The legal industry is undergoing a significant transformation, with artificial intelligence (AI) playing an increasingly important role in casework. According to a recent poll by legaltech company Clio, a staggering 79% of law firms used some form of AI for casework in 2024, up from just 19% in 2023. This growing adoption of AI is driving innovation in the legaltech sector, with companies like SpotDraft raising significant funds to fuel their growth.

SpotDraft, a contract automation and management software provider, is one such company that is capitalizing on the trend. Founded in 2017, SpotDraft's platform uses AI to extract key details and clauses from contracts, providing summaries of changes and suggested follow-up work. The company's CEO, Shashank Bijapur, credits his experience as an associate at Bengaluru-based law firm White & Case for the idea behind SpotDraft, which aims to simplify contracting tasks for in-house legal teams.

SpotDraft's platform boasts several AI-powered features, including VerifAI, which reviews contracts against a selected guide or template, and ClickThrough, a centralized repository for contract agreements that enables search and reporting capabilities. The company's innovative approach has resonated with clients, with SpotDraft currently serving around 400 customers and achieving a 169% year-over-year revenue growth in 2024.

The legaltech sector as a whole is experiencing a surge in investment, with VC funding reaching $2.6 billion in 2024, up from less than $1 billion invested in 2023, according to Pitchbook. This influx of funds is likely driven by the growing demand for AI-powered legal solutions, as well as the potential for cost savings and efficiency gains. In-house counsel, in particular, are showing interest in AI, with nearly half of attorneys believing that AI can yield cost savings for their departments.

SpotDraft's recent $54 million Series B funding round, led by Vertex Ventures Singapore with participation from Trident Partners, brings the company's total raised to over $80 million. The new capital will be invested in research and development, market expansion, and growing SpotDraft's 250-person workforce across New York and Bengaluru.

Bijapur revealed that SpotDraft is developing an "agentic solution" to help in-house counsel achieve strategic business outcomes, although he declined to provide further details. The solution is expected to interact with other tools used by in-house teams, reducing the time spent on learning and configuring tools and allowing teams to focus on strategic work.

The growing adoption of AI in the legal industry is likely to have significant implications for the sector as a whole. As legaltech providers like SpotDraft continue to innovate and push the boundaries of what is possible with AI, we can expect to see even more widespread adoption of these technologies in the years to come.

With 2025 shaping up to be an inflection point for SpotDraft, the company's commitment to deepening the use of AI in its product is likely to drive further innovation and growth in the legaltech sector. As the industry continues to evolve, it will be interesting to see how AI-powered solutions like SpotDraft's will shape the future of legal work.