Whereas AI is now being utilized to every thing from healthcare to buyer assist, no single use case has but been practically as widespread or profitable as code writing.
Jack Newton, co-founder and CEO of Clio, a Canadian legislation agency administration software program firm, is satisfied that authorized tech is poised to be the subsequent large winner of the LLMs period. That’s a self-interested declare — 18-year-old Clio is a authorized tech firm — however the numbers are arduous 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 12 months, 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 planet is a big repository to coach on,” Newton stated. “The analogy to authorized is absolutely clear.”
Regulation companies maintain large corpuses of contracts and agreements, offering a wealthy foundation of text-based knowledge for AI fashions to study 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 affords LLM AI for legislation companies, hit ARR of $190 million by the tip of 2025, co-founder and CEO Winston Weinberg shared on LinkedIn. Harvey’s predominant 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 recently, the chance to use AI to legislation makes clear sense, on condition that LLMs can automate the sector’s most time-consuming duties, comparable to doc evaluation and drafting.
Authorized tech firms aren’t the one ones recognizing how worthwhile AI may very well 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 12 months 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 offers legislation companies with time-tracking, invoicing, and fee instruments. It $1 billion acquisition of knowledge intelligence platform vLex final 12 months now permits legal professionals to make use of Clio’s AI for analysis, as nicely.
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