Whereas AI is now being utilized to all the things from healthcare to buyer assist, no single use case has but been almost as fashionable or profitable as code writing.
Jack Newton, co-founder and CEO of Clio, a Canadian regulation agency administration software program firm, is satisfied that authorized tech is poised to be the subsequent massive winner of the LLMs period. That’s a self-interested declare — 18-year-old Clio is a authorized tech firm — however the numbers are onerous to dismiss.
Clio noticed its income development speed up sharply after integrating AI into its offering in 2023. The corporate surpassed $200 million in annual recurring income (ARR) in mid-2024, doubled that determine by late final yr, and simply introduced that its ARR reached $500 million.
“LLMs are so glorious for coding as a result of all the prevailing code on the earth is a large repository to coach on,” Newton stated. “The analogy to authorized is admittedly clear.”
Regulation corporations maintain large corpuses of contracts and agreements, offering a wealthy foundation of text-based knowledge for AI fashions to be taught from.
“Tech firms and legal professionals alike are recognizing what an enormous quantity of upside there’s for authorized with LLMs,” Newton stated.
Clio isn’t the one authorized tech firm seeing a large income surge pushed by AI.
4-year-old Harvey, which provides LLM AI for regulation corporations, hit ARR of $190 million by the top of 2025, co-founder and CEO Winston Weinberg shared is LinkedIn. Harvey’s foremost rival, Legora, introduced final month that it reached $100 million in ARR a mere 18 months after launching its platform.
Though the authorized tech group’s definition of ARR has been under scrutiny recentlythe chance to use AI to regulation makes clear sense, on condition that LLMs can automate the sector’s most time-consuming duties, equivalent to doc evaluate and drafting.
Authorized tech firms aren’t the one ones recognizing how useful AI might be for legal professionals. Earlier this week, Anthropic introduced a suite of new legal-specific options, increasing Claude for Authorized — the law-focused plug-in whose debut earlier this yr despatched authorized tech shares tumbling.
Each Harvey and Legora depend on Claude as a core mannequin amongst others, which makes the dynamic an uncomfortable one: a key provider is now additionally a competitor.
For Newton, these are all indicators of the huge potential of the authorized AI market. He has cause to be optimistic. The Canadian-based Clio was valued at $5 billion when it raised a $500 million Collection G final November. The corporate supplies regulation corporations with time-tracking, invoicing, and cost instruments. It $1 billion acquisition of information intelligence platform vLex final yr now permits legal professionals to make use of Clio’s AI for analysis, as nicely.
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