Startup Athena raises $2.5M in pre-seed funding to revamp the revenue model for legal AI – SiliconANGLE

Athena Circle Corp., an artificial intelligence-native legal technology startup that’s automating the nitty gritty of commercial real estate deals, said today it has raised $2.5 million in pre-seed funding.

The round was led by Andreessen Horowitz’s accelerator program, a16z Speedrun. No other investors were named.

Legal AI technology is nothing new, but its adoption in the industry has been somewhat haphazard, for the technology has exposed an awkward problem: Most law firms are still billing their clients by the hour, and that makes automation less lucrative. If a law firm can use AI agents to get a 10-hour contract review done in just a couple of minutes, then it’s going to let an awful lot of billable revenue slip through its fingers, killing any incentive there might be to adopt them.

Athena’s co-founders Cem Ucan (pictured, left) and Kieran John Keenan (right) and founding engineer José Braz all cut their teeth at the pioneering legal AI tech startup Legora AB, where they quickly realized how AI conflicts with the industry’s standard business model. They came up with an entirely different business model to convince legal firms of the benefits of automation. Instead of selling software tools directly, it provides a legal service through its affiliated law firm, charging a fixed fee per transaction that’s typically 30% to 50% lower than standard rates. In this way, it ensures that revenue is better aligned with efficiency.

“Most legal AI companies sell tools to traditional law firms, but we took a different approach,” Ucan said. “Our AI works hand-in-hand with a law firm designed around it from day one, with experienced attorneys focused on the judgment and negotiation that actually move deals forward.”

The startup is focused on automating the intricacies of commercial real estate acquisitions, sales and financing. Its AI agents are designed to automate the creation and review of purchase agreements and loan documents, and will handle all of the due diligence and administrative closing hurdles needed to get deals done, while ensuring human lawyers remain fully in the loop to make all of the final legal determinations.

In this way, Athena basically takes care of the grunt work, giving commercial real estate firms much more agility. That’s a real advantage, because commercial real estate is an industry where speed is of the essence: The faster a law firm gets things done, the more likely it is to actually secure the deal, which is the end result that everyone wants. With investors often submitting dozens of bids for each property listing, the ability to get the paperwork done in a matter of hours rather than weeks or days means buyers can lock in a deal before their rivals know what’s happened.

Keenan, who serves as the startup’s chief technology officer, explained that each new workflow begins with an incoming agreement that’s ingested by its AI agents. They cross-reference the terms of the deal against their standard deal sheets in order to flag inconsistencies, prepare redlines and draft client communications.

This work is informed by historical transactions, which allow its agents to adapt to each client’s negotiating style, Keenan said. Human attorneys then review this work, make strategic judgment calls when required, and approve all deliverables before they’re sent to clients.

“I measure our progress by how quickly an attorney can review an AI agent’s work and confidently stand behind it,” Keenan explained. “A draft produced in minutes can still leave a lawyer with hours of work. Making that review more efficient is how our platform helps us deliver faster legal services with the quality clients expect.”

Athena’s agents are already proving their worth, with the startup having signed up 22 legal firms as clients so far, just two months after launching its service. By learning continuously from attorney’s edits and client’s preferences, its agents have reduced review times by an average of 70%.

L. Miguel Arce, chief executive of the Texas-based multifamily real estate and property management firm Mox Living, said Athena was able to deliver a complete purchase agreement in less than 48 hours, the fastest turnaround he has ever seen. “A lot of firms in our industry have an AI task force in name only,” he said. “What stood out about Athena is that the system learns from every deal, from what the attorneys change to what we prefer. Speed only matters if it’s quality work, and Athena gets us both.”

Keenan said Athena is primed to strike while the iron is hot. He said the industry is bracing itself for a wave of new commercial deals as properties financed through short-term loans in 2021 and 2022 hit their refinancing deadlines, and he’s hoping that the startup can win a significant amount of that business. In any case, growth is on the horizon, for Athena also plans to expand into new markets and property classes and even new legal domains.

A16z Speedrun’s Troy Kirwin said AI automation is all well and good, but clients still demand to speak to a human who can take responsibility for the work that gets done. “Athena is building around that need with a system that can improve through real legal work and a team that’s obsessed with scaling fast,” he said.

Photo: Athena