Jen Berrent helped WeWork navigate the bushes of leases and lawsuits. Now she's using artificial intelligence to suck up big legal gravy trains and build a new kind of law firm.
Founded by two former general counsels and backed by $4 million in venture funding, Covenant bets that the private market is ready for a software-first approach to legal advice. The tool uses a large language model to root hundreds of pages of legal documents, raise the red flag, and propose stronger terms tailored to the investors' own playbooks.
In the world of venture capital and other private funding, investors still pay law firms to tell them where and how to park their money. Allocators of donations, pensions and other institutions rely on Whiteshaw to review the limited partner agreements (LPAs), the legal backbone of private investment funds. In theory, the bigger the law firm, the better the insights are as they have seen more transactions. However, fame is not cheap and there is no billable time.
Covenant sells directly to institutional investors rather than law firms, and hopes to cut clients and their revenues straight away.
Just as Turbotax has made many Americans question whether they really need an accountant, Covenent aims to give private market investors a reason to ask whether Big Law's bills are still worth it.
The company tells Business Insider that it has raised $4 million in a seed round led by Flybridge Capital Partners, with former journalist and hedge fund manager Neil Barsky.
The Covenant is led by Jen Berrent, former Chief Operating Officer and Chief Legal Officer of WeWork, and Richard Perris, a former advisor to Private Market Manager CVC. contract
Redo
Through late Aughts, Berrent was Wework's Chief Legal Officer and Co-Chairman, where he walked one of the trickiest tightropes in corporate law. In 2019, a former employee told Business Insider that Berrent was the one who tamed Chaos and protected the company as a crisis after the crisis unfolded.
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She left WeWork in 2020. Initially, Berrent set out to build a tool to help founders negotiate legal contracts. However, she and Covenant co-founder and president Richard Perris found opportunities limited. Term sheets, letter provisions, and non-disclosure agreements are relatively short, standardized and not very complicated.
According to Perris, greater pain lives in private fund documents: LPAs and side letters carve out specific terms for specific investors. Their high stakes require expensive lawyer time. It states that large-scale language models could “get into this issue and crush it.”
But before Covenant had the product or revenue, Flybridge “betted on Jen,” says Jesse Middleton.
Over the past 18 months, Velent says the Covenant has brought about around 45 clients, including donations, foundations, pension plans, funds and sovereign wealth funds.
She rejected the client's name, but says that monthly trading volume has increased by 50% since January.
Law Firm 2.0
The contract is part of a new wave of law firms with tiered legal services like skeletons and organizations of high-tech companies. Venture capitalist Zach Posner, who called Legal Tech Boom correctly in 2019, calls out law firms 2.0 in this category. His fund is launching an accelerator to support businesses that compete head-on with law firms.
Zach Abramowitz, a consultant who advises law firms and legal departments that buy software, says he expects star's lawyers to see him peeling off from the big corporations and launching his own technical response practices.
For Abramowitz, the real advantage is not to build the next legal technology unicorn like Harvey or Ironclad. It's in the long tail – what he describes as the Shopify stage of legal technology. Just as Amazon and Shopify unlocked the waves of entrepreneurs who built their stores on top of these platforms, Abramowitz believes that artificial intelligence will allow for a surge in “bionic boutiques” where artificial intelligence can generate quite a lot of revenue per lawyer.
“It's a much bigger opportunity,” he said.
Covenant joins the growth list of software companies with large backers and promises to strip legal work of even bigger promises. But the tweets of the legal technology bubble have grown, especially as flashy tools like Harvey and Legola Jockeys due to their relevance in still beneficial markets.
For now, Covenant is not directly competing with platforms sold to law firms and corporate legal departments. Instead, it occupies a lane closer to contract review tools such as Luminance and Spellbook, which are built for lawyers rather than private market investors. For Berrent, the key distinction is that Covenant usually sells legal services to customers who hire large laws to do this work.
Velent says they are seeing the next big opportunity, not AI for Law firms, but completely new companies, are built around technology. This is called a counsel service.
“Uber didn't sell the software to taxi companies,” she said. Instead, they redefine how people think about getting from point A to B. That's the kind of shift she wants.
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