The Hybrid AI Law Firm – Artificial Lawyer

Ever since Covenant launched, Artificial Lawyer has wanted to learn more about this new model for delivering legal services. So, it was great to do an AL In-depth interview with Jen Berrent, co-founder of one of the first AI-powered hybrid law firms.

Covenant is not alone in placing AI front and centre in their legal offering, we have also seen Crosby come to market, and on a smaller scale there is Garfield. We’ve also seen legal AI company Eudia open its own ‘law firm’ in Arizona. In short, the market is changing.

In Covenant’s case, Berrent is an experienced lawyer who previously had been a partner at WilmerHale and also CLO, then COO, at WeWork. Her co-founder Richard Perris, ran legal and compliance at CVC, the top-tier investment group, and also long ago worked at Clifford Chance. The hybrid AI law firm received $4m seed funding this summer and is growing steadily.

Berrent gave a detailed insight into how it all works and one comment really stood out for AL, which referred to ‘leverage’ – but using the word in relation to technology, not an army of associates. And this is perhaps the central difference between ‘traditional law firms’ and the likes of Covenant, Crosby and others: the leverage is from the AI, not people. There are skilled lawyers there, as part of the offering, and that group will grow, but the ‘engine’, as it were, is not a pyramid base of human legal labour, it’s AI and workflows and data management.

And this is what is revolutionary about this business design: it provides what a regular law firm does, but it’s reworked the part where much of the value – or at least the cost – is created by junior lawyer labour. Moreover, what is most exciting here is that there is little stopping any group of experienced lawyers from doing the same. In fact, Berrent actually notes in the interview that she’d like to see a similar hybrid AI law firm on the other side of the transactions that Covenant works on for its clients.

Here is what Covenant is doing, their story, how it all started, and where they are going. Press Play to watch inside the page, (or go to the AL TV Channel). There is also an AI-generated transcript of the whole AL Interview below.

Chapters

00:00 Introduction to Covenant: A New Era in Law Firms

02:57 AI Integration in Legal Services

05:31 Client-Centric Approach and Trust Building

08:20 The Founding Story of Covenant

11:04 Investment and Growth Strategies

14:01 Regulatory Framework and Structure

16:53 Pricing Model and Value Proposition

19:35 Attracting Talent and Future Growth

22:33 The Future of Legal Data and Client Empowerment

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Legal Innovators Conferences in London and New York – November ’25

If you’d like to stay ahead of the legal AI curve then come along to Legal Innovators New York, Nov 19 + 20 and also, Legal Innovators UK – Nov 4 + 5 + 6, where the brightest minds will be sharing their insights on where we are now and where we are heading. 

Legal Innovators UK arrives first, with: Law Firm Day on Nov 4th, then Inhouse Day, on the 5th, and then our new Litigation Day on the 6th. 

Both events, as always, are organised by the Cosmonauts team! 

Please get in contact with them if you’d like to take part.

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AI Interview Transcript

Hi everybody. Richard Tromans here again at Artificial Lawyer TV, doing a special interview today with Jen Berrent, who has co-created a very, very pioneering law firm called Covenant. Jen, great to have you on the show. Could you tell us to start with what is Covenant? And then we’ll get into how it started and so forth.

Jen Berrent (01:04.713)

Sure, yeah, Covenant is an AI powered law firm currently focused on the private markets. And so we are, whether you think of it as vertically integrated or tech enabled services or AI native, we are all those things in terms of really thinking about how to create an end to end legal solution for a very specific client base. And that’s that is what we do.

Richard Tromans (01:35.758)

All right, okay, so let’s unpick this and then we’ll get into how you and your co-founder started this. So is it a law firm that uses AI a lot or is it an AI company that has some lawyers?

Jen Berrent (01:49.065)

It is neither of those things really. So the way that we think about it is, you know, we started a law firm with the premise that AI exists. So in the same way that, you know, Amazon started a retail business with the premise that the, you know, the internet exists. And so their logistics are based around a warehouse as opposed to logistics being based around a store.

