While AI is now being applied to everything from healthcare to customer support, no single use case has yet been nearly as popular or lucrative as code writing.<\/p>\n
Jack Newton, co-founder and CEO of Clio, a Canadian law firm management software company, is convinced that legal tech is poised to be the next big winner of the LLMs era.\u00a0That\u2019s a self-interested claim \u2014 18-year-old Clio is a legal tech company \u2014 but the numbers are hard to dismiss.<\/p>\n
Clio saw its revenue growth accelerate sharply after integrating AI into its offering in 2023<\/a>. The company surpassed $200 million in annual recurring revenue (ARR) in mid-2024, doubled that figure by late last year, and just announced that its ARR reached $500 million.<\/p>\n \u201cLLMs are so excellent for coding because all the existing code in the world is a huge repository to train on,\u201d Newton said. \u201cThe analogy to legal is really clear.\u201d<\/p>\n Law firms hold massive corpuses of contracts and agreements, providing a rich basis of text-based data for AI models to learn from.<\/p>\n \u201cTech companies and lawyers alike are recognizing what a huge amount of upside there is for legal with LLMs,\u201d Newton said.<\/p>\n Clio isn\u2019t the only legal tech company seeing a massive revenue surge driven by AI. \u00a0<\/p>\n Four-year-old Harvey, which offers LLM AI for law firms, hit ARR of $190 million by the end of 2025, co-founder and CEO Winston Weinberg shared\u00a0on LinkedIn<\/a>. Harvey\u2019s main rival, Legora, announced last month that it reached\u00a0$100 million in ARR<\/a>\u00a0a mere 18 months after launching its platform.<\/p>\n Although the legal tech community’s definition of ARR has been\u00a0under scrutiny recently<\/a>, the opportunity to apply AI to law makes clear sense, given that LLMs can automate the field\u2019s most time-consuming tasks, such as document review and drafting.<\/p>\n Legal tech companies aren\u2019t the only ones recognizing how valuable AI could be for lawyers. Earlier this week, Anthropic announced a suite of new<\/a> legal-specific features, expanding Claude for Legal — the law-focused plug-in whose debut<\/a> earlier this year sent legal tech stocks tumbling<\/a>. <\/p>\n Both Harvey and Legora rely on Claude as a core model among others, which makes the dynamic an uncomfortable one: a key supplier is now also a competitor.<\/p>\n For Newton, these are all signs of the vast potential of the legal AI market. He has reason to be optimistic. The Canadian-based Clio was valued at $5 billion<\/a> when it raised a $500 million Series G last November. The company provides law firms with time-tracking, invoicing, and payment tools. It $1 billion<\/a> acquisition of data intelligence platform vLex last year now allows lawyers to use Clio\u2019s AI for research, as well.<\/p>\n