Six Months to Pilot: How Parachute is Competing with Heavily Funded Legal AI Giants

When Dave Berner first came on Code Story back in Season 11, he was the CTO of Kinde, helping developers manage identity. Today, he’s tackling a completely different problem: democratizing legal AI for firms that have been left behind by enterprise-heavy solutions built for BigLaw.

The origin story of Parachute is refreshingly straightforward. Dave’s co-founder Ryan, an ex-lawyer who spent years at a major Australian law firm before starting his own boutique practice, experienced firsthand the pain point that sparked the idea: legal AI tools were being built exclusively for massive law firms. Small and mid-sized practices were forced to retrofit expensive, enterprise-grade software into workflows that were never designed for firms with 1 to 200 lawyers. With their third co-founder Vivienne bringing deep data science expertise, the trio realized they had the perfect combination to build something different.

Building AI-Native from Day One

What sets Parachute apart from the start is its foundational philosophy: be AI-native and stay lean. This isn’t a traditional software company trying to bolt on AI features. It’s a company built from the ground up to leverage what AI makes possible right now.

“The whole intention from day one has been to be as lean as possible and lean into what AI is making possible for us,” Dave explains. With a team of just 2.5 engineers (Dave counts himself as “probably half an engineer at this point”), they’re leaning heavily on Claude and other AI models, using tools like Codex for adversarial code review as they build.

This approach forced some interesting trade-offs early on. Coming off a seed round of $1.8 million AUD, they knew they couldn’t go out and hire a massive engineering team. The decision to stay lean meant being intentional about what they built versus what they bought. Dave’s engineering instinct always wants to build everything, but this time around, they deliberately chose to leverage existing tools for authentication and real-time collaboration rather than rolling their own.

“It’s always a trade-off because you’re including other people’s libraries,” Dave notes, “and when you go through compliance audits—we just completed our ISO 27,001—you have to justify all these additions. But it did enable us to speed up and get to market much quicker.”

Understanding Your Customer Better Than They Understand Themselves

One of Parachute’s smartest moves was hiring lawyers to do sales instead of trying to teach salespeople about law. The team now includes three lawyers who came from different facets of the industry—big law, boutique firms, and in-house legal. This wasn’t just a hiring decision; it was a product strategy.

“We decided it’s going to be easier to hire lawyers to do sales than it is to buy sales people and teach them about law,” Dave says. These subject matter experts become the voice of the customer, informing product decisions by sharing the real pain points they lived with every day.

But they don’t stop there. Every couple of months, Parachute runs in-person events in Sydney, Brisbane, and Melbourne, inviting 40-50 law firms to discuss what’s actually happening in the legal space. These aren’t product pitches—they’re genuine conversations about pain points. It’s how they stay connected to market needs as the industry evolves at breakneck speed.

The Roadmap: Drafting, Review, Advising, and Beyond

Parachute handles that first 80% of legal work that typically consumes the most time: drafting, document review, advising, and note-taking for client meetings. The product intakes emails and covers everything from the beginning of a matter through to completion and beyond.

For a space moving this quickly, Dave and the team have learned to build for adaptability rather than trying to predict massive scale. “The whole space is moving so quickly that we’re building mostly for being able to adapt and learn rather than thinking about massive scale in that same way.”

Learning Hard Lessons at Scale

But adaptability doesn’t mean avoiding mistakes. Dave is refreshingly honest about one that stung: their decision to localize AI inference to Australia.

“We decided we wanted to do as much as possible here, including AI inference,” he explains. “And it just went south really quickly.” The responses coming back from Australian-hosted model versions weren’t performing at the same level, and more critically, the throughput was restricted in ways their AI providers had assured them it wouldn’t be.

They tested everything locally and in staging. Production was a different story. When real users started hitting the system harder, the infrastructure couldn’t handle it. They ended up losing one of their biggest pilots—a painful lesson for the sales team who had worked hard to close that deal.

“There’s definitely a regret there,” Dave admits. “In hindsight, the confidence that we got from being told by the providers it’s going to be fine, combined with testing in those environments, meant we should have rolled it out slower. We should have tested with a few trusted firms first, especially not rolled it out to people on a pilot with us.”

But here’s the thing about startup life: the week after losing that customer, they landed another big one. The roller coaster keeps rolling.

Six Months In and Already Competing with the Big Players

What Dave is most proud of is how quickly they’ve earned a seat at the table. They started just before Christmas 2024, and within six months they were running pilots alongside some of the biggest, most heavily funded players in the legal AI space—companies that have been in the industry for years and have deep customer trust.

“For such a young, small company, that was just absolutely huge for us,” Dave says.

The Future: AI-Native Law Firms

The industry is moving toward AI-native law firms. Companies like Merit are already emerging from the US, and Parachute is positioned to lead that charge for the SME market. As AI capabilities continue to evolve and become more accessible, the competitive advantage won’t go to the companies that bolt AI onto legacy systems. It’ll go to the ones built from the ground up with AI at the core.

Dave and the Parachute team are betting that Australian law firms—and eventually law firms globally—will realize they don’t need enterprise software built for firms 10x their size. They need tools designed for them.

Want to hear more about how Dave is building Parachute, the mistakes they’ve learned from, and what’s next for AI in legal? Listen to the full episode of Code Story with Dave Berner. You’ll get the unfiltered story of building an AI-native product in a space dominated by legacy players, and how a small team is moving faster than companies with 100x the resources.