CARA is a lawyer’s best weapon,” Lynn said. “In addition, Casetext is the only company providing AI-powered legal research that is widely available today,” she added.
In addition to Canvas’s investment in CrowdFlower, the team also led investments prior to forming Canvas in Siri, Evernote, and Nuance while serving as partners at Morgenthaler Ventures.
As the law firm market continues to experience fee pressures from its client base amid an increasingly competitive landscape, more firms are looking to technology to add value for clients and increase their competitive edge. Casetext recently announced partnerships with leading law firm customers: Quinn Emanuel, Fenwick & West, DLA Piper, Ogletree Deakins and Greenberg Traurig, among others, all of which are using the company’s automated research assistant CARA to provide best-in-class services to clients.
CARA uses AI and natural-language technologies to automate key legal research tasks, arming lawyers with the highest quality research possible, ultimately allowing firms to spend time on higher-value, billable work—and not miss key precedents or decisions. Because CARA is powered by the Casetext research database, users have access to a full library of federal and state law, annotated by expert analysis from leading attorneys and law firms.
“CARA is an invaluable, innovative research tool,” said David Eiseman, partner at Quinn Emanuel. “With CARA, we can upload a brief and within seconds receive additional case law suggestions and relevant information on how cases have been used in the past, all in a user-friendly interface. This feature is unique to CARA, and a major step forward in how legal research is done.”
CARA alleviates the reliance on legacy legal search technologies that can be inefficient and miss relevant information, according to Casetext Founder and CEO Jake Heller, a former litigation associate at Ropes & Gray and former clerk for the Hon. Michael Boudin, U.S. Court of Appeals, First Circuit.
“As technology has become more ubiquitous, we see lawyers facing conflicting pressures: to spend less time researching, but also to find every precedent that could help your client win. With client expectations increasing and economic realities shifting, lawyers are looking for better, faster options,” Heller said.
In about a quarter of a second, CARA algorithmically analyzes every word in a legal brief, executes a sophisticated search over the entire legal knowledge graph and analyzes every word in the inputted brief, allowing CARA to run a statistical topic modeling and rank results intuitively, automatically surfacing the most relevant information.
“CARA enables users to carry out the most comprehensive search of the law and uncover the highest quality information possible,” Heller explained. “Law firms are licensing CARA after testing it on active litigation and finding that it uncovers valuable precedent that bolsters their clients’ positions.”
Casetext was founded by Heller in 2013, who was later joined by Pablo Arredondo, vice president of legal research. Laura Safdie, COO and general counsel, joined Casetext in 2014. Each previously practiced law, and Heller and Safdie served as president of the Stanford Law Review and managing editor of the Yale Law Journal, respectively. The company has a team of former litigation lawyers from top law firms as well as Ph.D. data scientists and leading AI engineers who built the revolutionary natural-language and search technology.
“We are grateful for the enthusiastic market reception and the support of Canvas Ventures,” said Safdie, who noted that Lynn will join the Casetext board. “The Canvas team has a history with AI and machine-learning companies Siri, Nuance, and CrowdFlower. We believe that knowledge will help us accelerate our mission to make the law more accessible and affordable for legal professionals.”
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