Robert Ambrogi Blog
SmartEsq, a legal technology startup founded by former Big Law and private equity veterans, announced its official launch today, introducing an AI-powered platform designed to streamline legal workflows for private investment funds.
The company’s platform, scheduled for commercial release later this quarter, aims to reduce the time and cost associated with private fund formation while maintaining high standards of accuracy and compliance.
The New York-based company was founded by Esther Chiang, its CEO, who is a former Stanford-trained engineer turned private equity fund formation lawyer, and Kristen Gandhi, who brings extensive experience in AI and cybersecurity.
The company says its end-to-end solution will reduce lawyer time on formation from the typical 2,000 hours or more for a $1 billion fund to approximately 400 hours, cutting the time by 80%.
This efficiency gain could translate to legal fee savings of more than 75%, reducing costs from over $2 million to approximately $500,000 for comparable work, the company projects.
It also shifts the typical workflow ratio from 80% associates and 20% partners to 20% associates and 80% partners, potentially allowing for more strategic deployment of legal talent.
The platform is launching with seven core modules focused on streamlining critical aspects of fund formation, including regulatory compliance, document generation, and side letter management.
“SmartEsq was founded to streamline private fund formation and empower in-house legal teams to work at the speed of business with efficiency, and accuracy,” said Chiang. “Our unique combination of advanced technology and expertise in the nuances of private fund legal workflows will allow us to harness multitudes of AI techniques in our soon-to-be-released platform to solve complex and labor-intensive tasks, such as side letter compendium generation.”
Image provided by SmartEsq.
The platform’s initial release includes seven modules:
- Fund term extraction and benchmarking.
- Smart regulatory markup.
- LPA comment aggregation.
- Side letter compendium generation.
- Sandra Chatbot for funds-related law and regulations.
- Smart redaction capabilities.
- NDA coaching tools.
Additional modules in development include PPM generation, terms sheet generation, smart compliance database, and transfer agreement coaching, according to the company’s product roadmap.
The company cites significant market inefficiencies in current fund formation processes, noting that traditional approaches for a $1 billion fund typically require 12-18 months and cost over $2 million. SmartEsq’s platform aims to reduce this to 6-12 months while cutting costs to approximately $500,000.
Other members of the founding team include:
- Katherine Loanzon, COO, a legal recruiter and attorney experienced in advising startups.
- Paul Patrow, CLO, a former Big Law tax partner with expertise in private investment funds.
- Vincent Wu, CDO, a data scientist with a background in economic analytics.
- Mara Arikian Reilly, board member, an investment banking veteran who has served in roles at Apollo, Goldman Sachs, and Deutsche Bank.
“We built this company to improve private fund legal workflows using innovative technology in an easy-to-use-and-adopt platform while keeping our client’s data privacy and cybersecurity to the highest standards,” said Gandhi.