NOVEMBER 29 2022

Published in The Australian Financial Review

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Legal automation start-up Josef has signed on a bevy of major law firms as new clients, helping it bank $5.2 million in fresh funding.

The company, which was established in Melbourne in 2018 by former Arnold Bloch Leibler lawyers Tom Dreyfus and Sam Flynn and engineer Kirill Kliavin, provides an easy-to-use software platform that lets lawyers and companies automate tasks such as document drafting, collating and analysing data and client interactions.

Having already signed on local firms including Clayton Utz, MinterEllison and Herbert Smith Freehills, the company has been expanding offshore and has now added renowned US venture capital-focused law firm Gunderson Dettmer and the UK’s Clifford Chance to its customer list.

Speaking to The Australian Financial Review, Mr Dreyfus said 70 per cent of the company’s revenue came from outside Australia in 2022.

“One thing we’ve really learned is how big the legal market is. There’s $1 trillion spent on legal services globally each year, and 70 per cent of that spend is in the US,” he said.

“One thing we’ve been able to capitalise on is TheLegalTech Fund, a New York-based VC, joined our register in the last funding round, and they’ve been helpful in introducing us to people and establishing the brand.

“The other thing is the legal industry is a very connected global industry. So when we start working with a global firm like Clifford Chance, or even a large regional firm like MinterEllison, we use that as a launch pad into prospective customers of a similar size in the US.”

Because Josef’s platform requires no technical ability to use, lawyers can build their own automation tools without having to be able to code.

In the last 12 months, tools created on its platform have been used more than 300,000 times, and they now integrate with other core technologies such as DocuSign. Salesforce, Office 365 and iManage.

Gunderson Dettmer said it was using Josef to improve its efficiency, ranging from automating workflow tools to contract automation bots and automated securities advice.

“With Josef in our innovation technology stack, our attorneys are empowered to build nimble tools for the long tail of use cases we see for content and expertise driven automation,” Gunderson Dettmer director of client experience Joe Green said.

“We’re using Josef to rapidly prototype and deliver process and workflow innovations so that the firm can provide more value to our clients more quickly.”‍

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OIF Ventures, Flying Fox‍

The new funding round was led by OIF Ventures and had participation from Carthona Capital, Flying Fox Ventures, Jelix Ventures and Saniel Ventures.

OIF partner Jerry Stesel said the “deep domain expertise” of the founders was a selling point for the company.

“When investing we look for a business that has both a solid understanding of their customer’s needs, but also longevity in their ability to service that need. What’s exciting about Josef is its potential once a customer is onboard, the platform’s scope never stops growing,” he said.

The capital will be used to expand further into the corporate market, aimed at in-house legal teams.

So far, its current corporate clients include Nutanix, L’Oreal, CoreLogic, Bupa, and Who Gives A Crap.

“The overall vision for the platform is an automation workbench for every lawyer everywhere,” Mr Flynn said.

“Bupa is a great example of a lage corporate legal team who are always tasked with doing more with less, and they’ve automated whole suits of common legal documents like agreement letters and internal things for regulatory compliance.”

The company has been in touch with lead investor OIF Ventures for four years after meeting the fund when it went through the Startmate accelerator program in 2018.

“Raising this round was different in a couple of ways. The first way is the Josef is more mature – we’ve raised capital before, so having conversations with VCs who have known us for a little while felt different,” Mr Dreyfus said.

“We’ve always grown Josef to be capital efficient... but it’s not something that’s been front and centre in previous rounds. [Now], it’s something that was asked about and attracted significant interest in this round.

“This capital lets us put a laser focus on the US market.”