Legal technology platform takes aim at the half-a-trillion dollars spent by enterprises on outside counsel
PRINCETON, NJ. (April 22, 2020)—Edison Partners, the growth equity investment firm, today announced leading a $10 million investment in New York-based Bodhala, a data-intelligence and legal technology platform. The company will use the funds for product expansion and sales and market acceleration as it transforms and modernizes the purchasing of outside counsel services.
Companies spend nearly $500 billion annually on outside counsel, with hourly billing rates tracking at almost four times the rate of inflation. 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. Bodhala applies data science, machine learning and AI-driven insights to help companies analyze, interpret and optimize outside counsel spend.
Bodhala experienced 300+% 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, healthcare services, insurance, energy and private equity.
“Bodhala co-founders Raj and Ketan developed the first modern platform to bring data-intelligence, let alone real-world economics, to the legal services spend of large and enterprise firms,” said Daniel Herscovici, Partner, Edison Partners, who led the investment. “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.” Herscovici will join Bodhala’s Board of Directors.
Bodhala data shows the top-15-by-revenue firm street rates went from under $700 in 2000 to more than $1,650 per hour today. Average equity-partner profits at the top U.S. 100 firms have doubled since 2004 to $1.88 million in 2018, according to American Lawyer, with eight firms averaging more than $4 million.
“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.
“Bodhala is at the center of a dynamic 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 ecosystem, from corporate legal department to law firm to alternative service provider,” said Ketan Jhaveri, co-founder and President of Bodhala. “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 the COVID-19 pandemic, 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.”
Edison Partners’ 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 Daniel Herscovici since joining the practice in 2018 and the firm’s second B2B software investment in the last month.
Edison’s current enterprise solutions portfolio includes Anonos, All Traffic Solutions, Blue Medora, Bricata, Emplify, ExecVision, Giant Oak, Jornaya, Northpass, NS8, Overhaul, PathFactory, Predata, Suuchi, TripleLift, Terminus, and Zagster. Notable exits in the sector include Archive Systems, Billtrust, eSentire, ItemMaster, InSoft, Kemp, Logfire, Notable Solutions, Operative, Tangoe, Telarix, Virtual Edge, and VFA.
About Bodhala
Bodhala is the groundbreaking legal technology platform created by lawyers to transform the half-a-trillion-dollar global legal industry. Our platform refines organizational processes by empowering your legal team with deeper insights that allow you to better analyze, interpret and optimize outside counsel spend, trailblazing a new era of legal market intelligence.
We’re built on data – how we develop it, how we utilize it and how we analyze it for the benefit of our customers sets us apart. Our proprietary benchmarking metrics and rate review algorithms generate detailed insights into every aspect of legal spend. Our intuitive dashboard puts the information you need to make more cost-effective decisions about legal service providers at your fingertips, effectively boosting efficiency and improving your bottom line. For more information, visit https://www.bodhala.com.
About Edison Partners
For more than 30 years, Edison Partners has been helping CEOs and their executive teams grow and scale successful companies. The firm’s investment team brings extensive investing and operating experience to each investment. Through a unique combination of growth capital and the Edison Edge platform, consisting of operating centers of excellence, the Edison Director Network, and executive education programs, Edison employs a truly integrated approach to accelerating growth and creating value for businesses. A team of experts in financial technology, healthcare IT and enterprise solution sectors, Edison targets high-growth companies with $5 to $25 million in revenue; investments also include buyouts, recapitalizations, spinouts, and secondary stock purchases. Edison’s active portfolio has created an aggregated market value exceeding $10 billion. Edison Partners is based in Princeton, NJ and manages more than $1.4 billion in assets throughout the eastern United States.