Lexoo closes $4.4m Series A financing as it looks to grow global panel appointments
2014-founded online legal marketplace Lexoo has closed a $4.4M Series A financing round led by Earlybird and including Forward Partners (which led its funding round in 2015) and Ned Staple, general counsel at Zoopla Property Group, among others.
Lexoo’s data-driven marketplace (its algorithms match the client and job spec) allows in-house lawyers to select law firms online from a global network. Lexoo’s clients compare and hire lawyers who bid competitively for their work and provide fixed fee quotes, incentivising them to work efficiently and giving clients cost certainty.
Speaking to Legal IT Insider, Lexoo co-founder Daniel van Binsbergen (pictured), who was previously an M&A lawyer at De Brauw Blackstone Westbroek said of the latest funding round: “It’s on the basis of our rapid international growth – we have over 800 lawyers on the marketplace over 50 countries now – and we are really gaining traction with GCs.
“You might have a company in the Netherlands hiring a lawyer in Korea.
“We were initially focussed on SMEs but now our focus is the in-house market and we are going up against silver circle firms and giving in-house teams a significant saving – in one instance the quote from a silver circle firm was 800% more than Lexoo.
“We line up the same calibre of lawyer but they are not working in an expensive environment.”
Lexoo will use the funding to invest in new technology, including automated contract drafting and project management tools to further increase efficiencies of its lawyers. The company also plans to expand its headcount to 45 employees internationally by 2020 with a particular focus on business development in order to grow awareness of its platform.
This year saw Lexoo win a place on the panel of Travelodge and van Binsbergen said: “We want to capitalise on those opportunities and increase the resource we need to win more panel appointments.”
Since its launch in 2014, over 3000 multinational companies, large corporates and high-growth startups have engaged Lexoo lawyers including UBS Asset Management, Travelodge, eBay, Ascential plc, VICE Media, Ocado, Monzo, Just Eat, Babylon Health, Secret Escapes, WorldRemit and ASOS. Lexoo is also on the legal panel of numerous FTSE 250 firms. Lexoo clients save at least 50% on legal fees but in some cases the savings can be considerably higher.
In a release out today, van Binsbergen says: “The traditional global law firm is a flawed delivery mechanism. The large dominant firms bill by the hour and are incentivised to overcharge. Furthermore, the decision makers are often senior equity partners and so take a very short-term view,” adding, “We have created a competitive and transparent market that is aligned with the interests of the customer rather than the partners of big firms.
“We’re seeing a new generation of in-house lawyers challenging established practices of big firms and looking for alternatives. Indeed there is a growing realisation that smaller specialist firms are not only more cost effective but also provide superior service. Meanwhile, larger corporates are increasingly hiring legal operations managers to review procurement practices and bring down legal costs. All of this is extremely encouraging for Lexoo.”
Staple, who in 2012 founded food tech startup Farmdrop, said: “I was struck by how Daniel and his team understood the need to grow supply and demand in unison, which is critical to building successful platform businesses and generating network effects. There’s undoubtedly a structural shift going on in the legal sector, with both lawyers and their clients wanting greater flexibility and more efficiency. Indeed the number of deals and volume of money going into innovative businesses in the sector shows that significant change is already well underway.”