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Lexion, a platform that leverages artificial intelligence to optimize legal contract workloads, announced today that it has closed an $ 11 million Series A funding round led by Khosla Ventures with participation from Madrona Venture Group and Wilson Sonsini. The capital brings the company’s total raised to $ 15.2 million to date, and co-founder and CEO Gaurav Oberoi says it will be used to support the development of a workflow module designed to help legal teams navigate manage hiring, negotiations, approvals and signatures. .
According to Gartner, legal departments will increase their technology spending by 300% by 2025, yet they will only get 30% of the benefit from their contract lifecycle management (CLM) software due to complexities with collection. requirements, change management and user adoption. Many CLMs require a lot of time and resources to generate value. According to a Clio survey, when using CLM, attorneys spend only 2.3 hours a day on billable tasks and collect an average of only 1.6 hours of their billable time.
Incubated at the Allen Institute for AI in 2019, Lexion offers an NLP system that converts contract text into structured data and delivers it in a repository with search, reports, alerts, permissions, and integrations. Beyond this, the startup offers a range of legal support services that aim to help companies increase efficiency and recognize more revenue.
The three Lexion founders, Oberoi, Emad Elwany and James Baird, met at the Allen Institute for AI, where they were exploring ways to commercialize AI research, specifically NLP. Oberoi created several software-as-a-service companies, most recently at SurveyMonkey, while Elwany helped create NLP products at Microsoft, including the company’s AI-powered calendar scheduler and the company’s conversational AI platform.
“In-house attorneys are skilled individuals who want to work on high-value tasks for your business. However, up to 50% of your week can be spent on relatively low-value tasks, such as searching for contracts for teammates, answering trivial questions about contracts repeatedly, and spending weeks reading contracts to create reports for the company, ”Oberoi said. to VentureBeat in an email. Questions and answers. “Lexion eliminates these low-value tasks by turning contracts into structured information, unlocking enormous time-saving value for entire companies.”
The Lexion platform centralizes contracts in one place, essentially converting them from Word-like documents into databases with columns like “parties,” “effective date,” and “payment terms.” A search box and connectors for Slack, Microsoft Teams, Salesforce, Coupa, and other business systems make it easy to find contracts, while reporting tools allow users to answer questions like “Which supplier or customer contracts will expire or renew the contract? next month?” and “Which customers have limits on rate increases?” without having to read thousands of pages.
Lexion claims to have trained more than 125 different machine learning models to extract key information, terms and clauses from commercial contracts, such as orders, mergers and acquisitions, statements of work, contractor agreements, employment contracts and company financing documents. Your system can recognize when a single PDF contains multiple pasted contracts, such as a master agreement followed by an order form. And you can track contract dates and send reminders of upcoming events like automatic renewal cancellation, notification deadlines, and expiration dates.
“We have invested a lot, not only in NLP to understand prose, but also in understanding tabular structures, handwriting, and troubleshooting optical character recognition,” Oberoi said.
In the third quarter, Lexion, which competes with Cortical, Pactum, LinkSquares, Evisort, Contractbook and Agiloft, plans to launch the aforementioned workflow module, which Oberoi says was designed based on feedback from more than 50 general advisers, attorneys and contract managers in a range of businesses. You’ll provide a dashboard to manage intake and assignments while letting the rest of the company email applications, red lines, and follow-up questions.
“The consistent themes we heard were that other CLMs failed because they required too much planning and requirements gathering upfront, then they had to be configured based on those time-consuming requirements and consulting fees, and then a lot of change management and training. a process was needed to implement it, and all this, only if there was broad buy-in from executives for it to happen, ”Oberoi said. “It is surprising that in 2021 most of the departments of the companies will have standard allocations in the budget to buy software products as a service, but the legal one does not.”
In the past 6 months, Seattle, Washington-based Lexion says it has seen rapid growth, increasing revenue by 400% and attracting major brands such as OfferUp, Blue Nile and Outreach. The platform now has tens of thousands of users across all segments, including software, consumer packaged goods, and biotech, and it expects to triple revenue over the next year as it expands its workforce from 31 employees to more than 60.
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