WeWork's former top lawyer is building an 'AI-native' law firm. Her model for client cost savings? TurboTax.
Founded by two former general counsels and backed by $4 million in venture funding, Covenant is betting that private markets are ready for a software-first approach to legal advice. Its tools use large language models to root through hundreds of pages of legal documents, raise red flags, and suggest stronger terms that are tailored to the investor's own playbook.
In the world of venture capital and other private funds, investors still pay law firms to tell them where and how to park their money. Endowments, pensions, and other institutional allocators rely on white-shoe lawyers to review limited partner agreements (LPAs), the legal backbone of a private investment fund. In theory, the bigger the law firm, the better the insight because it has seen more deals. But prestige doesn't come cheap, and neither does the billable hour.
Covenant is selling directly to institutional investors, not law firms, with the hope of cutting straight to the client and their bottom line.
Just as TurboTax made many Americans question whether they really needed an accountant, Covenent aims to give private market investors a reason to ask whether Big Law's invoices are still worth it.
The company tells Business Insider it's raised $4 million in a seed round led by Flybridge Capital Partners, with Neil Barsky, a former journalist and hedge fund manager, participating.
ReWork
Through the late aughts, Berrent was chief legal officer and co-president at WeWork, where she walked one of the trickiest tightropes in corporate law: counseling a high-flying, often chaotic startup and its mercurial founder, Adam Neumann. In 2019, former employees told Business Insider that Berrent was the person who tamed the chaos and protected the company as crisis after crisis unfolded.
She left WeWork in 2020. At first, Berrent set out to build a tool to help founders negotiate legal contracts. But she and Richard Perris, Covenant's cofounder and president, realized that opportunity was limited. Term sheets, offer letters, and non-disclosure agreements are relatively short, standardized, and not all that complex.
The bigger pain, Perris says, lives in private fund docs: LPAs and side letters, which carve out specific terms for specific investors. Their high-stakes fine print demands hours of expensive lawyer time. That's where large language models, Perris says, could "come in and crush this problem."
But before Covenant had a product or revenue, Flybridge made "a bet on Jen," says Jesse Middleton, who helped scale WeWork as an operator before becoming an investor at Flybridge.
Over the past 18 months, Berrent says Covenant has brought on around 45 customers, including endowments, foundations, pension plans, funds of funds, and sovereign wealth funds.
She declined to name any clients, but says monthly transaction volume has grown 50% since January.
Law Firm 2.0
Covenant is part of a new wave of law firms with the skeleton of a tech company and legal services layered on like tissue. Zach Posner, a venture capitalist who correctly called the legal tech boom in 2019, calls this category Law Firm 2.0. His fund is launching an accelerator to back the companies that compete head-on with law firms.
Zach Abramowitz, a consultant who advises law firms and legal departments on which software to buy, says he expects to see star attorneys peeling off from big firms to start their own tech-enabled practices.
To Abramowitz, the real upside isn't in building the next legal-tech unicorn like Harvey or Ironclad. It's in the long tail — what he describes as the Shopify phase of legal tech. Just as Amazon and Shopify unlocked a wave of entrepreneurs who built their own stores on top of those platforms, Abramowitz believes artificial intelligence will enable a surge of "bionic boutiques" that can generate significantly more revenue per lawyer.
"That's a much bigger opportunity," he said, "that inures to the benefit of more people."
Covenant joins a growing list of software companies with big backers and even bigger promises to strip the drudgery from legal work. But murmurs of a legal tech bubble are growing louder, especially as flashy tools like Harvey and Legora jockey for relevance in a still-cautious market.
For now, Covenant doesn't compete directly with those platforms, which sell into law firms and corporate legal departments. Instead, it occupies a lane closer to contract review tools like Luminance and Spellbook, which are also built for lawyers, not private market investors. To Berrent, the key distinction is that Covenant is selling legal services to customers who typically hire Big Law to do this work.
Berrent says she sees the next big opportunity not in AI for law firms, but in entirely new firms built around the tech. Call it counsel-as-a-service.
"Uber didn't sell software to taxi companies," she said. Instead, it redefined how people think about getting from point A to B. That's the kind of shift she's after.
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