Princeton-based Edison Partners on Wednesday announced leading a $10 million investment in New York-based Bodhala, a data-intelligence and legal technology platform. The company says it will use the funds for product expansion and sales and market acceleration as it transforms and modernizes the purchasing of outside counsel services.
Edison, a growth equity investment firm, has financed and guided more than 235 private companies, a third of which have been in the enterprise solutions space. This is the third investment for Edison Partners Partner Daniel Herscovici since joining the practice in 2018 and the firm’s second B2B software investment in the last 30 days.
Bodhala applies data science, machine learning and analytic insights to help companies analyze, interpret and optimize outside counsel spend. It experienced 300-plus percent growth in both revenue and headcount in 2019 and is on pace to do the same in 2020. The company saw significant client growth in the last 12 months across each of its key verticals, including financial services, health care services, insurance, energy and private equity.
Bodhala believes that companies spend nearly $500 billion annually on outside counsel with hourly billing rates tracking at almost four times the rate of inflation, therefore general counsel and procurement leaders are looking for more transparency into their legal costs and performance, and a method to shift spending towards their optimal panel firms.
“Analysts estimate AI-driven legal technology will be a $37 billion business by 2026, and the Bodhala SaaS platform delivers the insights general counsel and claims officers need to make meaningful decisions about their budgets, while still producing equal or better legal outcomes.” said Herscovici, who will join Bodhala’s Board of Directors.
“The legal industry is a non-functioning market where law firms have had full control, leaving in-house counsel at the mercy of ever-increasing fees from their counsel without the leverage the ‘buy-side’ deserves to have,” said Raj Goyle, co-founder and CEO of Bodhala. “Our mission is to bring a market-driven economy to the legal industry—one where visibility and fair competition lead to the selection of the right lawyer at the right law firm at the right price. The groundbreaking platform we have built is uniquely positioned to address this issue and through our partnership with Dan and the Edison team, we will be able to continue to drive real and meaningful change in this market.”
Bodhala was founded by Raj Goyle and Ketan Jhaveri, who met at Harvard Law School and pursued careers in politics and law, respectively. Goyle was a member of the Kansas House of Representatives and ran for U.S. Congress in 2010. Jhaveri worked for the U.S. Department of Justice and spent 10 years practicing antitrust law at Simpson Thacher & Bartlett LLP. They came together in 2014 and went to market with their legal spend management solution three years later.
“With Bodhala, internal legal departments are able to direct work to the right outside lawyers, consistent with but not exclusively based on relationships, and then guide the work more appropriately to manage legal risk, outcome and cost. During COVID, this has become even more important, as clients consume Bodhala data to hedge the risk of being overly reliant on too few relationship law firms or partners,” said Ketan Jhaveri, co-founder and President of Bodhala.
“Bodhala is at the center of a rapidly changing legal system marked by the emergence of legal operations as a profession, the changing economic models of law firms, and the rise of new technologies. Relationships are no longer the sole proxy for evaluating the value that a law firm brings to its clients. We’re creating a clear win for everyone involved in our modern legal system, from corporate legal departments to law firms to alternative service providers,” added Goyle.