Artificial intelligence companies focused on legal services are reporting rapid revenue growth as law firms adopt large language model tools for tasks such as document drafting, contract analysis, legal research, and workflow automation, making legal technology one of the fastest-growing segments of the AI software market.
Clio co-founder and chief executive officer Jack Newton said the legal industry is positioned to become one of the major commercial beneficiaries of large language models, drawing comparisons between legal data and the vast code repositories that helped AI systems become effective at software development.
“LLMs are so excellent for coding because all the existing code in the world is a huge repository to train on,” Newton said. “The analogy to legal is really clear.”
According to Newton, law firms maintain extensive collections of contracts, agreements, and legal documents that provide large volumes of structured text suitable for AI training and automation.
“Tech companies and lawyers alike are recognizing what a huge amount of upside there is for legal with LLMs,” he added.
Clio Reports Accelerating Revenue Growth After AI Integration
Clio, which develops management software for law firms, said its growth accelerated significantly after integrating AI features into its products in 2023.
The Canada-based company surpassed $200 million in annual recurring revenue during mid-2024. By late last year, that figure had doubled to $400 million. Clio has now announced that its annual recurring revenue has reached $500 million.
Founded 18 years ago, Clio provides legal firms with software tools for time tracking, invoicing, payments, and workflow management.
The company was valued at $5 billion during a $500 million Series G funding round completed last November.
Clio also expanded its AI-related capabilities through its $1 billion acquisition of vLex last year. The acquisition added legal research and data intelligence functions to Clio’s platform, allowing lawyers to use AI tools for research tasks alongside administrative workflows.
Harvey And Legora Also Report Strong ARR Growth
Other legal AI companies are also reporting sharp increases in annual recurring revenue.
Harvey, a four-year-old startup that develops AI systems for law firms, reached $190 million in ARR by the end of 2025, according to co-founder and chief executive officer Winston Weinberg in a LinkedIn post.
Legora, one of Harvey’s main competitors, announced last month that it had reached $100 million in ARR only 18 months after launching its platform.
The legal technology sector’s use of ARR as a metric has recently faced scrutiny within the industry. However, AI’s application to legal work continues to attract investment and customer demand because large language models can automate time-intensive tasks such as reviewing contracts, drafting legal documents, and organizing case materials.
Anthropic Expands Legal AI Offerings
AI model providers are also increasing their focus on legal services.
Earlier this week, Anthropic announced additional legal-focused capabilities for Claude for Legal, its law-oriented AI product. The earlier release of Claude for Legal had already affected legal technology markets, contributing to declines in some legal tech stock prices.
Both Harvey and Legora use Anthropic’s Claude models as part of their platforms, creating a situation where Anthropic functions as both a supplier and a competitor to legal AI startups.
Newton said these developments indicate the scale of the market opportunity surrounding AI-powered legal software and services.
Featured image credits: Onit
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