And so we started a law firm with the premise that AI exists. So how would you build your logistics around the fact that AI exists? The second part is that we’re very client-focused. So we wanted to recreate a client experience for the generation we are today. So the delivery of legal services doesn’t need to end with a Word document or an email, but the delivery of legal services could provide control over data and information to those clients in an interface that’s technology that looks like any other SaaS product that HR or finance would have. And so we really started with that premise. then from there, we sort of designed the business to have very specific solutions saying, OK, AI exists, lawyers exist and how are going to marry those two?

Richard Tromans (03:16.59)

And I had a look at the website. It’s very interesting. And you like a sort of product page, you know, there’s a, you know, most favored nation products and so forth. Is that how customers, clients come to you first? They say, Hey, we’ve got these particular needs and may slot into these product categories. And then these are just like legal tech products that just run themselves or you, have to say, okay, great. I’m glad you’ve chosen letter B. We will now run that for you send us the documents. We’ll have a lawyer overseeing this process. How does that work?

Jen Berrent (03:48.499)

Sure. Yeah, so what’s interesting is the clients come to us much less through a product-led process. It is much more relationship-based still. There’s still a sense of, understand you’re using AI, but I want to make sure I trust you. And that trust comes from the personal connection. So my partner, Richard Paris, who is a former general counsel of CBC Capital Partners, or myself, really meets with every client still even if after that initial meeting, the human contact actually may drop off significantly. They do want to make sure that the quality behind it and the personal connection behind it works is trustworthy.

What we do have though is that we think that technology works best and most efficiently, where you can have a dramatic decrease in cost and time is when you have you know, purpose built tools, right? So what we are saying is we have very specific problems that we solve end to end. And because we do that, even though it might be customizable on a client by client basis, that process just, you know, takes something and decreases the time and cost by 80, 90%.

And so that has been our philosophy is that it’s not just a general purpose efficiency tool, but it really is a sort of a radical departure for our clients in terms of their experience, right? It’s just, sort of a very new experience for them. And so we do limit it to, you know, sort of products where we can have that size impact, right? Not just a marginal impact, but a pretty, you know, dramatic impact.

Richard Tromans (05:35.918)

Yeah, and I want to ask you about that. So, mean, presumably you have to streamline what you can offer them. You can’t offer them absolutely everything. Even in that one niche of private investors, you’re going to have to only offer certain streams because you’re, I mean, how many lawyers are you altogether?

Jen Berrent (05:41.117)

That’s right.

Jen Berrent (05:54.493)

So we’re six lawyers, but it’s highly, highly leveraged, right? So the amount of work that we can do with those six lawyers is very high. So yeah, there’s a lot of product development that goes into it. And so we started with a wedge of doing limited partnership agreement review. We really can do any investor side review. if you’re investing in private markets and you need your investment documents reviewed, summarized, issues spotted. we can do that. And so that really, we’ve expanded on the technology basis, sort of the backend of both interacting with AI, the regular platform technology, as well as the legal content so that we’re able to provide that solution. Same thing, we really can do any MFN election compendium. That was a big pain point for our clients. And so we didn’t want to just say, okay, we can…somewhat do that and we can do sub docs and we can do, you know, all these different things. We really wanted to take one problem and solve it dramatically for clients. And that’s what we’ve done with the MFF.

Richard Tromans (07:00.376)

It opens up so many interesting points. And I love the way that you use the word leverage, but here the leverage is the technology. And I do wish that traditional law firms would think in the same way that the leverage model they’ve been living within, part of that leverage is the tech, rather than thinking that tech is this thing that they add on at the end.

Jen Berrent (07:08.723)

That’s right.

Jen Berrent (07:22.917)

Exactly, exactly. The technology is our leverage. And in fact, the way we even started is, you know, so our core product of this investment document review, we send it out to multiple models, right? So we use ensembling. And so we think of it as, you know, the marginal cost of an additional AI review is very low. And so wouldn’t it be great instead of having one AI associate review, have five AI associates review?

