Today, alternative legal service provider Exigent launched Bright Minds Capital Partners, an evergreen fund for legal tech companies, with the aim of connecting startups with funding, industry expertise and clients.

To be sure, venture capitalists and law firms are already investing in legal tech companies, but Exigent co-founder and CEO David Holme said startups have been mostly “ill served” by those entities.

He added that law firms' risk aversion and the possibility of a legal tech startup being teamed up with a venture capitalist with no background in legal tech does a disservice to those nascent companies looking for funding.

Holme noted that while legal tech investments are up, tech adoption by lawyers is low. Key to making products that are profitable is understanding what clients need, he said. “If you sat in the ecosystem and listened to venture capitalists and not customers, you will be part of the roadkill.”

Given its 15 years providing legal tech solutions, ranging from outside counsel spend analytics software to manual contract review, Holme argued that Exigent provides the experience, client access and capital essential for a growing legal tech company.

Additionally, Holme noted that Bright Minds Capital Partners' evergreen funding structure places less pressure on startups to quickly materialize return on investments.

Evergreen funding gradually provides funding to a company on a scheduled basis or by request of the investment team. As a cornerstone investor, Exigent and other companies agree to subscribe for a certain amount of shares in the startup. Holme declined to detail who the other investors are, but said they would represent various industries. 

Holme explained that Bright Minds Capital Partners was launched because of the uptick in legal tech investments and what he saw as the blurring line between legal and finance tech. While tech platforms that receive funding from Bright Minds Capital Partners can be rooted in legal technology, Holme said their functionality should also be applicable to other industries. 

“Clients experiencing the digitization of information means the barrier between legal tech and finance tech is fracturing because its data [is] common. The silo between companies is becoming less pronounced. We want to have technology that is more broader than legal, that's where I think the demand is growing.”

Holme also noted that Bright Minds Capital Partners will pitch startups' software to Exigent clients and their investor subscribers for co-investment opportunities and to test the product and elicit feedback. 

Exigent's launch into the legal tech funding arena comes after multiple legal tech investments were made in June, including alternative legal service provider Elevate raising $25 million, practice management software platform Litify securing $10 million and Onna announcing an $11 million investment. 

What's more, as Exigent expands from offering alternative legal services into tech investments, other players are stepping into its market. For instance, Eversheds Sutherland last week became the latest international law firm to create an alternative legal service provider, which it hopes will bring in $127 million in annual revenue.