Meet your AI-powered legal assistant

The appetite for artificial intelligence continues to boom. When Spellbook released the latest version of their AI-powered legal assistant free of charge to law schools, 56 law schools from across U.S. and Canada reached out to the generative AI legal startup for a chance to try out the new product. 
 
Spellbook is the latest star in the Canadian legal tech market. The company recently raised more than $10 million in funding, and its document review product Reviews has generated a waitlist of over 40,000 lawyers. As it works to scale the business, Spellbook faces a rapidly changing market that will surely see some startups shut down. Its story is a reminder of the breakneck speed of technological innovation and how even lawyers can quickly embrace it.  
 
"We're trying to build something as impactful as we possibly can," says Scott Stevenson, co-founder and CEO of Spellbook. "There are a lot of disillusioned lawyers who loathe their jobs. We want to help lawyers provide quality, efficient legal services."
 
In five short years, Spellbook has come a long way. Stevenson and co-founders Daniel Di Maria and Matthew began working in generative AI in 2019 and focused on how to make technology more effective and initiative for lawyers. They have more than 1,000 clients and hope to double that figure before the end of the year.
 
During the spring, the company secured $10.9 million in funding from investors, which included Thomson Reuters Ventures, The LegalTech Fund, Inovia Capital (a Canadian-based investment fund), and Moxxie Ventures. The funding is earmarked for expanding the company's workforce from 20 employees to 40. Stevenson highlights the need for various roles, spanning human resources, marketing, and strengthening the sales force.
 
"We wanted to stay lean and find real product-market fit," says Stevenson. "Investors were asking why we weren't hiring more people. It took time, but we were able to find true resonance with our product and have rapid growth. It's a high bar."
 
Access to capital for startups is becoming a concern. As interest rates rise, venture capital firms are more hesitant to invest substantially in startup ventures.
 
"There was a lot of cash in startups because of low interest rates and companies getting funded when they probably shouldn't have," says Stevenson. "Some companies were scaling and hiring 50 people when product-market fit was not there."
 
Earlier this year, Spellbook launched Reviews, a novel feature that allows the program to annotate contracts, offer risk-related suggestions, and implement changes tailored to the jurisdiction. Users can upload their existing templates using Microsoft Word. The program also includes a tool that simplifies explanations of clauses and phrases in plain language.

Brittany Ratelle is eager to integrate AI in her practice. In her solo law firm, she represents tech savvy entrepreneurs and content creators. After seeing an ad on Facebook, she purchased Spellbook earlier this year.
 
"I love the explain tool because I explain what I changed and why I changed it," says Ratelle. "I want clients to have a better understanding so they can have conversations earlier with sponsors about what they can and can't do, such as not doing full licensing rights or giving exclusivity for a sector."

KMSC law, another Spellbook customer, is well positioned to leverage technology. The mid size law firm based in Grand Prairie began making changes before the pandemic. They accommodated staff with flexible work hours and established remote work opportunities for those relocating outside the Grand Prairie area. "When Covid hit, we had infrastructure in place to deal with remote work," says Todd Strang, a partner at KMSC Law who manages IT at the firm.

The firm also uses other Canadian tech tools, such as Dealcloser for document production and Athennian for document automation. "If directors and shareholders of an organization are the same each year, then we can automate those documents," says Strang. "We also hired coders to automate more of the process. It's about volume and being efficient." 
 
Strang came across Spellbook on social media in 2022 and reached out. Within a few weeks, his firm was onboarded and began using Spellbook to review complex contracts and create content.
 
"We want to be early adopters of technology," says Strang. "We develop the process and culture early on with tech companies. That way, when competitors come, they're already six months behind."
 
Client expectations a a key motivator for staying abreast of AI developments. Strang frequently gets inquiries about the firm's use of AI and its specific applications. "We have constant pressure to perform quickly," he says.
 
Strang is eager to explore other tools like Microsoft Bing AI but remains concerned about privacy and security. Several lawsuits are pending in the U.S. on whether companies like OpenAI, Google and Microsoft are guilty of copyright infringement in using data to make their tools smarter. Spellbook uses a mix of generative AI tools from OpenAI, Anthropic, and Canadian AI startup Cohere. While these issues are still being worked out, Stevenson and his team hope to be in the right position to stay standing.
 
"It's hard to build something people truly love," says Stevenson. "But it's fun. We're very proud of everyone on our team, and we're motivated to keep going."