Robert Ambrogi Blog
LegalOn Technologies, a global company that provides AI-driven software for contract review and matter management, has closed a $50 million Series E funding round led by Goldman Sachs Growth Equity, bringing the company’s total funding to $200 million since its founding in 2017.
The company also today announced a strategic collaboration with OpenAI, the company behind ChatGPT, that gives LegalOn access to OpenAI’s latest models and brings together engineers from both companies to work on developing advanced legal AI agents.
Also participating in the funding round was existing investor World Innovation Lab (WiL), along with new participation from prominent Japanese financial institutions including Mori Hamada, Mizuho Bank, and Shoko Chukin.
LegalOn says it will use the capital to scale its agentic AI product development and its sales and marketing efforts.
“Legal teams are buried in time-consuming work that slows them and their businesses down,” said Daniel Lewis, Global CEO of LegalOn (pictured above with cofounder Nozomu Tsunoda). “This funding helps us build and scale AI that eliminates tedious contracting work, streamlining workflows and freeing people to think, decide and lead.”
More than 7,000 Customers
The Series E raise comes as LegalOn continues to show notable growth across its global operations. The company says it now supports more than 7,000 customers – a 40% increase year-over-year. In the U.S. and U.K., its business quadrupled over the past year.
LegalOn’s market position is perhaps most pronounced in its home base of Japan, where the company serves 25% of the nation’s public companies and 87% of its Fortune 500, including 40 global Fortune 500 companies.
Earlier this month, the company announced major upgrades to its user interface and legal AI tools and expansion into matter management, marking its evolution from a specialized contract review platform to a more comprehensive legal workflow solution.
Founded in Japan
LegalOn was founded in Japan in 2017 by Nozomu Tsunoda and Masataka Ogasawara, both former corporate attorneys, who set out to solve the inefficiencies they experienced in contract review. Tsunoda, who previously practiced corporate law at the Japanese firm Mori Hamada & Matsumoto, became frustrated with the frequency of mistakes and time consumed in reviewing contracts.
The company initially operated under the name LegalForce in Japan, where it quickly gained traction among corporations and law firms. By the time it expanded to the U.S. in 2022, LegalOn had already established itself as one of Japan’s largest providers of AI contract review technology, serving over 3,000 customers with a team of 400 employees.
When it launched in the U.S. the company named Lewis as U.S. CEO, later promoting him to global CEO. Lewis previously co-founded and led the legal research platform Ravel Law before its acquisition by LexisNexis in 2017. Lewis has been instrumental in spearheading the company’s growth in English-speaking markets.
Combining AI with Legal Expertise
LegalOn’s approach to legal AI distinguishes it from many competitors in the market. Rather than simply automating contract processes, the company combines advanced AI with legal expertise developed by its in-house team of attorneys. This hybrid approach, it says, ensures that AI recommendations are both accurate and also grounded in practical legal knowledge.
LegalOn’s AI contract review tool, Review, identifies contract risks and suggests revisions based on attorney-built playbooks and each organization’s unique legal standards. The company says it can reduce contract review time by up to 85%.
The company says its recent expansion into matter management represents a natural evolution of its platform. “Contract pain is acute when reviewing agreements, but it includes steps before and after, which is why we’ve expanded to matter management,” Lewis said at the time. “Now we can help legal teams intake, respond to and track all sorts of requests from the business, not just contracts.”
Partnership with OpenAI
Regarding the strategic collaboration with OpenAI it announced today, LegalOn says that the partnership gives it access to OpenAI’s cutting-edge models, enabling faster and better product development using the most advanced AI technologies.
As part of the collaboration, engineers from both companies will work together to develop advanced legal AI agents.
“From day one, we’ve focused on building solutions that help in-house legal teams move faster, reduce risk and drive greater business impact,” said LegalOn cofounder Nozomu Tsunoda, now the company’s group CEO. “Collaborating with OpenAI puts us at the forefront of innovation and accelerates our mission to transform legal work with trustworthy AI, enabling us to bring even more advanced tools that meet the high standards our customers expect.”
Product Development
LegalOn was among the first to introduce generative AI features for contract review when it launched AI Revise in April 2023, which it described as “the first AI contract editing tool enhanced by expert legal knowledge.”
Last year, it released its generative AI assistant, LegalOn Assistant, and earlier this year, it expanded its contract review platform with a feature to create custom playbooks.
Its platform updates earlier this month represented some of its most comprehensive developments yet, introducing matter management capabilities alongside significant enhancements to existing features.
Among the new capabilities were review of redlines to first-party paper, translation across 28 languages, AI knowledge management, and an expanded AI assistant that works across the entire platform.
Goldman Sachs’ Investment
Goldman Sachs said that its leadership of the round reflects its continuing commitment to legal technology innovation for corporate legal departments.
“By combining advanced AI with deep legal expertise, LegalOn is reinventing the contracting process and empowering legal departments to work faster and more strategically,” said Stephanie Hui, global co-head of growth equity at Goldman Sachs Alternatives. “As they rapidly gain traction across global markets, we believe LegalOn is uniquely positioned to define the future of AI-powered legal technology.”
Goldman Sachs had previously participated in LegalOn’s $101 million Series D round in 2022, which was led by SoftBank Vision Fund 2 and included participation from Sequoia China.