Spellbook wants to change how contracts are drafted and signed in the age of AI software.
“Behind every data centre, every rocket launch, are thousands of agreements.”
Scott Stevenson, Spellbook
The Toronto-based company released its Spellbook Autonomous Contract Management (ACM) product on Tuesday to a limited number of customers; the company hopes the product will streamline contract creation, signing, and renewals. The early-access launch comes as Spellbook adds heft to its executive team and drills down on its positioning as an all-in-one contract manager for legal teams.
In an interview with BetaKit, CEO and co-founder Scott Stevenson described the new tool as the infrastructure for agreements, which he calls the “invisible thread” that ties organizations together.
“Behind every data centre, every rocket launch, are thousands of agreements,” Stevenson said. “It’s underappreciated.”
Founded under the name Rally in St. John’s, Nfld., Spellbook began as a contract review platform for lawyers. The Khosla Ventures-backed company was most recently valued at $350 million USD, and says it has more than 4,500 customers across 80 countries, including Dropbox’s in-house legal team and global law firm Kennedys. In March, it raised $40 million USD in debt to acquire smaller competitors amid a hot legaltech market.
The company says the new tool can automatically pull information and draft up new contracts based on emails or Slack data, then put together a queue for a lawyer to review once they open their computer. Once it’s drafted and OK’ed, Spellbook circulates the document to pull in signatures. Once signed, it goes into a searchable historical record, where the tech monitors and flags upcoming renewals. Compared to a contract-signing tool like DocuSign, Stevenson said, Spellbook’s AI platform was built for the whole contract lifecycle, rather than one part of the process.
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Stevenson said an additional feature, Spellbook Radar, is launching in Q4 that could flag external policy changes impacting contracts—for example, if a province updates an employment law that makes a contract clause unworkable. The company hopes to expand access to all customers in one to two months, after working through early feedback.
As AI copilots are being increasingly used in law practices, mishaps have drawn criticism and even legal consequences. Earlier this month, a Canadian lawyer was fined more than $30,000 for submitting court materials that had citations fabricated by an AI tool. But when it comes to contracts, Spellbook is betting that the tool will fix the human errors that already run rampant. According to a Spellbook Labs internal study, 60 percent of SEC-filed contracts had drafting errors. Most were minor, but one in 40 contracts had a “high-risk” error, the study said.
Spellbook has also brought in Canadian tech veteran Jean-Michel Lemieux, Shopify’s former chief technology officer. Lemieux calls himself an “executive skipper” (a nod to his love of boating and previous venture, SeaPeople) who can add value across several teams, not just product or engineering. In his new role, he immediately jumped into “quarterbacking” the ACM product launch, Stevenson said.
The focus on contracts aligns with Spellbook’s positioning in the booming legaltech industry, Lemieux said. While US up-and-comers Harvey and Legora go after the big law firms, Spellbook also targets small and medium-sized law firms and in-house legal teams at large companies, like recent clients Ikea and Panasonic.
“If we really want to accelerate commerce by speeding up contracts, commerce is happening via companies,” Lemieux told BetaKit last month. “If we increase the quality and the speed, then they actually get business out of that.”
Feature image courtesy Spellbook.