While platform players are going super-wide in their offering, some legal AI startups are going the other way and drilling down into ever more niche use cases.
SmartEsq, an AI-driven startup headed by a former Kirkland & Ellis lawyer and focused on fund formation, has just launched an automated Most Favoured Nation (MFN) election process tool, purpose-built for private equity firms and fund formation counsel. (See the AL Interview below with co-founder and CTO, Kristen Gandhi.)
To which you may then say….a what..? Well, as the US-based company explained: ‘The MFN election process is one of the most tedious and risk-prone components of fund documentation. Legal teams must cross-compare terms across dozens of investors, assess eligibility against negotiated constraints, and compile election summaries under tight timeframes.’
In short, this may well seem a bit obscure if you’re not a specialist in the area, but for those lawyers who do work in this field then they will find that the new ‘tool eliminates manual tagging, reduces legal costs, and compresses a multi-week process into just a few hours’, the company said.
SmartEsq’s MFN Election tool eliminates the ‘manual burden, automating the identification of MFN-eligible provisions and investor electability, and generates a complete MFN compendium and election forms with no tagging, templates, or training required’, they added.
Esther Chiang, CEO and Co-Founder of SmartEsq, who worked at Kirkland and also Paul Hastings, said: ‘This is a game-changing tool for fund counsel. We built it to solve the actual bottlenecks in the MFN process. It’s fast, accurate, and designed to scale as funds grow.’
This site also asked co-founder and CTO, Kristen Gandhi, a few questions about how things are going since their launch.
How has it gone since you launched in February this year?
Great! We received a lot more interest than expected from large law firms, so we were excited to accelerate our development accordingly. (See the original launch story in AL here.)
What have customers said so far?
Our customers have been excited about our platform and have mentioned that we are the most comprehensive solution on the market. This confirms our belief that we have built a solution that fund formation lawyers have been seeking. We are very humbled to learn that our platform actually has given real significant time and cost savings to our customers in things like pitch deck review and compendium generation.
Do you feel that specific tools are better than broader AI platforms?
Broader platforms are great to give you a general idea and to get started, but to really move the needle in high stakes use cases you need to focus on outcomes to get from the 80/20 rule to the higher levels of accuracy and assurance that is closer to 95/5 that is necessary in legal use cases. Lawyers cannot risk using an AI tool that generates incorrect information when servicing high stakes clients. Just look at the headlines to see what we mean – LLM hallucinations making their way into legal briefs and referencing nonexistent case law.
How is the funding situation?
We’ve been very proud to bootstrap up to this point; of course we are always revisiting and if that changes at any point you will be one of the first to know.
Are there customers for this MFN tool yet?
All of our customers on the premier tier get automatic access to the tool as part of their subscription to our platform – we are rolling out to our existing customers next week.
Thanks and congrats on the expansion!
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You can find more about the company here.
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Legal Innovators Conferences in New York and London – Both In 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, where the brightest minds will be sharing their insights on where we are now and where we are heading.
And also, Legal Innovators UK – Nov 4 + 5 + 6
Both events, as always, are organised by the awesome Cosmonauts team!
Please get in contact with them if you’d like to take part.
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