Software as a Service Company — Salesforce, Shopify, Zoom, etc. — They are the stalwarts of the modern business economy.
Avantia, a London-based legal services startup, wants to become a Service-as-a-Software provider for businesses seeking a cost-effective law firm. Avantia aims to blend the typical services of a traditional corporate-focused law firm with tools built on a new generation of legal technology software, especially generative artificial intelligence.
Avantia’s business model was founded on using AI tools to automate low-value legal tasks. Avantia’s business model provides law firms with significant cost efficiencies and allows them to add more to their flat-fee menu of services. It is based on the idea that it can attract customers. First, billable hours are no longer required.
Avantia, which has about 100 employees and 90 clients, primarily in the wealth management industry, is expanding into the United States with the opening of a New York office early next year. Avantia provides a typical range of routine legal and compliance services, including contract and non-disclosure drafting, case law searches, and contract reviews, with approximately 60% of its revenue coming from the United States. It’s a thing.
“There is a tremendous opportunity to combine[legal]services with technology-enabled services,” said James Sutton, CEO of Avantia. “So it’s not going to be a SaaS business per se, it’s not going to be a service business per se.” — It should be located in the middle. ”
Mr. Sutton, a former general counsel at asset management firm Ok Jihoo, now known as Sculptor Capital Management, founded the company in 2019 in partnership with an AI researcher at the University of Oxford. Legal Dive spoke with Sutton about how AI is changing legal services, why GCs are struggling to make AI cost-effective, and why speed often trumps price for many clients. I spoke to him.
Editor’s note: This interview has been edited for clarity and brevity.
james sutton
Permission by Avantia
Legal initiatives: Many in-house GCs see legal AI software as a way to save money and make their departments significantly more efficient through automation relatively quickly. Is it too simple?
James Sutton: The feedback I got from general counsel was twofold. The first is that the demo doesn’t do much of what it was sold. And second, to add value, you have to work harder than you think. So AI companies are pushing a lot of the implementation stuff onto GCs and saying, let’s figure out how to use this technology. That’s one of the reasons why we think our business model is interesting. Because we do all of this in-house. We will solve them all for you. Based on the conversations we’ve had so far, I think a lot of the efficiency gains come from fairly low-level work. This includes proofreading and checking definitions, conducting legal research, confirming legal research content, and organizing language before issuing a contract. I think that’s probably the biggest victory. I don’t think we’re seeing significant cost efficiencies and savings yet where in-house legal team budgets actually go.
What is Avantia’s general pitch and advertised cost savings?
Our clients value speed above all else, so we save time creating documents. Right now, our toolkit is at the point where at the top end, like NDA, we’re increasing margins on NDA contracts by about 48%. This will give you a sense of scale. This technology increases efficiency by approximately 50%.
Do you think that over time, big companies will stop doing NDAs and other lower level work?
If we assume that AI is going to start to significantly improve efficiency, we should start taking more of the mundane parts that traditional law firms used to do themselves. And we push that high-value partner model into strategic advice. It pushes them further into that complex legal layer instead of trying to fight companies like us on the day-to-day layer. We’re starting to see that. We currently have several work streams where our clients are taking work from one of the top 50 law firms and bringing it to us.
How are Avantia’s lawyers leveraging AI? Are they all trained on the tools, or is there a separate (perhaps junior) staff member responsible for the AI aspects?
We strongly disagree with that model. Our technology is built into (Microsoft) Outlook. So we want our technology to be where our employees are. It exists as a plugin in Outlook and it also exists in Word, and the two communicate with each other. So when you do something in Outlook, that Word version knows what’s been done. And technology interacts through natural language. you talk to it. It’s a bit like a chatbot. You interact with it by asking it to do something for you. In some cases, the workflow is AI-driven. Please mark up this NDA. In some cases, the workflow is just engineering and the intake system must decide which workflow to perform. For example, a common response is, “Please execute these two contract redlines.” There is no AI there. The only thing in the question is AI. And it recognizes the workflows that it knows how to run. This is just an engineering workflow to redline, but it saved us time. We strongly oppose senior lawyers simply relying on paralegals to do their work. The big efficiency gain we found was in upskilling junior staff. If we could make a paralegal’s fee unit about 25% (if not less) of a lawyer’s fee unit, we could improve that paralegal’s skills and do the work that senior lawyers would do through their agents. You can do more. Using the toolkit, we’ve actually found this to be one of the biggest efficiency gains you can get to date.
Do your customers want to know more about where your efficiency comes from?
It’s a mix. This is not part of the regular demo, but it will explain exactly what it does and how to use it. Customers just want their problems resolved. That’s the best. They don’t care how you’re doing. One of the things I like about them is that they invest in technology and enabling technology. This allows our customers to say, “Hey, we’re using AI, we’re looking into this, but you don’t have to go through the entire adoption experience.” We’ve sort of solved the adoption problem; Solving the problem. But in reality, all they care about is, “Can you fix this problem, how much will it cost, and how fast can you fix it?”
What keeps you up at night?
ChatGPT 5 was released in December, and will the upcoming large language model rounds catch up to what we’re now able to do on a more concrete basis using contracts? Without investing in the technology at all? Immediately improve your law firm skills and quickly find yourself on equal footing with us. It’s like a big existential question that we have to be satisfied with. There are many reasons why we don’t think that will happen, but we intend to continue to stay ahead of the curve.
