SpotDraft makes AI legal with simple and efficient contracts
SpotDraft is an AI-based contract management and creation system started by a Harvard Law School alumnus and a Carnegie Melon alumnus. The platform aims to simplify contract creation and management through lawyer-vetted templates.
At a glance
Founders: Shashank Bijapur and Madhav Bhagat
Founded in: 2017
Based out of: Gurgaon
Problem it solves: Contract creation and management
The law, they say, is for all, but its finer intricacies and nuances, clearly not.
An entrepreneur, most likely, would focus on the big idea, its ability to scale, the target audience, the revenue model and funding avenues. Easy to assume then that writing contracts is not very high on the priority list, also given that it can be time-consuming and even confusing.
Harvard Law School alumnus and Wall Street lawyer Shashank Bijapur found contract work intellectually rewarding but the 31-year-old, at times, felt that the task of copying old contracts to make new ones was cumbersome. Carnegie Mellon alumnus Madhav Bhagat also found contracts daunting, and a pain point for his businessman father.
Shashank and Madhav met in New York and realised they could address their respective interest and pain point at the same time. They sought to do something that involved technology and its ability to reduce the burden on businesses.
The two started SpotDraft,, an Artificial Intelligence-based contract management and creation system, in 2017. “We knew that with the integration of Artificial Intelligence programmes with such clerical tasks, people could utilise their time better to perform tasks that added more value,” says Shashank.
What does it do?
SpotDraft provides users with lawyer-vetted templates that can be filled out in less than a minute. Once a contract is created, the platform automatically creates invoices, payment reminders, and tracks payments as they become due.
The platform offers contract creation, which helps draft a contract, contract analysis, which analyses contents and helps understand its elements, and finally, contract management, which helps understanding the business aspects of a legal document and putting it into action.
A user can also upload existing contracts. The proprietary AI software analyses the contract to point out important missing clauses, summarises key terms, and classifies the good, bad, and ugly clauses to give better understanding and negotiation power.
“Our AI creates a smart inbox of all the contracts and notifies the user on the important actions, such as regulatory filings, upcoming deadlines etc., which one might need to take. The inbox also connects your contract to external data sources to notify you of breaches or changes in law,” says Shashank.
SpotDraft connects different parts of a legal document into one simple workflow with zero human intervention. This saves direct legal costs, and losses due to bad negotiation or drafting.
Currently, the startup has a team of eight people.
The first challenge of building the platform was to simplify the legal process, leverage technology, and ensure contracts were legally binding.
The legal fraternity is known for its low-tech processes, so getting users to actually use the product was tough at first. However, for SpotDraft, it was easier to adopt technology as it worked from within the industry, and also as the team approached freelancers and entrepreneurs with its do-it-yourself models.
Contract execution on the platform is free of cost. For other services like contract management system and contract creation, SporDraft has a freemium business model, and charges users based on the frequency of the usage of the service.
Costs range from Rs 799 per user per month for smaller businesses to Rs 1,499 per user per month for larger businesses. At the beginning of this year, the team claims to have executed over 6,000 contracts with a total value exceeding $750,000.
The legal sector
Having jumped on the technology bandwagon over a decade ago, legal tech startups haven’t taken the spotlight yet, nor have they raised much funding. According to venture capitalist database CB Insights, legal tech startups have raised over $700 million in funding since 2011. The number hasn’t really grown in proportion to the dollar value opportunity in the industry, perhaps given the complexities of the regulated sector.
Legal startups in the country include Advo8, VakilSearch, NearLaw, Lawyered, and Legal Desk.
Speaking on how SpotDraft is different, Shashank says existing solutions don’t address the problem of high cost and time required with legal matters. They also do not provide any help in managing or operating on contracts.
He, however, does mention international players like Cognitive+, Ravn Systems, Begal.ai and Kira Systems are doing substantial work.
“We plan to target the MSME (Medium and Small Enterprises) sector and the freelance market to start off, and then move to larger players.”
SpotDraft is also working on a contract creator system where users can create their own customised contracts in addition to using the standardised contract templates. The team aims to develop and perfect the systems for the needs of the Indian market.
SpotDraft raised a seed round of funding of $550,000 led by Hunch Ventures. The other investors are Spiral Ventures, 500 startups, Singapore Angel Network and Satyen Kothari, CEO of Cube and founder of Citrus Payments.
The team aims to use the funding to hire talent, scale technology and also acquire more users.
“Once we have dominated the Indian market, we plan to train our focus on the Southeast Asian markets. Our final goal is to move westwards, towards North American and the English-speaking European markets in the next 18-24 months,” concludes Shashank.