Wordsmith, a fledgling Scottish legal tech startup, has one way or the other managed to draw the backing of two well-known enterprise capital firms. The startup targets in-house legal teams and law firms with an AI platform that they will configure to assist other staff in the corporate. This manner, anyone in the corporate can solicit help with legal tasks equivalent to reviewing contracts and answering specific questions on a document.
Incorporated in October last yr, the Edinburgh-based company is the handiwork of former senior TravelPerk executives Ross McNairn (CEO) and Robbie Falkenthal (COO), alongside CTO Volodymyr Giginiak, who served in various engineering roles at Microsoft, Facebook and Instagram. Six months after leaving their previous positions, Wordsmith already claims notable customers, equivalent to Trustpilot, while it’s partnering with no less than one major law firm — DLA Piper.
This early traction has garnered the eye of world VC firm Index Ventures, which has led a $5 million seed investment into Wordsmith alongside General Catalyst and Gareth Williams, founder and former CEO of Scottish tech unicorn Skyscanner.
That such a young Scottish startup has secured the backing of two VC firms which have collectively invested within the likes of Facebook, Slack, Sonos, Airbnb, Stripe and Snap speaks not only to Wordsmith’s early promise, but in addition the founders’ pedigrees. Prior to TravelPerk, McNairn founded a travel management startup called Dorsai Travel. He sold it to Skyscanner just nine months after launch and have become Skyscanner’s head of product. He then joined one other unicorn, secondhand shopping app LetGo, before landing at TravelPerk.
On top of this, McNairn can be a certified lawyer, a career he left after a few years to change into a software engineer.
Legally fond
The legal tech space is hot. Up to now six months alone we’ve seen several “co-pilot for lawyers” emerge, equivalent to Harvey AI within the U.S. and Luminance within the U.K. Other legal tech startups, equivalent to Definely and Lawhive within the U.K., have raised decent seed and Series A rounds, as have Alexi (Canada) and Leya AI (Sweden).
These corporations are tackling the legal sector from various angles and regional focal points, but they’ve one thing in common: They’re all riding the generative AI wave.
As with other paperwork-heavy sectors, legal eagles are looking for ways to automate repetitive, labor-intensive work, in order that they will deal with more strategic tasks. That is where Wordsmith enters the fray, providing what it calls a “lawyer-in-the-loop” generative AI platform.
While Harvey AI is targeting lawyers themselves, Wordsmith is aimed more at employees inside an organization, with legal teams configuring the platform behind the scenes by connecting it to all their very own data sources. Lawyers remain available when needed.
McNairn draws comparisons to something like TravelPerk, which provides SMEs a self-serve business travel management platform that enables managers to define the policies and approval processes. Employees do all their very own bookings inside those parameters.
“At TravelPerk considered one of the massive steps [we made] was that we went from attempting to speed up the travel team by selling them barely higher tooling, to mainly enabling the remaining of the business to self-book,” McNairn told TechCrunch. “After which the travel team just administrated, checked and made sure that it was calibrated accurately. And that shift of constructing tools only for the function, as a substitute to constructing tools for the remaining of the business to work more effectively, is a big change in how you’re employed.”
Firms can configure Wordsmith in two core ways: as an autopilot for less complicated matters that don’t need expert oversight, and as a co-pilot whereby a lawyer is all the time within the loop to offer their seal of approval before any formal responses are provided.
A typical workflow might involve someone in sales needing to scrutinize a brand new contract, or perhaps procurement attempting to close a deal and who needs access to information equivalent to the corporate’s security posture — the sorts of questions which can be fairly standard and where the responses aren’t prone to change much. By querying Wordsmith, anyone can get the needed information.
Other potential use cases might include someone issuing an organization with a subject access request (SAR), whereby businesses in certain jurisdictions are legally obliged to honor requests related to private data access. On this instance, Wordsmith may very well be configured to simply accept a submission and connect with an organization’s ticketing system, and respond either with the requested information, or with a template response outlining timescales and the subsequent steps — whatever an organization’s internal guidelines and processes dictate.
Model behavior
Wordsmith uses a mix of foundational large language models (LLMs), including OpenAI’s GPT-4 and Anthropic’s Claude.
“We use the fitting one for the job,” McNairn said. “Some are really good at analyzing things like logic inside legal agreements, and a few are really good at being extremely precise on helping us to alter language. Claude is excellent at rationalizing through problems, and OpenAI (GPT-4) is just all-round unbelievable, with different dimensions.”
Enterprises have shown a bit of trepidation at embracing generative AI, which McNairn said the corporate is addressing in other ways. This includes allowing corporations to stipulate that their data doesn’t leave the EU. It also guarantees not to coach its AI on corporations’ data. Wordsmith configures a “private instance” for enterprises, meaning it connects in to data wherever it’s (e.g. Google Drive or Notion) to enhance a response using an organization’s own data, but this data isn’t used to coach the model for other corporations.
“We use a way called RAG (retrieval augmented generation),” McNairn said. “So we’re not training on their data — we’re just using it when it’s needed. We recollect it, use it to complement the reply, after which give them a response.”
High frequency
While enhancing in-house legal teams can be Wordsmith’s core goal initially, the corporate can be seeking to work with law firms, as evidenced by its early tie-up with DLA Piper. On this instance, DLA — a worldwide billion-dollar legal powerhouse — is co-developing AI agents in partnership with Wordsmith, with a view toward distributing this to its own customers.
So in effect, they’re inputting their very own technical knowledge to enhance Wordsmith for very specific legal domains. It could change into something that they will sell on as a brand new variety of legal service, presumably at a lower rate.
“It’s higher frequency and lower cost to interact with firms’ knowledge in this fashion, moderately than paying hundreds of dollars an hour,” McNairn said. “It’s [also] a significantly better solution to show they’re progressive and searching to adopt AI.”
This business model could work particularly well for small-to-midsize law firms, where Wordsmith may very well be engaged to capture greater jobs or tackle more clients.
McNairn says that while this offering remains to be in its early design stages with DLA, Wordsmith will likely commercialize this soon. “It’s just not there yet,” he said.
With $5 million within the bank, McNairn says that Wordsmith will now speed up its hiring each in Scotland and the U.S. The corporate counts nine employees today, and while some are based in London and/or within the strategy of moving up, McNairn says he’s keen to make Edinburgh the corporate’s center of gravity.
“It’s the ecosystem thing I’m quite enthusiastic about,” he said. “There have been three unicorns that I’ve been a part of before this, and I just wish to construct something cool in Scotland.”
