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If you’re a tech-focused lawyer, I’d love to know what you make of Veraty. Email me with your thoughts!

But before we get to that…

• Praetura Ventures and EHE Ventures have launched a snazzy new Founder Hub, full of advice for startup founders. It’s well worth a read.

– Martin

Can Veraty help startups ditch their lawyer?

Most startups don’t want to think about lawyers when they first get going. And yet if they don’t, they could be in for a whole world of pain later down the line.

This is a pain point that a wide range of companies have addressed parts of in different ways over the years. In the UK, the likes of Seedlegals and Vestd spring to mind, while Shizl is a startup we recently covered here at PreSeed Now.

Entering the fray with its own take on a solution for startups’ legal needs is Veraty.

“Two of the biggest blockers to startup and scale-up growth that we found is often the law; legal regulation, but also customer legals, legal teams and requirements, and then also data protection or cyber security,” says co-founder Jeremy Chan.

“So what we’ve tried to do is build in one platform, a legal AI that can handle all of those queries that startups and scale-ups might face, and unblock teams to help them grow quickly.”

In practice, this means a single AI interface to handle all the legal hurdles a startup might have. This, Chan says, includes everything from basic legal documents, to regulatory challenges, customer complaints, and closing B2B deals.

How it works

“The core of our platform is built around an AI agent workflow that takes in templates, documents, and data from our customers, as well as from our network of experts, but then delivers it in a form which is usable for your everyday business needs,” Chan says.

In the product’s current form, a Veraty user will type a question into the interface such as “A customer sent me this email. How do I respond?”

He says that Veraty is currently being used to help direct-to-consumer companies understand how customer queries or complaints might impact on their regulatory compliance requirements.

It’s also being used by B2B SaaS companies to help them complete deals with enterprise clients by meeting the required legal and security requirements faster. Chan claims Veraty can reduce such sales cycles by as much as two months, which for revenue-hungry startups, could be a big deal.

Veraty can provide both information and support in completing documents at speed.

Can it replace a human lawyer?

“The dream here is that we replace the lawyer,” Chan says.

“We know that for a lot of startups and scale-ups, getting outside help or hiring a lawyer or an expert is extremely expensive, and for a lot of smaller companies that are getting off the ground, that cost is really prohibitive.”

They’re not there yet though. Chan says that currently, around a quarter of the output from Veraty requires changes from a human lawyer. These cases are helping the team refine the product.

Additionally, Veraty includes the ability for customers to connect with a lawyer in the UK or Australia to finalise more potentially high-risk outputs from the software. Chan says around 26 experts are currently available through Veraty thanks to partnerships with legal and data protection advisory firms.

Because the AI has already done the bulk of the work, the cost of these human experts should be less than they would otherwise be.

The story so far

Chan grew up in Australia, where he studied law and went to work in the commercial and M&A legal field. Looking to do something more impactful, he switched over to working for a digital healthcare company.

There, he and his future fellow Veraty co-founder Ryan Turnbull found themselves building a team to deal with the legal challenges of expanding the business beyond Australia into international markets.

“After we built a team, we realised, surely there's a way that we can do this that's much more efficient and much more affordable for most startups and scale-ups? Can we essentially build this through technology?,” Chan explains.

Exploring the legaltech market, they found plenty of tools for lawyers, but not so much for laypeople in business. They realised that many startups were using ChatGPT to get their legals to a point where they could be passed on to a lawyer to finalise.

But, of course, there are good reasons to not trust a general purpose LLM-based chatbot with such tasks.

“So we thought, is there a way that we can streamline that existing workflow by having a more specialised, vertical legal AI that can do the work?,” Chan says.

“And then we went one step further: can we actually build a legal AI that can replace the need for a lawyer completely? We can have so much confidence in the outputs of the platform that you don't actually need to even engage a lawyer in the first place,” Chan says.

With Chan now having relocated to London, he and Turnbull formed Veraty (initially under the name Cloudspan) last year, bringing his sister Vivienne Chan, a data scientist, on board as the third co-founder.

Chan says they now have a working initial product and have onboarded their first six paying customers, with a further 10 companies using the software on a free trial basis.

The next steps include refining the workflows within the product to help users with specific use cases, rather than leaving it to them to go to the software with the right queries.

“We think we can build a really powerful, useful and accurate, legal AI. By ensuring we have the right context, reinforcement learning algorithms to power the outputs, and network of experts to provide the expertise, we think we can get there,” Chan says.

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