Happy Monday. This is Allie’s Alexandra Sternlicht.
Today, we share the law LLM Harvey raised $300 million in Series E at a $5 billion valuation. The company sells lawyer AI solutions, listing large law firm clients such as Paul, Weiss, and the in-house legal departments of major companies including KKR and PWC. With the help of new funds, Harvey plans to double its total to expand its global reach and diversity to new professional services such as tax accounting.
“If you scale as fast as we do, you just need to do a pay raise like this,” said Winston Weinberg, CEO, co-founder and attorney. Although Harvey is only three years old, it has more than 340 employees in 53 countries.
The E series is co-led by Kleiner Perkins and Coatue. It counts Sequoia, GV, DST Global, Conviction, Elad Gil, Open AI Entrepreneurship Fund, Elemental, SV Angel, Kris Fredrickson and Rev (VC Group Lexisnexis owner Relx Group) as participants.
On Friday, I was delighted to visit Harvey’s stylish Park Avenue New York City headquarters. It’s full of lawyers. Lawyer in the kitchen. The lawyer rotates with an ergonomic chair. The lawyer smiled and waved at me.
Although Weinberg CEO noted that attorney staff are unique to the company’s New York office, with only 18% of the number being attorneys, he believes these attorney employees are crucial to achieving Harvey’s goal of “cooperating” with the industry. So far, the strategy is working: Harvey has 337 legal clients.
Entrepreneurs were trying to make AI lawyers a thing before Openai released its first Chatgpt robot. These companies failed to a large extent. Harvey did not fail in the investor’s account.
“We’ve seen the company perform very well in all aspects,” Ilya Fushman and Harvey’s B and C series B and C for Kleiner Perkins told me. “It sets a blueprint for how vertical AI enterprise companies build and execute.”
Still, Harvey is just a solution to the crowded field of AI lawyers, aiming to undermine the $1 trillion legal market. Although this may be meaningless in the long run, with this funding, Harvey has lowered the public valuation of any legal AI startup. Competitor Ironclad raised the 2022 Series E at a valuation of $3.2 billion, and Clio raised $900 million Series F at a valuation of $3 billion.
Harvey’s technology is built on leading big language models, namely Openai’s Chatgpt, Claude’s Gemini, etc., and combined with data and workflows designed by lawyers and attorneys. It also provides a company-specific model by providing a company-specific data through its private technology-proprietary documentation. Although the security and privacy of customer data are obviously crucial on legal issues, Harvey Say that Comply with industry-accredited safety standards, conduct regular third-party testing, and insist that more than 10% of organizations are security professionals.
Attorney/MBA, Juan Pablo Sandoval Celis, who works on the company’s business development team, said clients have used Harvey to reduce legal processes from weeks to minutes.
Of course, law firms make money from the time they invoice to clients. Therefore, lawyers finding efficiency in Harvey could lead to huge loss of revenue for these law firms. Weinberg notes that certain legal work is increasingly billed through fixed fees, although some professional work will always be charged hourly. He also believes that widespread use of AI will increase lawyers’ work. “Unless you use a tool like this, I don’t think you will be able to compete or be able to support a large company,” Weinberg said.
See you tomorrow,
Alexandra Sternlicht
X: @ImSternlicht
e-mail: Alex.sternlicht@fortune.com
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