AI is now being applied to everything from healthcare to customer support, but no single use case is yet as popular or lucrative as writing code.
Jack Newton, co-founder and CEO of Clio, a Canadian law firm management software company, is confident that legal technology will be the next winner in the LLM era. That’s a self-serving argument for 18-year-old Clio being a legal tech company, but the numbers are hard to ignore.
Clio saw its revenue growth accelerate dramatically after integrating AI into its products in 2023. The company topped $200 million in annual recurring revenue (ARR) by mid-2024, doubled that figure by the end of last year, and recently announced that ARR had reached $500 million.
“The LLM is great for coding because it’s a huge repository of all the existing code in the world to train from,” Newton said. “The analogy with the law is really clear.”
Law firms have vast amounts of contract and settlement material, providing a rich text-based data base for AI models to learn from.
“Technology companies and lawyers alike are recognizing how beneficial an LLM can be on the legal side,” Newton said.
Clio isn’t the only legal tech company seeing huge revenue surges driven by AI.
Fourth-generation Harvey, which provides LLM AI to law firms, has achieved ARR of $190 million by the end of 2025, co-founder and CEO Winston Weinberg shared on LinkedIn. Harvey’s main rival, Legora, announced last month that it had achieved $100 million in ARR in just 18 months since launching its platform.
but The legal tech community’s definition of ARR has come under scrutiny recently, and the opportunities for applying AI to law are clear. Considering that an LLM can automate some of the most time-consuming tasks in the field, such as reviewing and drafting documents.
Legal technology companies aren’t the only ones recognizing how valuable AI can be for lawyers. Earlier this week, Anthropic announced a new suite of legal features that expands Claude for Legal. This is a law-focused plugin that sent legal tech stocks tumbling when it debuted earlier this year.
Harvey and Legora rely on Claude as their core model more than anything else, which makes for an uncomfortable dynamic. Your major supplier is now also your competitor.
To Newton, this is all a sign of the enormous potential of the legal AI market. He has reason to be optimistic. Canada-based Clio was valued at $5 billion when it raised $500 million in Series G last November. The company provides time tracking, invoicing, and payment tools for law firms. With last year’s $1 billion acquisition of data intelligence platform vLex, lawyers can now use Clio’s AI for research as well.
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