Over a year ago, Pamir Ehsas worked as a tech lawyer at a prominent Norwegian law firm, helping clients such as OpenAI and other major tech companies with contracts, privacy, and other legal matters.
Now, Ehsas is building an AI-powered law firm of his own, and the tech cognoscenti are lining up to back it.
His company, Moritz, raised $9 million over four days, one week before graduating from Y Combinator, Ehsas told Business Insider. The famed startup accelerator wrote a fresh check alongside Urban Innovation Fund, 20VC, and Inception Fund, a Swedish investor that bet early on the legal software giant Legora.
The seed round also drew a “party” of individual investors, including founders of Reddit, Instacart, Cruise, Dropbox, Gusto, and Runway, as well as employees of ElevenLabs, Lovable, and OpenAI.
Moritz has become a part of a new wave of law firms trying to handle routine legal work for corporate clients without the Big Law price tag. The startup was one of three law firms selected for Y Combinator’s most recent batch.
Other law firms further along include Crosby, which reviews and negotiates contracts for companies like Cursor and Ramp, and Manifest Law, which helps foreign nationals secure work visas.
Moritz raised millions by Demo Day
By the time Moritz headed into Demo Day, where Y Combinator startups pitch investors, Ehsas and his cofounder, machine learning engineer Stefan Mandaric, had received interest from more than 200 investors. They set out to raise $3 million from venture firms.
Within a day of their first meeting, they had enough verbal commitments to fill the round.
Ehsas and Mandaric paused. Rather than press more firms for checks, they decided to build out their fantasy cap table of angel investors.
“The round was wrapped up and closed by Demo Day,” Ehsas said.
Moritz has handled $2 billion worth of contracts
At its core, Moritz combines software and human lawyers to speed up document drafting and review. In the last three months, the law firm says it has handled contracts worth $2 billion in aggregate value across 100 companies.
One of Y Combinator’s selling points is that the other companies in a startup’s cohort can become its earliest testers and customers.
Moritz took advantage of that network, Ehsas said, and within weeks, it was selling to some of the biggest companies Y Combinator has ever backed.
Airbnb CEO Brian Chesky responded to Ehsas within seven minutes, Ehsas said, and connected him with the company’s general counsel to set up a trial.
Moritz restarted itself as a law firm
Initially, Ehsas and Mandaric set out to build software to sell to lawyers, a play that put them closer to Harvey or Legora. They found that software that promises to make lawyers faster was a tough sell for a business that still bills by the hour. Ehsas likened the process to “eating glass.”
Last September, Ehsas said they terminated all of their existing contracts, “painful” as it was, and started over as a law firm.
The company does not charge subscriptions or bill by the hour. Instead, smaller customers pay a fixed fee upfront for each matter, with prices listed on Moritz’s website — for example, $500 for a job offer letter or $2,000 for a package that includes a master services agreement with all the toppings.
Larger enterprise customers use a tiered pricing plan, with Moritz charging an average of $500 to $700 per contract redline, review, or iteration. Calls with Moritz lawyers cost $200 each.
For years, “services” was a dirty word in software — something to avoid if you wanted to build a true subscription business. That’s changing as AI makes it easier to spin up software quickly, and startups seek other ways to build durable businesses.
Selling the work itself rather than the software that helps lawyers do it could become an advantage. Law firms like Moritz are betting that they will be better insulated from customers building software in-house or frontier model labs rolling out competing products.
What makes this approach attractive also makes it riskier. The liability does not rest solely with the customer.
Legal software companies usually warn in their contracts that the AI can make something up, or “hallucinate,” and that lawyers remain responsible for checking the work. If Moritz’s software gets something wrong, the law firm could be liable.
“We are fully accountable,” Ehsas said. “Maximum accountability for every word, redline, and piece of advice.”
The company tries to lower its risk by being extremely selective about the lawyers it brings on, refusing to hire junior attorneys. Lawyers who use its software come from Big Law firms like Fenwick, Cooley, and Goodwin. Moritz also relies on tests called “evaluations” to measure how well its software performs across specific tasks.
If all else fails, Moritz has, at least, “a very large insurance policy,” Ehsas said.
Have a tip? Contact this reporter via email at mrussell@businessinsider.com or Signal at @MeliaRussell.01. Use a personal email address and a non-work device; here’s our guide to sharing information securely.
Read the full article here
