Bodhala, a data-intelligence and legal technology platform, has secured USD10 million in an investment round led by Edison Partners, a Princeton, NJ-based growth capital firm.
The company will use the funds for product expansion and sales and market acceleration as it transforms and modernises the purchasing of outside counsel services.
Companies spend nearly USD500 billion annually on outside counsel, with hourly billing rates tracking at almost four times the rate of inflation. Bodhala applies data science, machine learning and AI-driven insights to help companies analyse, interpret and optimise legal spend. The company experienced 300-pls per cent growth in both revenue and headcount in 2019 and is on pace to do the same in 2020. Bodhala also saw significant client growth in the last 12 months across each of its key verticals including financial services, healthcare services, insurance, energy and private equity.
“The legal industry is a non-functioning market where law firms have had full control, leaving in-house counsel at the mercy of ever-increasing fees from their counsel without the leverage the ‘buy-side’ deserves to have,” says Raj Goyle, co-founder and CEO of Bodhala. “Our mission is to bring a market-driven economy to the legal industry—one where visibility and fair competition lead to the selection of the right lawyer at the right law firm at the right price. The groundbreaking platform we have built is uniquely positioned to address this issue and through our partnership with Dan and the Edison team, we will be able to continue to drive real and meaningful change in this market.”
“With Bodhala, internal legal departments are able to direct work to the right outside lawyers, consistent with but not exclusively based on relationships, and then guide the work more appropriately to manage legal risk, outcome and cost. During the Covid-19 pandemic, this has become even more important, as clients consume Bodhala data to hedge the risk of being overly reliant on too few relationship law firms or partners,” says Ketan Jhaveri, co-founder and president of Bodhala.
Bodhala data shows the top-15-by-revenue firm street rates went from under USD700 in 2000 to more than USD1,650 per hour today. Average equity-partner profits at the top US 100 firms have doubled since 2004 to USD1.88 million in 2018, according to American Lawyer, with eight firms averaging more than USD4 million. General counsel and procurement leaders are looking for more transparency into their legal costs and performance, and a method to shift spending towards their optimal panel firms.
“Bodhala co-founders Raj and Ketan developed the first modern platform to bring data-intelligence, let alone real-world economics, to the legal services spend of large and enterprise firms,” says Daniel Herscovici, partner, Edison Partners, who led the investment. “Analysts estimate AI-driven legal technology will be a USD37 billion business by 2026, and the Bodhala SaaS platform delivers the insights general counsel and claims officers need to make meaningful decisions about their budgets, while still producing equal or better legal outcomes.”
Herscovici will join Bodhala’s board of directors.
“Bodhala is at the centre of a rapidly changing legal system marked by the emergence of legal operations as a profession, the changing economic models of law firms, and the rise of new technologies. Relationships are no longer the sole proxy for evaluating the value that a law firm brings to its clients. We’re creating a clear win for everyone involved in our modern legal system, from corporate legal departments to law firms to alternative service providers,” adds Goyle.
