October 4, 2023

Our Investment in Legal Karma

Elizabeth Piñón

We are extremely excited to announce our investment in Legal Karma, a legal platform that is making simple legal processes, like creating a will, a trust or forming an LLC, available through financial institutions. This gives banks, credit unions, and wealth managers more (off-the-shelf, white label) products to offer their customers while saving them time and money - which helps build stronger relationships with these customers. 

We have participated in the $2M million Seed round led by Everywhere Ventures, and were joined by SaaS Ventures, Forum Ventures, Amplify.LA, Altari Ventures, The LegalTech Fund, and Gaingels. The bigger vision goes way beyond estate planning - Legal Karma wants to eventually offer just about every common consumer legal service through its platform.

Why Now?

There is an enormous opportunity in estate planning: There is a pending generational transfer of ~$1T of wealth, and estate planning facilitates it. 

Legal Karma distributes their white-label services through Credit Unions, who in a high interest rate environment, are suffering from a decrease in membership. These institutions are keen to find new lines of revenue. Enter... Legal Karma.

As for credit unions, margin rates and membership are down and they need a new line of revenue as the government is outlawing some of their revenue streams, such as overdraft fees. According to IBIS World, “Trusts and Estates industry revenue has grown at a CAGR of 2.8% to $221.4 billion over the five years to 2023, including an estimated hike of 4.2% in 2023 alone”.

How Legal Karma Found Its Niche 

At first, Legal Karma naturally introduced its technology to law firms themselves, but sales call after sales call led to the same response: Efficiency actually means less billable hours so…no thank you.

Then, they found their lighthouse client, Desert Financial, a credit union already offering estate planning services for their members. They realized they could white-label their solution via credit unions’ banking platform, and bring more estate planning to their members and compete with lawyers instead of providing them with solutions. 

​​Why We Invested

Founders Kory and Mao showed a lot of ingenuity in the way they were approaching the market - engaging with financial institutions instead of law firms. And from a business perspective the opportunity was clear: 66% of Americans do not have an estate plan.

“Legal Karma has tapped into a complete vacuum in the legal services that financial institutions can offer - and get millions in returns from - all while bringing more affordable options to the average American. Most Americans think lawyers are too expensive, and direct-to-consumer sites are untrustworthy.” says Elizabeth Piñón, Partner at TheVentureCity. “With only 1 in 5,200 Credit Unions already doing this, and huge interest in their product, Legal Karma is going to be the goose that laid the golden egg for banks and CUs.”

Why Legal Karma Chose Us

"The support and attention that comes from TheVentureCity is like nothing we've received from any of our other investors. TheVentureCity really goes above and beyond to make sure we're getting our needs met and are focusing on the right efforts. It feels like a real partnership, not just a cap table addition.” Kory Kelly, CEO of Legal Karma.