09 June 2020

Linklaters joins JP Morgan, Goldman Sachs and Barclays in $27m legal tech investment

Paul Lewis

Paul Lewis: 'Our clients are already receiving value from the technology'

Magic circle UK firm unveils partnership with capital markets document management platform H4

UK magic circle firm Linklaters has teamed up with JP Morgan, Goldman Sachs and Barclays to invest a total of $27m in London-based legal tech company H4.

Founded in 2015, H4 was the first startup to join JP Morgan’s In-Residence Program and has grown to around 120 staff. It operates a document management platform for capital markets transactions.

It said the consortium had made a series of investments that were completed earlier this year and which collectively gave the participants a minority stake in the company.

Linklaters said the 'strategic partnership' was part of its strategy of ‘embracing new ideas, technology and tools’ placing it ‘at the centre of new and emerging technologies that have the potential to fundamentally disrupt the way in which capital markets currently operate, with knock-on effects for our clients’. 

Global head of finance Paul Lewis added: “Our clients are already receiving value from the technology in the production of prospectuses and we are exploring where else we can extend its use so that more clients can benefit from this new and exciting technology.”

H4 said it had already worked with fourteen of the world’s leading law firms to raise billions of dollars in the US and European high yield bond markets and it was now exploring other use cases for its technology across the financial services market.

Firms it has worked with include Allen & Overy, Clifford Chance, Cravath Swaine & Moore, Davis Polk, Freshfields Bruckhaus Deringer, Sherman & Sterling and Slaughter and May.

Joe Seifert, H4’s CEO and co-founder, said: “The H4 team are solving the pain of using decades old technology for the contracts that lie at the heart of the financial and legal industries. 

“We just can’t accept that such important industries are still reliant on outdated tools when technology can unlock so much more, particularly during this time of remote work.”

Linklaters said the deal was the latest of a series of recent investments and collaborations, which include a partnership with regulated fintech company Nivaura, which focuses on automating the issuance and administration processes for financial instruments. 

A number of UK law firms have sought to emulate the banking sector by investing in and nurturing technology startups.

These include Slaughter and May and Allen & Overy, which both operate tech incubator programmes, with Slaughters best known for its investment in legal AI company Luminance.

Last December, Deloitte’s UK legal arm, Deloitte Legal, launched a tech incubator programme that hosted an initial cohort of 14 startups.

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