Legal tech startup Everlaw raises $8.1 million, led by Andreessen Horowitz

Everlaw, a startup with a cloud service that law firms can use to store documents and make them easily searchable and accessible, is today announcing an $8.1 million funding round led by Andreessen Horowitz.

Lots of e-discovery tools are available for law firms to choose from, but Everlaw stands out partly because it’s cloud-based, and partly because it calls on artificial intelligence to help people do their work. Plus, Everlaw comes with data visualization tools, activity tracking, messaging, and a Story Builder to assist in the creation of narratives. Now, Everlaw founder and CEO AJ Shankar wants to further improve several aspects of the tool, including its AI.

“This is an incredible hard problem where, if you can solve it better than they solve it now, you win,” Shankar told VentureBeat in an interview.

This is an example of a vertical-specific software-as-a-service (SaaS) tool that has the potential to challenge incumbents who sell on-premises software that runs inside law firms’ data centers. Veeva Systems has risen to prominence in the health care industry, and Fleetmatics has done something similar for fleet management in the transportation sector. As Everlaw seeks to become a major player in the legal world, it can now do so with backing from a prominent venture capital firm.

Other legal technology startups include Clio, Judicata, Ravel, Rocket Lawyer, and UpCounsel.

Having spent plenty of time wrapped up in court cases, some of Andreessen Horowitz’s investors were painfully familiar with the challenges of working with legal documents. “We had all this first-hand knowledge sitting in rooms literally floor to ceiling with boxes of documents with dates on them,” board partner Steven Sinofsky told VentureBeat. And it helped that Shankar has a technical background — he’s a former IBM software engineer with a Ph.D. in computer science from the University of California, Berkeley — and was building up a formidable team of computer scientists, Sinofsky said.

Everlaw (formerly known as EasyESI) got its start in 2011 in Shankar’s bedroom and now has a team of 22, with headquarters in Berkeley, California. K9 Ventures is another backer, in addition to Andreessen Horowitz and others.

Around 50 law firms and government entities currently use Everlaw, Shankar said. Companies pay based on how many gigabytes of data are stored on the service. “The more you store, the cheaper it gets,” he explained.

A blog post has more detail on the news.