How Tanguy Chau is empowering independent lawyers with the power of AI
“Engaged customers are your single biggest source of feedback, and are invaluable. The feedback from our customers has been the biggest driver of features we've implemented in Paxton. This has helped shorten our iteration cycle significantly.” - Tanguy Chau, Founder & CEO of Paxton
Pivoting has become a right-of-passage in the startup world (though at times bordering on cliché). There are countless examples of now-successful companies that changed course early in their trajectory, and seminal essays emphasizing the importance of iteration in the company-building process (see Paul Graham’s How Not to Die).
While not all pivots work, some transcend the cliche and lead to transformative outcomes. Such is the case of Paxton AI, led by CEO and co-founder Tanguy Chau. Though Tanguy initially set out to help large banks process unstructured data for compliance use cases, he soon found that their solution resonated with small law firms, who also needed to digest large amounts of information but could adopt new technology more quickly. The team had found a pressing problem they could solve, and committed to developing the leading AI solution for lawyers.
Introducing Paxton.ai: The all-in-one legal assistant
Fast-forward to the present, Tanguy is building Paxton, an all-in-one legal assistant that enables solo and single GP law firms to accelerate research, drafting, and document analysis with the power of AI.
Small firms and independent lawyers spend a large amount of time on laborious, low-value work. Unlike large firms, who focus on increasing billable hours, small firms are most interested in being able to better serve existing clients, do more business development, and gain more time in the day. Paxton helps these firms accelerate time-consuming tasks so that they can 10x productivity and spend more time on strategic, high-value work.
In contrast to generic generative AI solutions, Paxton is built specifically for legal use cases. It’s trained on over 150 million legal documents, and includes industry-specific features such as citation maps and client documents management. Paxton recently achieved a 94% average accuracy score in the Stanford Legal Hallucination Benchmark, which evaluates legal AI tools ability to produce correct legal interpretations without errors or “hallucinations.”
From Wall Street to Main Street
Though the team initially set out to solve regulatory compliance for large banks, they soon found that the long sales cycles and barriers to entry inherent to banking were making it difficult to close deals. They not only needed some early revenue wins, but also active users that could provide feedback for product development.
Tanguy and co-founder Mike Ulin had joined Unusual Academy to help them refine their value proposition and ensure they had product market fit. When exploring their challenges, John Vrionis, Managing Partner at Unusual Ventures, pushed the co-founders to explore the question: “What does your startup do that your customers are desperate for?” The team realized that instead of focusing on what they were building, they needed to focus on who they were building for, and what problem they were solving.
Tanguy soon discovered that their solution could also support small law firms, who had a pressing need to digest large amounts of information, an imperative to eliminate inefficiencies, and– unlike banks–the agility to adopt new technology quickly.
User feedback, early and often
Paxton decided to begin offering its product to solo and single GP law firms for free in an effort to accelerate momentum and gather user feedback. The solution resonated with the audience immediately, with many firms quick to adopt Paxton into their workflows and begin paying for the solution. Furthermore, the team were able to gather insights on the data sources, features, and functionality needed to support the audience.
Tanguy explains, “Product Led Growth is a great way to build a startup. The feedback from our customers has been the single biggest driver of features we've implemented in Paxton. This has helped shorten our iteration cycle significantly.”
In the last nine months, Paxton has achieved 14x growth in monthly recurring revenue and an 8x increase in active customers. They’ve raised a $22M Series A funding round, which they’re using to accelerate their mission to empower legal professionals. To learn more, check out their website at paxton.ai.
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