By Sara Merken
(Reuters) – With more and more lawyers at major law firms using fast-advancing generative artificial intelligence tools, legal AI startup Harvey said Wednesday that it raised $21 million in fresh investor cash.
Sequoia Capital, which is leading the Series A fundraising round, said more than 15,000 law firms are on a waiting list to start using Harvey. OpenAI Startup Fund, Conviction, SV Angel and Elad Gil also participated in the funding round, Harvey said.
Harvey, founded in 2022 and built on OpenAI’s large language model GPT-4, raised $5 million in a round led by the OpenAI Startup Fund last year. The company says it builds custom large language models for law firms.
Technology companies and investors have rushed to embrace large language model-based generative AI since Microsoft-backed OpenAI’s ChatGPT debuted in November. The models are trained on large, customizable data sets to produce text or other outputs that can closely mimic human creativity and analysis. Researchers used GPT-4 to pass the bar exam last month.
Global law firm Allen & Overy said in February that 3,500 lawyers and staff would use Harvey to automate some document drafting and research.
In March, accounting giant PricewaterhouseCoopers said it would give 4,000 legal professionals access to the platform.
Harvey co-founder Gabriel Pereyra and representatives for Sequoia did not respond to requests for comment on Wednesday.
Several other major firms have signed deals to adopt new AI products just in the past few months — a remarkable pace for a profession that was slow to abandon the fax machine.
“This is an arms race, and you don’t want to be the last law firm with these tools,” Daniel Tobey, chair of DLA Piper’s AI practice, said of AI products. “It’s very easy to become a dinosaur these days.”
DLA Piper is one of several large firms that has said it will use a new AI tool from legal research company Casetext, one of a growing number of established legal technology companies that have rushed to roll out generative AI-powered tools.
Casetext in March released its AI legal assistant product, CoCounsel, which uses GPT-4 to speed up tasks like legal research, contract analysis and document review.
Law firms Orrick, Herrington & Sutcliffe, which has about 1,150 lawyers, and Fisher Phillips, with more than 500 lawyers, are also using CoCounsel.
Some firms are developing capabilities in-house. Holland & Knight is creating an AI tool that it hopes will help lawyers review and modify credit agreements, partner Josias Dewey said.
Baker McKenzie has been baking large language models into existing services on a client-by-client “pilot” basis, according to Danielle Benecke, head of the firm’s machine learning practice.
Even law firms that are early adopters of AI are quick to say that testing and guardrails are needed to protect confidential client data and avoid errors, however, and others are still evaluating how and whether to use the technology.
“We’re being cautious and thoughtful, but with the recognition that we expect it to be a big deal, and that we will use it,” said David Cunningham, chief innovation officer at Reed Smith.
(Additional reporting by Karen Sloan)