And that’s really borrowed from historical machine learning of using multiple models. So then we get those multiple model answers back. And then the job of the lawyer to verify becomes easier. When the models disagree, then you allow for an additional layer of diving deep into it. And so again, we said, okay, what is the leverage? The leverage is the AI, the leverage is the technology, the leverage is focus. The leverage isn’t the people, right? You know, just, you know, very different than the way law firms think about it.

Richard Tromans (08:33.484)

Yeah, absolutely, absolutely. It all comes down to a very, very old concept, the division of labor. Who does the work? What does the work? Very, very interesting. I think we now sort of set the table. So let’s just go back a little bit. How did you and your colleague, how did you get into this?

Jen Berrent (08:41.021)

Sure. So before this, was at WeWork. I was the lead lawyer. And then I was the COO during the global expansion, scaling up of the business through the first failed IPO and then stayed about a year longer. And so there were a lot of lessons from that WeWork experience that I could take and say, OK, what are businesses that could have a similar

know, trajectory and impact. And I’m a lawyer by training. I was a partner at a law firm beforehand. And, you know, you thought 10 years ago, the AI should disrupt the law. And, you know, I think a lot of people thought there should, there’s something that should change in the practice of law. And then with AI, obviously, you know, there’s that opportunity. But, you know, a few lessons were, this idea of going to clients, right? So we worked in disrupt and change the real estate business by focusing on the members, not focusing on the landlords. And I do think that for law to change, there needs to be a focus on the client experience, not on the law firm lawyer experience. And that was one thing that I thought would be important.

The second thing was, I do think, that in this day and age, going global is important, so that we work really said, look, we’re going to start with the US, but we’re not going to own the US before we go global. And that is sort of a core tenet of what we’re doing. So again, what is sort of a business that you can think about from a client perspective and a global perspective, those two things. And then what attracted me to private markets was I wanted to do something that was complicated and not doing it just another NDA product or another commercial contract. really, how can you start with something that is high enough that it really is cutting into work you would give to an outside law firm, that you would give to big law? And it’s sort of a very hard problem. so.

Jen Berrent (11:13.657)

There’s obviously a lot of complication in private markets. You start with 120 pages of agreements. so with that, I teamed up with Richard Parris, who was the general counsel, as I mentioned, of CVC. And we sort of structured a business around this idea of complicated, going to clients, really rethinking that experience of the law, using AI to do that.

Richard Tromans (11:41.632)

Yeah, now it’s, and so it’s just on, if we can talk about the money side, I mean, do you have external investment? Are you allowed to have external investment? How do you grow this if it’s not organic?

Jen Berrent (11:54.409)

Sure. we do have, so one thing that has been interesting, we do have, I will start with the end is that we do have external investment and I’ll explain them structure. But what we have learned is that when we started the business, we really, we launched our first product, this wedge product of the LPA review and we were ahead in January, 2024. And the reason it even took that long was that

Until November of 2023, the context window was not large enough to ingest a 120-page document. And any other solution, know, rag, know, chunking, there’s too much of a decrease in quality that the human was beating the machine, right? So you can’t really launch a product where, you know…

it’s still faster to have the human do it, right? And, you know, in legal sort of the cross references, the nuance, the definitions, that all mattered. So we needed the big context window. That happened in November 2023. And so we really basically spent, you know, you know, holiday period building our MVP to say, now we can do this. And we launched in January 2024. When that started, we didn’t know, would this be a business?

that that core AI review with some client interface was then going to say, OK, now add a lot of service providers, right? And so that it was going to be a one way street. Like here, we’ve reviewed something and now you look at it. And here’s something else and we’ve reviewed it and now you’ve looked at it. But what has changed is that clients really want control of that experience. They want more technology.

They see law firm lawyers using AI tools and they want to use AI tools. They don’t like law firms being the gatekeeper of their data. They want to unlock their own data. They want to query their own verified data set. And so at the beginning of this year, we made the strategic decision that we really needed capital for product development. It’s not just a matter of hiring more lawyers, but it’s actually building more tools for our clients to use. And so we did take in capital this year, sort of know, level of leverage. Yeah. Yeah, yeah.

