Exclusive: Legal tech startup Rocket Lawyer raises $223 million for expansion
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Online legal service Rocket Lawyer has raised $223 million of financing from an investor group led by Vista Credit Partners to further its international expansion and make acquisitions in what is a fragmented market.
The company, which has 25 million registered users, already offers online legal documents and virtual attorney meetings to businesses and individuals in the U.S., U.K. and parts of Europe. Customers pay $40 monthly for a subscription or for individual documents, from $40 for a simple living will to $100 for an incorporation filing.
CEO Charley Moore, who practiced law in Silicon Valley before founding Rocket Lawyer in 2008, says the idea for the business was simple. Why couldn’t regular people “get the kind of access to great legal counsel and tools that well-funded, venture-backed companies and rich people could get,” he says.
The San Francisco-based company’s first online document was a form for a living will. Now it has over 1,000 online documents available, with counsel from a Rocket Lawyer attorney.
Rocket Lawyer is among a host of legal startups attracting money from venture capitalists looking to disrupt the staid legal profession. Last year, Everlaw, which helps lawyers sort and search vast amounts of digital documentary evidence, raised $62 million from investors including Google parent Alphabet. Verbit, an A.I.-powered courtroom transcription service, raised $91 million in two rounds of fundraising. And Notarize, which offers online notary services, raised $35 million.
Rocket Lawyer, which has raised about $50 million in prior rounds of venture capital, faces competition both from traditional law firms and other online companies like LegalZoom and UpCounsel.
The COVID-19 pandemic accelerated the shift to online legal services, just as it fueled e-commerce and video streaming. “With a pandemic, the need for completely digital solutions for justice has never been more acute, when you can’t have physical presence,” CEO Moore says. “We saw real acceleration, that isn’t going to go back the other way. Not just regular people, but companies and governments have gotten have started really depending on digital, legal transactions that don’t require physical presence.”
Rocket lawyer is profitable and growing at “very nice clip,” Moore says while declining to get more specific. For the past few years, the fastest growing part of the business has been convincing large and medium-sized businesses to offer Rocket Lawyer as a benefit to their employees.
Moore grew up in the St Louis area where he helped his dad, who ran a chain of gas stations. He attended the U.S. Naval Academy, served in the Navy for several years, and then attended law school at the University of California at Berkeley, graduating in 1996 just as the Internet boom was taking off. As a lawyer in Silicon Valley, he worked on numerous deals for Internet startups including Yahoo’s initial public offering.
As a black CEO in Silicon Valley, Moore has suffered his share of racial incidents and says he has experienced racial profiling multiple times. The killing of George Floyd further alarmed Moore, who has three sons. As a way to offer aid, Moore added a new function to Rocket Lawyer’s mobile app called Rocket Evidence. Any user can upload video footage they’ve taken or found that may show evidence of a crime and get a consultation with lawyers at the company.
Explaining the goal, Moore quotes a line from Hamlet’s most famous speech: “end the heart-ache and the thousand natural shocks that flesh is heir to.”
“Video is capturing these thousand natural shocks,” he says. “Increasingly, video evidence has become an essential critical part of justice and the process of justice.”
Rocket Lawyer attorneys review all uploads. “You can make your problem our problem,” Moore says. “If you have a claim, someone will help you with that claim, again, using that as video evidence. And that was absolutely done in reaction to it the murder of Mr. Floyd by a government agent in broad daylight.”
(Correction: This story was updated on April 21 to correct that Moore was raised in St Louis and practiced law in Silicon Valley.)