On a drizzly spring morning stroll through New York’s Central Park, Max Junestrand, the 25-year-old Swedish founder behind legal tech startup Legora, opened up about a chip on his shoulder.
He started his company over a year after the founding of Harvey, the OpenAI-backed legal tech startup that has emerged as the apex predator in a fast-growing market for artificial intelligence products for law firms and corporate lawyers. Harvey has enjoyed a close partnership with the ChatGPT maker and secured major law firms as clients.
Now, as Legora bears down on new global markets, Junestrand tells Business Insider his company is gaining ground on chief rival Harvey — with less money and fewer employees.
“We’re not here to be some European No. 2,” he said. “We’re here to play.”
Founded in Stockholm in 2023, the startup helps legal professionals work smarter with a digital workspace built on top of large language models. Its application is used in nearly 20 countries by more than 250 clients, including the global firm Bird & Bird and Mannheimer Swartling, Sweden’s largest law firm.
Last week, at Legalweek, Legora threw down the gauntlet at Harvey by rolling out new product features aimed at serving global tier-one firms, such as a Microsoft Word add-in. Legora said it had signed Goodwin, a leading law firm for tech deals, as a client. It also opened a new office in New York City, the company’s first outpost outside Europe, where Junestrand will be based.
Not long ago, selling software to law firms looked like a losing business for startups. Lawyers worked mostly out of documents that were hard for software to read. They stored those files on physical servers on location for higher security and control over their data. But over the past few years, as even tech-averse lawyers recognize the clear potential of artificial intelligence, a new class of startups is trying their luck delivering software to the legal industry.
As a teenager, Junestrand competed professionally in video games before learning to code, figuring a career in tech could open more doors than esports. In 2020, he met his future cofounders, Sigge Labor, and August Erséus, during a volleyball game in the depths of the pandemic. The roommates shared Junestrand’s fascination with machine intelligence and a desire to build.
Labor and Erséus had been toying with software that could complete simpler legal tasks, but the state of large-scale language models at the time limited its usefulness. ChatGPT changed that. “It just became blatantly apparent that this was a paradigm shift,” Junestrand said. He left university, and the trio started a company, securing a conference room at a Swedish law firm to work from.
An investor shared on LinkedIn that one year ago, Legora had booked nearly $900,000 in annual recurring revenue, or the yearly value of revenue. Legora declined to share a more recent figure.
To date, Legora has raised more than $35 million in funding from investors such as Benchmark, Redpoint, Y Combinator, and Jack Altman’s fund, Alt Capital.
Legora’s web app looks like a cross between ChatGPT and a chart maker. Its search bar lets users ask questions about the contents of their internal data and browse the web and case law libraries. The app’s killer feature is tabular review. It enables the bulk upload of documents and runs software programs called “agents” to answer specific questions about the contents of those documents.
Junestrand took BI through a demo as a pretend lawyer advising SpaceX on raising a make-believe equity round, in which the company’s investors want to know about its financial health before deciding whether to write a check.
Junestrand dragged a folder containing dozens of loan agreements into tabular review. File names filled the far left column. In the next column, Junestrand wrote “loan amount” and clicked a button that expanded his prompt, telling the agents to extract the loan’s value from the contract. He repeated these steps to work out the loan term.
The agents tunneled through the loan agreements at blazingly fast speeds. In seconds, the columns filled with the dollar amounts and dates. Junestrand clicked into a field and an agreement appeared in the right pane, showing the section where it gleaned the answer.
“Great software has to be intuitive,” Junestand said. “Sadly enough, there’s a lot of software in the legal space that looks like it was built in the nineties and doesn’t prioritize design and ease of use.”
Though he doesn’t name them, it’s easy to figure out who he’s talking about. Two of the biggest players in legal tech are LexisNexis and Thompson Reuters. They boast decades of experience in creating products for legal professionals.
However, the old legal tech guard has one clear advantage over the challengers. LexisNexis and Thompson Reuters are sitting on troves of copyrighted data that feed their legal assistant products.
Sean Fitzpatrick, chief executive of LexisNexis North America, UK, and Ireland, spoke at Legalweek about how this data gives it an edge. “The systems are only as good as the data that sits behind them,” he said, “and veracity matters in the law. It matters a lot.”
Junestand thinks legacy software providers will struggle to keep pace with ChatGPT-era legal tech. He said the technology is moving too rapidly for the incumbents to evolve. He added that he made a conscious decision to keep Legora’s engineering team small and nimble, so they can respond quickly to the latest models and AI trends.
As for its battle with Harvey, Junestrand believes the best product will win over lawyers, even if Harvey’s ties to OpenAI help boost its brand and credibility.
“When we started, we were immediately at a disadvantage. We were a year behind,” Junestrand said, referring to Harvey’s headstart on Legora. “And so pace and speed of execution became the things that we optimized for.”
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