Richard Tromans (14:14.382)

I think if I just just interject just as I’m a bit of a regulatory geek. So the you’re based in New York. It’s a New York company, in which case, are you regulated by the New York bar? Or how does that work? So

Jen Berrent (14:27.069)

Sure. Yeah, so the way that it works, our structure is that we have sister companies. It’s a New York law firm.

Richard Tromans (14:33.998)

So you have your law firm and you have your tech company and the two connect.

Jen Berrent (14:38.407)

Yes, exactly. And so it’s a very typical, it’s a license that goes between the two. So there’s an IP company and what’s in that IP company is obviously brand, but all the technology, but all of the costs of operating the law firm are in the law firm. And so there’s a license between the two to use this technology. The other reason it was important for us to do this is we really believe that

law could look like SaaS in terms of share of wallet. you know, and the only in terms of if I implement Salesforce, I don’t put some of my, you know, know, contacts there and some somewhere else, I just do 100 % there. And we think law could have a similar feel if you productize, but we have a conflicts issue. And so we have decided we will only do one side of that transaction in this law firm.

And if we want to use the technology to represent the other side, that would have to be a different law firm, either sort of a third party or something else. But we only do investor side. So investors are

Richard Tromans (15:43.366)

So you are sort of like subliminally telling the market to create another company just like yours, who can do the other side? And you can really speed things up then.

Jen Berrent (15:51.079)

the other side or we could do it. So, you know, that’s right. Exactly. Exactly. But we’re working now. Honestly, we’re there are a lot of GP side or, you know, company side law firms or solutions and we want to partner with them. I think there is, you know, there’s a trust with our clients and a trust, you know, in the market that we have that we have picked aside and we’re dedicated to that experience. I think that’s been important. So, and you know, and for now that’s that is where we’ll stick, you know.

Richard Tromans (16:27.31)

Yeah, yeah, no, no, no. Well, yeah, absolutely. I mean, you know, again, if you’re going to have human lawyers and you’re going to have that trust aspect to the product, then yeah, absolutely. On the pricing, and I’m sure a lot of lawyers if they’re watching this will find that interesting. So you’ve brought the price down for certain streams of work, should, these are very narrow streams of work, but for those streams, you brought the price down by about 90%. Did you say? Wow.

Jen Berrent (16:42.963)

That’s right.

Yes. Yes. So yeah, so we do it, you know, transaction based, right? So you have a review of a document we charge for our basic review charge $900. And, know, we think it’s about, you know, about 10 times more, you know, maybe some law firms do it slightly less. And then you can and so it’s by transaction, you you sign an engagement letter with us, it looks, you know, it’s replacing legal fees. And so it’s sort of easy to digest, easy to understand.

For a live transaction, can pay an additional surplus if you do want a sort of more lawyer intervention, especially if you don’t have an in-house general counsel and you want us to drive. But again, that’s based on a fixed fee. Almost nothing we do is by the hour.

Richard Tromans (17:33.614)

Hallelujah. And so, but what happens when it escalates? What happens if something is particularly tricky? You just say to them, you we’d love to help you, but that’s just not our ball game. We don’t do that. You know, we go and talk to Kirk London Alice. They’ll help you.

Jen Berrent (17:37.341)

Yeah, like if someone has a big tax question, for example, and that was really strategically again, early this year, that to me is like the big divide. Are you going to bring on a tax lawyer or are you not? Right. I mean, you know, that sort of just philosophically sort of serves as a proxy. And at the beginning of this year, we said, no, we’re not. There’s a lot of place to get really good bespoke tax advice. Our clients already have relationships with tax and regulatory. Regulatory is the other area.

Richard Tromans (18:06.347)

Yeah.

