Investment in startups using artificial intelligence for legal services has surged past one billion dollars this year, with firms continuing to attract capital despite broader market slowdowns. Companies working to automate tasks for lawyers and legal teams are experiencing a level of excitement reminiscent of ChatGPT’s rise, and investors are following the trend.
AI legal services investment, a company that only began two years ago, now counts eight of the ten top earning United States law firms as clients and has surpassed seventy million dollars in recurring revenue. Its rapid growth and more than five hundred million dollars in total funding have prompted increased competition, as other startups try to replicate its model and chase customization for clients.
Luminance, founded in Britain nearly a decade ago, has emerged as another leader in this expanding sector, with contract review tools that have helped the business grow its core revenue six fold since 2022. Unlike most competitors, Luminance relies partly on proprietary training models, a strategy that required a fresh seventy five million dollar boost from investors in February.
Legora, a relative newcomer, has already attracted two hundred fifty law firm clients across twenty markets, including some of the best known names in the field. General Catalyst and Iconiq fueled the company’s rapid international expansion with an eighty million dollar round in May, but Legora must find ways to stand out in a market where rivals pursue similar tech-focused strategies.
Eudia, which launched in January, has raised one hundred five million dollars to build software for corporate legal teams—skipping traditional law firms in its sales push. The company’s founder, Omar Haroun, previously exited a successful startup in the compliance industry and now faces the challenge of delivering on the buzz surrounding his new venture.
Rising Startups and Investor Interest
Supio, another fast-growing entrant, specializes in data organization for plaintiff firms, helping lawyers review complex records and draft legal documents more quickly. Its revenue quadrupled after a sixty million dollar fundraising round, but the company still trails EvenUp, which serves over a thousand law firms and holds twice as much capital.
Eve aims to make legal work less tedious for plaintiff attorneys, especially solos and small firms, and brought in forty seven million dollars at the start of this year. While Eve has succeeded in attracting early adopters, many lawyers in its target segment remain reluctant to overhaul their routines and adopt untested technology.
Spellbook, launched in 2018, has shown steady growth in annual contract value, a sign that legal professionals are willing to scale up their use of automated drafting and review tools. Although its last funding round closed more than a year ago, industry sources suggest the company is preparing for another significant injection of capital.
Paxton, focusing on small and medium sized law firms rather than the industry’s biggest players, achieved a fourteen fold increase in recurring revenue. The company faces lingering skepticism from firms hesitant to migrate their data to new platforms.
Other newcomers include Theo Ai, which raised over six million dollars and uses analytics to forecast litigation outcomes, and Marveri, which just emerged from stealth mode with three and a half million dollars for its due diligence platform. Both face seasoned, well funded rivals and must convince law firms to abandon familiar tools for these new offerings. For a broader overview of this rapidly expanding sector, see the recent analysis of legal tech startup funding.
