Raj Goyle, Co-CEO of Bodhala. Raj Goyle, co-founder of Bodhala.

A rocky economy hasn't stopped all legal tech investments. Legal spend analytics platform Bodhala announced Tuesday it raised $10 million in Series A funding, with Edison Partners leading the funding round.

Launched in 2017, Bodhala leverages Big Data to analyze how much a corporation should pay for a legal matter. It's powered by its data set called Hercules, which was updated in 2018 with a law firm ranking feature and the ability to forecast how a proposed rate increase could impact budgets.

CEO and co-founder Raj Goyle said the $10 million raised will be used to enhance Hercules to add more data and algorithms to improve the insights and benchmarking provided.

The funding will also be used to improve marketing and sales to grow the company's client base and data sets. More clients means more in-house data Bodhala can leverage to strengthen its legal service-pricing artificial intelligence.

Corporate legal departments want more benchmarking, a trend that is only intensifying as economic uncertainty grows, Goyle noted.

"There really is a burning desire for corporate legal departments to finally run their departments like a business, and the COVID crisis has exacerbated and quickened what was already happening," Goyle explained.

He also noted corporations are closely evaluating alternative legal service providers (ALSPs) as well.

"We are seeing more requests from clients to help allocate that work they get pitched constantly," he said. He added that Bodhala is "sitting in the middle. We have all their data and are able to analyze all that; [it's] a commanding [position] where we can sit across all the spend of an enterprise."

Even when providing deep insights, Goyle acknowledged legal tech software purchases aren't immune from closer evaluation during a recession, too. But he said he welcomed the extra attention.

"Our potential clients and current clients are going to see that they can finally achieve a level of optimization in a spend category and behavior they haven't been able to achieve before," he said. "We welcome the additional scrutiny."

Legal tech companies are not only encountering more tepid buyers, but also hesitant investors. However, Edison Partners partner Daniel Herscovici said the growth equity investment firm started building a relationship with Bodhala in summer 2019. Eventually the investment firm, which previously invested in cybersecurity company eSentire, felt confident in Bodhala's growth potential. "We've known the company for some time, we were comfortable investing in the midst of the current environment," Herscovici said.

He added that during rocky economic times, there are some categories of companies that are "interesting" to invest in.

"It's not just about reducing spending but optimizing your spend and getting the same great outcomes in many cases with the same counsel," he said of Bodhala. "We think this category will do quite well in an environment where people still desperately need legal counsel for issues that may occur in a recession" but are looking to spend less.