Jen Berrent (18:19.077)

And we can work together with them. already work, you you can work side by side with another law firm, you know, to answer those questions. And again, we think that the solution is so valuable in other ways that that is something that clients appreciate. And they’re not, you know, they’re already paying by the hour for that lawyer. And then our fees are down. We don’t have to pass, you we don’t have to sort of, you know, you know, we can stay skinny and affordable.

Richard Tromans (18:47.63)

No, and also, I mean, it’s a question of triage, isn’t it? It’s like, you you’re paying for a high value advisory, like, you know, tell me what to do. I do not understand it. Tell me what to do. That’s a totally different question to, I have these documents, are they documents? Is there anything in them I need to worry about? These are very, very different questions.

Jen Berrent (19:01.789)

Exactly.

Jen Berrent (19:06.857)

That’s right. And law firms are really good at what they do, right? So, I mean, they are, you know, in general, the lawyers are very smart, very responsive. You know, they provide a service that really is, you know, unrivaled, right? Where else can you sort of call them on, you know, on a Friday afternoon, say, I have a deal and I needed to get done next week. And all of a sudden, you’ll, you know, you’ll have people. So the thing that’s happened is that

Richard Tromans (19:30.85)

They’ll do it.

Jen Berrent (19:36.381)

there’s sort of a level of work that has now been fed to law firms because they do it so well, but they really don’t need to do it, right? It’s just that you don’t know where else to go, right? And so with technology, you can say, okay, go here, right? It’s just, there’s really just not another solution. So you have 120 page document. You don’t actually need, you know, law firm associates reading that document that you need law firm associates for a lot of other things, but you don’t need it for this process. But where else do you go? Like where else is, you know, scale up, scale down services, you know, where, you know, where you can, you know, be assured of the quality. And that’s really what we’re offering, right, is you’re assured of the quality, you have lawyer verification, we have very pedigree lawyers on our staff. And so, you know,

Richard Tromans (20:25.838)

actually on that point, it’s interesting, isn’t it? Because I mean, like one of the arguments is like, you know, great lawyers don’t become entrepreneurs, not because they don’t lack entrepreneurial ability, because some of the great lawyers are very entrepreneurial, because they’re entrepreneurial in creating, you know, new, but they think, hold on a minute, am I, can’t own this venture, I can only be partner and equity partner in a legal bit. So I mean, how do you incentivize really good lawyers to join?

Jen Berrent (20:33.118)

Sure.

Absolutely. They started their own firms.

Richard Tromans (20:54.702)

this, this, because obviously you want to grow, you want to go international, maybe in the UK where you’d be very, very, you could function without hardly any barriers at all in the UK. I mean, how do you incentivise people to join? Do you say like, I mean, how does that work?

Jen Berrent (21:10.173)

Yeah, mean, honestly, I think there are two incentives early on. One is there are people that, you know, if you were in finance and you used a calculator, you’re in finance and you used Excel, you knew right away that those are game changers, right? If you use AI, it’s a game changer. And so there are, you know, we only need six of them. We only need a small number of people who are believers that they want to be on the journey of something new.

And then just, I mean, cash, right? People want, like you can pay people in equity, you pay people in cash and we will pay people, right? I mean, if we’re super successful, people will be rewarded. Some they can get some equity in the ink or we could pay them in cash, right? They’re just compensated. The partnership role, I mean, if anything that you’ve learned from Kirkland is that some of it’s based on partnership.

Richard Tromans (21:47.694)

Yeah.

Jen Berrent (22:08.133)

share of profits, but they’re really just compensating like any other business, right? They have non-equity partners, they have partner guarantees, and you know, you’re just getting cash if the business does well. So I think…

Richard Tromans (22:19.33)

Well, The vast majority of all the people who work in any law firm are not shareholders.

Jen Berrent (22:25.545)

Yeah, exactly. And they get compensated. So that’s OK. I mean, even if you went to Goldman today, some of it’s in the equity, but some of it’s just like, if I’m at a place that’s very successful, people should get compensated. And we’re OK with that. That’s exactly what we want to do. Obviously, have people who are we have someone who came to us from BlackRock, so he was not on partnership track anyway.

