A senior lawyer who helped orchestrate the merger between Allen & Overy and Shearman & Sterling has co-founded a 'native AI' law firm for European small and medium-sized businesses.
Wim Dejonghe, a former global senior partner at legacy Allen & Overy, has joined with technology entrepreneurs behind Belgium HR start-up Mbrella and a former Freshfields lawyer to co-found Falcon, which is backed by €1.5m of pre-seed funding.
Falcon will review six commercial contracts per month − including non-disclosure and data-processing agreements − for €1,000. Outsourcing similar work to a traditional law firm would cost €3,000-€4,000 and take days or weeks, according to Falcon.
Falcon clients submit contracts through apps such as Slack or Microsoft Teams. Every contract review will be signed off by a qualified lawyer and returned the same day, the firm said.
The firm also builds its own AI tools on top of general-purpose AI models including Claude and ChatGPT. Its launch reflects growth in the new market of so-called 'AI native' law firms − legaltech start-ups powered largely by artificial intelligence.
Such firms, which are built from the ground up using AI, are attracting an increasing amount of investor funding. They claim that they can provide clients with better value than traditional law firms by offering a new business model.
In an interview with Global Legal Post, Dejonghe said that the hourly-billing model favoured by traditional law firms was too expensive for many small and medium-sized businesses and often an inefficient way of working.
“You basically pass on inefficiencies to the client, and I think that really needs to change and will change … with AI,” he said.
Clients want to benefit from the efficiencies of AI, which can complete routine legal tasks far faster than a lawyer, but still have “the judgment of a lawyer” reviewing AI output, he added.
Although Falcon is targeting SMEs, it believes that larger companies with their own legal departments and fast-growing start-ups may also use it as an alternative legal service provider.
Clients may view Falcon as a member of the in-house legal team, said Dejonghe. “Rather than paying a salary, you pay a subscription, and you can see Falcon as a key member of the legal department.”
The firm is currently talking to people in London, Paris and Amsterdam about joining the firm as “founding lawyers”, said co-founder Rémy Bonnaffé, an ex-Freshfields lawyer.
New clients have an initial 45-minute call with Falcon to help Falcon understand the client’s business and any legal risks they face.
Loop Earplugs, a Belgian consumer brand, is an early customer.
Falcon will begin operations in Belgium but plans to expand in Europe, including the UK.
Falcon's €1.5m of pre-seed funding was led by Syndicate One. The other investors were Stelena Capital, Greenpark Investment Partners, RDY Ventures and France's Source Ventures. The funding closed in July.
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