Startup Funder Funds Legal Startup for Startups
Y Combinator, the Silicon Valley tech incubator, is getting into the legal tech industry. YC, which made its name providing initial funding to tech companies like AirBnB, Dropbox, and Reddit, is currently funding the legal tech startup Ironclad.
Ironclad, part automated forms company, part contract management system, part productivity app, is focused on the legal needs of startups themselves, looking to help startup companies avoid some of the cost and inefficiency of the traditional legal system.
Focus on Efficiency
Ironclad describes itself as a "software layer for corporate legal." The company creates draft legal documents, creates a shared Dropbox folder for corporate legal documents, and connects parties through YC-backed HelloSign, an e-signature company. If that's not enough Y Combinator incest, Ironclad's initial customers are also coming largely from the 200 some YC startups, according to Above the Law.
If a user needs a non-disclosure agreement, for example, he can go to Ironclad, fill out basic information and Ironclad will create a draft NDA and toss it in the company's Dropbox. Ironclad users can then approve the document or fiddle with it. When it's ready, Ironclad sends it out through HelloSign to be executed.
Legal Assistant or Lawyer Replacement?
Ironclad's founders aren't outsiders to tech or the law. Jason Boehmig was previously with the startup practice at Fenwick & West. Ironclad co-founder, Cai GoGwilt, was formerly an engineer with Palantir, the startup "unicorn" and data weaponization company.
Right now, it appears that Ironclad's templates are limited. The company offers NDAs, Sales Agreements, and Contractor Agreements for users of its basic service, but says that it can automate existing documents for high-paying customers.
Users should think twice about simply taking the draft documents as-is. As Ironclad notes, the templates are "usually used by Delaware C-Corporations operating in California," but should be carefully reviewed by a company's lawyer. The idea is to make legal work more organized and automated, the startup says, and not to replace lawyers.
Indeed, Ironclad might be better seen as a productivity app for startup counsel, rather than an alternative legal services company. Who knows if users will actually treat it as such, though. We can imagine many young companies simply taking Ironclad's default offerings and skipping the outside legal consultation altogether.
Related Resources:
- The 4 Startups Changing The Legal Landscape (Inc. Magazine)
- Will This Startup Change Legal Billing or Incite More Disputes? (FindLaw's Technologist)
- We (Lawyers) Just Got Replaced By a Contract-Drafting App (FindLaw's Technologist)
- Law and Video Games: Teaching Tool, Being Cool (FindLaw's Technologist)