Paul Hastings Ex-Partner’s Startup To Cut Legal Costs By 75%
In an unexpected move from the realm of top New York law firms, Esther Chiang, a former partner at Paul Hastings who also spent time at Kirkland & Ellis, has launched SmartEsq, a startup designed to significantly reduce legal costs for private equity (PE) fund formation. Chiang explained that creating a new PE fund of around $1 billion can involve 2,000 hours of work, with fees exceeding $2 million. With her startup, which focuses on optimizing multiple key workflows, this can be reduced to 400 hours, resulting in a 75% reduction in legal costs to around $500,000.
“There will still be a lot of work to do, especially on the high-value side of things, but plenty of the process work will be absorbed,” she said. The company is co-founded with CTO Kristen Gandhi, an experienced engineer, and also includes Paul Patrow, another former BigLaw partner from Kirkland & Ellis, serving as its CLO. Chiang has a diverse background, having studied electronics and English before moving into law and specializing in high-ticket PE fund formation work.
She was inspired to create the new company after discussing the potential of AI in legal work at an IBA event in London. SmartEsq has developed multiple products to streamline the PE fund formation process, promising significant improvements over traditional methods.
SmartEsq cuts PE fund costs
“We have developed multiple products that help you through the whole process. This could change the paradigm [for PE fund formation],” Chiang said. The startup has secured some pre-seed funding and has a small team of about six people, with some beta testers in the market already.
This venture represents a notable shift in the elite world of New York law firms, which are starting to experience moderate disruption. The launch of SmartEsq is part of a broader trend, with other developments like the ALSP ClearyX from Cleary Gottlieb and AO Shearman’s legal tech incubator in San Francisco indicating a changing landscape. The question remains whether this startup will inspire other top lawyers to follow a similar path.
As professionals increasingly expect more from their careers, it’s possible that more senior lawyers might decide to launch legal tech startups, leveraging their client relationships. It will be interesting to see how this initiative progresses and whether it marks the beginning of a more significant transformation in the legal industry.