And then we have people who are associates at law firms where partnership wasn’t like, it’s not like on the cusp of going. Eventually to hire partners, we’ll have to think through that, but we’re not trying to match that salary right now, match that compensation.

Richard Tromans (23:08.141)

Yeah.

Yeah, not yet. Not yet. Yeah. Which leads us to the last question, which is where from here, so you want to grow, obviously, you can go global. As mentioned, I think certain markets such as the UK, I think you could merge your two businesses. Don’t take my advice on that. Go and talk to the UK. But I imagine you would find it a lot easier to operate with very, with far less barriers.

Jen Berrent (23:29.033)

No, for sure you can in the UK,

Jen Berrent (23:38.013)

Yes. mean, you know, Richard is English, as I mentioned. So we have we think about going to London a lot. you know, sort of if the US becomes too too unbearable in its regulatory scheme, like we are not opposed to going to England.

Richard Tromans (23:56.863)

Or go to a new open office in Arizona or Utah, you know, and do the guest room.

Jen Berrent (24:00.553)

That’s right, we could do that too. Yeah, yeah. Yeah, we haven’t seen the benefit yet, but yeah, I mean, obviously there are a lot of opportunities open to us. I mean, I think where we are right now is, you know, really sort of going deep in private markets. Every single type of investment we’re going to do on investor side, we’re gonna do directs. We’re already doing a variety of fun transactions.

And I think there’s a new universe of legal data that hasn’t existed. And we’re seeing that appetite for our clients to have access to their own legal data is pretty amazing. And that, you know, we’re just in the infancy of that being sort of cost effective and possible. And that is taking sort of this idea of, the gatekeeper and the owner of legal data and what’s market being from outside counsel to being to a client. And that is a very big shift. And I think you could see that in many, many different industries as sort of being, oh, I have my legal data and now I want to interact with it myself and sort of understand it and figure out leverage points to negotiate and query my own database. so.

Because we can do that at affordable price, it’s sort of changing the way, changing the texture of the client experience with their own data.

Richard Tromans (25:25.205)

Interesting. So yeah, so it says like the next chapter is going to be building out that sort of like KM function effectively.

Jen Berrent (25:31.072)

Yeah, yeah, mean, that’s sort of a, you know, KM of 2.0. It’s not just, you know, it’s sort of like, it really is feels more like, you know, how you would have, you know, when we started in my career, you know, the idea of HR data was very limited, right? I mean, someone would have a file that was a paper file, and you really didn’t know, you know, much about your own workforce or what was needed and.

Now HR data is such a driver of businesses, I think legal data will be the same. Clients really didn’t have that. And so we’re just learning. Every time we come out with a new feature, we learn from the clients, A, how they would use that, and B, what they want next. All of a sudden, they’re saying, now that I can do this, I want to do this next thing. I want to do the next thing. So it’s really important.

Richard Tromans (26:17.901)

I guess they weren’t running it through tech streams. They were running it through human streams and humans were sending email to each other. They were moving firm and they were leaving them or whatever. And, know, Bob’s gone on holiday. I’ve got no idea where that file is. Yeah. Whereas like now it’s like, yeah, it’s in the system. We ran it through the system.

Jen Berrent (26:21.425)

No. Exactly. That’s right. That’s right.

Jen Berrent (26:30.172)

Exactly. Exactly.

Jen Berrent (26:36.649)

That’s right. And it’s verified data, right? So, you know, whatever the answers are, it’s been verified by a lawyer. And all of a sudden now I have this complicated, you know, 100 page plus document that is a lot of words that has now come into, you know, the format of data that I can graph, I can compare, can think about, I can see trends, I can see outliers.

And that has just been sort of magnificent for clients to start to experience that.

Richard Tromans (27:08.877)

Yeah, fantastic, fantastic. Well, we’ve got to leave it there, but it’s been a real pleasure, a real eye-opener, and good luck with everything. Thank you.

Jen Berrent (27:15.657)

Thank you, Richard.