Former Cohere and Blue J leaders have founded a Toronto- and New York City-based law firm to challenge the industry’s costly pay-by-the-hour pricing model.
The news: Blackletter has raised $6 million USD ($8.5 million CAD) in seed funding to hire more lawyers and engineers, the startup announced on Tuesday.
The company was founded by ex-Cohere product and engineering leaders Jonathan Rosenbluth and David Stewart, alongside former Blue J COO Avi Brudner, to build a law firm on top of its proprietary AI legaltech platform. The firm uses an outcome-based, fixed-fee pricing model, claiming it can provide quality legal work faster and cheaper than traditional firms.
From the source: Rosenbluth told BetaKit in a phone call that Blackletter is building tools for its lawyers to work optimally, rather than building tools for other lawyers who are “disincentivized” to use them to their fullest. However, he rejects the notion that Blackletter is an “AI-native law firm.”
“We’re hiring great lawyers; to say that we’re an AI-native law firm feels like it connotes cheap and fast,” Rosenbluth said. “Nobody would describe a law firm that uses Microsoft Word as a Microsoft-native law firm.”
The context: The round was led by New York City-based venture capital firm Lerer Hippeau, with participation from Seven Stars, Maple VC, Garage Capital, and Ripple Ventures. Cohere co-founders Aidan Gomez, Ivan Zhang, and Nick Frosst, as well as TwelveLabs CEO Jae Lee and Adaption CEO Sara Hooker, also participated.
Since emerging from stealth this past June, Rosenbluth said Blackletter has courted 75 clients for its corporate, commercial, financing, merger and acquisition, and employment law services. Some of its clients include TwelveLabs, Fanatics, and Toronto-based Ada, which recently agreed to a $600-million CAD merger deal with US-based Dialpad, though Rosenbluth didn’t comment on whether Blackletter helped with the transaction.
Final thought: Rosenbluth said that Blackletter came together because it was “abundantly clear” to him while he was working at Cohere that AI should be improving legal services, but that he wasn’t feeling that improvement as a client. By building Blackletter on both sides of the border, Rosenbluth said the team thinks the company will ultimately make top-tier legal services more abundant and pressure the rest of the sector to innovate.
Feature image courtesy Blackletter.