Although AI is now being used across industries from healthcare to customer service, nothing has come close to matching the popularity and financial success of AI-powered code generation. Jack Newton, co-founder and CEO of Clio, a Canadian legal practice management software company, believes that legal technology is set to become the next major beneficiary of the large language model revolution. That’s a self-serving assertion from legal tech firm Clio, yet the figures are difficult to ignore. The company experienced a sharp acceleration in revenue growth after adding AI capabilities to its platform in 2023. In mid-2024, the company exceeded $200 million in annual recurring revenue (ARR). It doubled that amount by the end of last year and has now announced that its ARR has hit $500 million. “LLMs are incredibly well-suited for coding because the world’s entire existing codebase serves as a massive training dataset,” Newton said. The parallel to the legal field is crystal clear. Law firms possess vast collections of contracts and agreements, offering a valuable trove of text-based data for AI models to train on. “Tech companies and lawyers alike are recognizing what a huge amount of upside there is for legal with LLMs,” Newton said. Clio is not the only legal tech company experiencing explosive revenue growth fueled by AI. The four-year-old Harvey, which provides LLM-powered AI for law firms, reached $190 million in ARR by the end of 2025, according to co-founder and CEO Winston Weinberg on LinkedIn. Last month, Harvey’s primary competitor, Legora, revealed it had hit $100 million in ARR just 18 months after launching its platform. While the legal tech sector’s definition of ARR has faced recent criticism, the potential for applying AI to law is evident, as LLMs can streamline the profession’s most labor-intensive work, including document review and drafting. Beyond legal tech firms, others are also acknowledging AI’s significant value for lawyers. Earlier this week, Anthropic unveiled a range of new legal-focused capabilities, further enhancing Claude for Legal—the specialized legal plugin whose launch earlier this year caused legal tech stocks to plunge. Both Harvey and Legora use Claude as one of their foundational models, creating an awkward tension: a major supplier has now become a direct rival. For Newton, these developments signal the enormous opportunity that lies ahead in the legal AI sector. He has cause for optimism.
