While artificial intelligence is currently being integrated into fields ranging from healthcare to customer support, no single application has proven as broadly popular or financially rewarding as code generation. Jack Newton, co-founder and CEO of Clio—a Canadian company specializing in law firm management software—believes the legal industry is on the verge of becoming the next major beneficiary of the large language model (LLM) era. This is, admittedly, a self-interested perspective, given that Clio is itself an 18-year-old legal tech firm. However, the company’s financial results are difficult to overlook. After incorporating AI into its platform in 2023, Clio experienced a significant acceleration in revenue growth. The company surpassed $200 million in annual recurring revenue (ARR) by mid-2024, doubled that figure by late last year, and has now announced that its ARR has reached $500 million.

“LLMs are so excellent for coding because all the existing code in the world is a huge repository to train on,” Newton explained. “The analogy to legal is really clear.” Law firms possess vast collections of contracts and agreements, which offer a rich, text-based dataset for AI models to learn from. “Tech companies and lawyers alike are recognizing what a huge amount of upside there is for legal with LLMs,” he added. Clio is not alone in experiencing a massive AI-driven revenue surge. Harvey, a four-year-old company that provides LLM AI for law firms, achieved $190 million in ARR by the end of 2025, according to co-founder and CEO Winston Weinberg on LinkedIn. Harvey’s primary competitor, Legora, announced last month that it reached $100 million in ARR just 18 months after launching its platform. While the legal tech community’s definition of ARR has recently come under scrutiny, the logic of applying AI to legal work is clear: LLMs can automate the industry’s most time-consuming tasks, such as document review and drafting.

Legal tech companies are not the only ones recognizing the value of AI for lawyers. Earlier this week, Anthropic unveiled a suite of new legal-specific features, expanding its Claude for Legal offering—a law-focused plug-in whose debut earlier this year caused legal tech stocks to drop. Both Harvey and Legora rely on Claude as a core model, among others, creating an uncomfortable dynamic where a key supplier has now become a competitor. For Newton, these developments all point to the vast potential of the legal AI market. He has reason to be optimistic. Clio, headquartered in Canada, was valued at $5 billion when it raised a $500 million Series G in November. The company provides law firms with time-tracking, invoicing, and payment tools. Its $1 billion acquisition of data intelligence platform vLex last year now enables lawyers to use Clio’s AI for research as well.