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Brightflag, an AI-powered legal spend management startup, today announced a $28 million round. The company says it will put the funds toward expanding its footprint while bolstering R&D to support existing customers.

According to a recent Gartner survey, the share of corporate legal operations leaders responsible for coordinating law firm billing and tracking outside counsel spend increased in the past two years by 53% and 32% percent, respectively. According to one report, the global legal operations software market will reach $3.57 billion by 2027, growing from just $1.08 billion in 2018.

Brightflag, which claims to manage “millions” in external legal spend, offers an AI platform to streamline legal bill review, legal matter management, and other related processes. (Matter management refers to activities involving managing aspects of the corporate legal practice.) The company’s suite lets customers view budget progress and spot savings with real-time analytics. Using Brightflag, managers can compare historic matters to set appropriate budgets. Historical data can also be used to separate large and specialized matters from ongoing work and inform annual budgets.

Beyond this, Brightflag taps big data and machine learning to predict how much spend is likely to be incurred under a budget, notifying invoice reviewers when spend exceeds a set budget percentage. Algorithms transform line item descriptions into a structured dataset that is summarized across multiple dimensions, including user-defined custom attributes. Invoices that would cause a budget overrun are automatically adjusted down or rejected for correction.


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Brightflag’s AI also creates a summary of which timekeepers did what work so reviewers can validate proposed charges. This feature can be configured to reject and approve invoices without human involvement to reduce administrative work, according to Brightflag.

The company aims to capture a range of quantitative and qualitative data points to spotlight legal vendors that deliver superior advice and value. To this end, the company’s platform prevents vendors from charging for unknown timekeepers and unapproved rates and logs and routes timekeepers and requests for approval before they’re allowed to take effect. Using data on compliance with budgets, law firm billing guidelines, and accruals processes, Brightflag makes recommendations for operating performance, volume discounts, and more. And it sends approved vendor invoices directly, enabling a “seamless” posting and payment process while preserving integrations with service desk software, insurance and intellectual property claims management solutions, legal hold software systems, and others.

Brightflag says despite the pandemic, it managed to almost double its annual recurring revenue in the past year. The company claims its platform is now used by thousands of vendors worldwide, including companies like Uber, Shopify, Volvo, and Dropbox. “For the second time in the last 15 years, companies are grappling with the legal and financial implications of a global recession,” cofounder and CEO Ian Nolan told VentureBeat via email. “Brightflag is providing corporate legal departments with unparalleled visibility into their operations as they work to maximize the strategic value of their spending.”

One Peak led the investment in Brightflag announced today, with participation from existing investors Sands Capital Ventures and Frontline Ventures. Dublin, Ireland-based Brightflag, which was founded in 2014, says it intends to hire approximately 60 new employees between its U.S. and international teams over the next year. The company’s total raised stands at nearly $40 million.

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