Almost a dozen legal tech companies received Paycheck Protection Program (PPP) loans of over $1 million, according to Legaltech News’ review of data released by the Small Business Administration (SBA) on Monday.

The federal loans, first offered as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, aimed to bolster small businesses payrolls amid the economic disruption caused by the COVID-19 pandemic.

A host of legal tech companies also received loans in the range of $150,000 to $350,000 and $350,000 to $1 million. There may also be more legal tech companies among the over 660,000 recipients that secured PPP loans in access of $1 million that Legaltech News missed.

Per the initial review of the data, e-discovery and legal services providers Fronteo USA and Legility each received between $5 million and $10 million in PPP loans. The SBA, which only disclosed approximate amounts, also noted that using the funds, Fronteo retained 434 jobs, though it did not have similar information for Legility.

By press time, neither company responded to questions from Legaltech News about why they applied for, or how they used, the federal loans.

Before the height of the pandemic, however, Legility acquired e-discovery solution provider Inventus in January 2020, expanding its international footprint and tech offerings. In late June, the company also underwent a rebranding with a new logo, website and a revamped focus as a “tech-enabled legal services provider” that offers more than just e-discovery.

Fronteo and Legility were far from the only legal tech companies receiving PPP loans, which comes with the 1% interest rate and the option to be forgiven if a specific portion is spent on payroll expenses.

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Legaltech News also found that e-discovery software and services providers AccessData and Driven, as well as Legal Solutions Holdings, owner of case management technology provider Med-Legal, secured loans valued between $2 million and $5 million. According to SBA data, AccessData retained 115 jobs, while Driven kept 143 and Legal Solutions Holdings kept 179.

At least six legal tech companies also received between $1 million and $2 million in PPP loans, including:

  • American LegalNet, which offers technology around docketing, calendaring and e-signatures;
  • Alternative legal service provider Level 2 Legal;
  • Legal research platform Casetext;
  • Remote court appearance tech platform CourtCall;
  • E-discovery and enterprise management tech provider doeLEGAL;
  • Alternative legal service provider Level 2 Legal;

The SBA noted that using the funds, Casetext retained 50 jobs, while CourtCall secured 101 and DoeLegal kept 52. Level 2 Legal also retained 83, while Americlerk retained none, according to the data. There was no information for American LegalNet.

DoeLegal, Level 2 Legal, and CourtCall did not respond to requests for comment by press time, while Americlerk and American LegalNet declined to comment.

However, in an email, Robert Alvarado, CEO of CourtCall noted that company applied for a PPP Loan due to the business disruption caused by court closures.

“As the Pandemic unfolded, state and federal courts across the nation closed or limited activities such that hearings that could have typically been handled by CourtCall did not occur.  As a result, CourtCall’s revenues were adversely impacted and its staffing requirements were likewise reduced. Against such business downturns, the PPP proceeds enabled CourtCall to maintain employment and payroll consistent with the terms of the PPP program.”

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Casetext CEO Jake Heller had also previously told Legatech News in April that though the company was “in a really stable place,” it may take advantage of a PPP loan to be able to “maintain stable operations.”

In February 2020, before the start of shelter-in-place mandates across the United States, Casetext released its brief-writing platform Compose and in March closed on $8.2 million in funding.

In an email, Heller noted that the company decided to apply for a PPP loan “based on what we saw in the market in April. With law firms announcing spending cuts at the same time, VCs were pulling back in response to volatility, like any small business, we felt we had an obligation to take steps to protect our team and the customers.”

To be sure, a host of law firms, including at least 45 in the Am Law 200 have received PPP loans, with over three dozen securing loans of up to $10 million.



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