AI × Law

Legal AI giant Harvey has secured a $550 million funding round co-led by Diffusion and Lightspeed Venture Partners, pushing its valuation to $15.5 billion and ARR to $400 million. Chief Operating Officer Katie Burke stated the capital will primarily fund compute capacity and hiring to support global expansion and mid-market growth.

Italian startup Iusful secured €2 million in pre-seed funding led by United Ventures and Italian Founders Fund. The platform combines artificial intelligence with a network of qualified lawyers to provide accessible, ongoing legal services for Italian small and medium-sized enterprises.

A Connecticut judge sanctioned a pro se plaintiff in Elliott v. New York Bariatric Group for embedding hidden white-on-white text in filings intended to manipulate reviewing AI systems into agreeing with his motions. While revoking the plaintiff's e-filing privileges, the court affirmed that using AI ethically to assist in drafting court documents is acceptable provided lawyers and litigants verify the output.

India's Supreme Court held that any judicial decision relying on hallucinated material, even in part, is a subversion of the rule of law and must be set aside. The court established a policy of zero tolerance for unverified AI output, ruling that counsel citing fabricated case law commits professional misconduct while tribunals conducting independent, unverified AI research commit judicial ethical breaches.

Recent state and federal decisions are shaping the rules around AI discoverability, showing a split over whether AI prompts and outputs are protected work product. Notably, a federal court ruled that expert witness AI prompts are part of their methodology and fully discoverable under Rule 26.

A appellate court has issued a warning regarding fake citations and hallucinated content generated by AI in court filings. The court is currently considering punishing an attorney involved, highlighting growing judicial scrutiny over unverified AI usage in litigation.

Orrick deployed EverlawAI Assistant Coding Suggestions on approximately 10,000 documents in an IP litigation matter. The team reported a doc review cost reduction of over 50%, with human reviewers reversing only one non-relevant call made by the AI.

In ATG Capital Opportunities Fund v. Lane, the Delaware Court of Chancery relied on AI-generated meeting transcripts to assess board motivation where the transcripts diverged from official minutes. The ruling underscores discovery and evidentiary risks when AI notetakers create alternate records of sensitive corporate meetings.

The Administrative Office of the U.S. Courts updated the Judicial Conference on its federal AI initiative, which has prioritized over 60 AI-related issues across seven subgroups. The AO has issued interim guidance cautioning courts against delegating core judicial functions or decision-making to AI, while reminding users they remain fully accountable for AI-assisted work.

UK law firm Shoosmiths has deployed Project Apollo, a proprietary generative AI contract review platform built on Microsoft Azure. The tool compares draft contracts against firm precedents to flag deviations and provide auditable reasoning, aiming to reduce review times while acting as a training engine for junior lawyers.

Newly unredacted court filings in The New York Times' copyright lawsuit against OpenAI and Microsoft reveal internal communications where execs called scraping 'astonishing theft' and noted existential threats to publishers. The filings detail deliberate paywall circumvention, mass web scraping, and data showing Bing's Copilot reduced click-through rates to the Times by up to 93%.

E-discovery leader Relativity has rebranded its flagship platform RelativityOne to Relativity aiR, fully integrating its generative and agentic AI tools into the core offering. The company reported its AI tools have generated over 620 million results across customer matters in 2026, with non-litigation use cases now accounting for more than half of new customer workspaces.

Sydney-based legal AI startup Quillio raised A$1.3 million ($930,000) in its first outside capital round. The company intentionally bypassed venture capital funding as it builds AI tools to compete with established legal tech vendors.

Attorneys from Ellis George and K&L Gates were hit with $31,100 in legal fees and had their discovery relief denied after submitting briefs with bogus citations generated by AI tools including CoCounsel, Westlaw Precision, and Google Gemini. A Special Master in the Central District of California deemed the failure to verify citations tantamount to bad faith.

Legal practice management provider Clio has acquired vLex, integrating the platform's Vincent AI technology and extensive legal research database directly into its system. The acquisition aims to bring advanced AI-powered research, litigation analytics, and reasoning tools to Clio's law firm and enterprise customers.

Corporate legal departments at companies like Palo Alto Networks, Salesforce, and Mars have deployed custom AI tools to automate NDAs, draft compliance documents, and search internal legal knowledge bases. Realized outcomes include reducing contract turnarounds from days to a single day and cutting outside counsel spend on repeat research.

Latham & Watkins has purchased its own Nvidia servers to securely develop custom AI tools and process client data. The firm has also established standardized operating procedures and AI workflow guidelines, as well as a partnership with litigation data company PacerPro.

Regulatory AI startup Norm Ai raised $120 million in Series C funding led by Khosla Ventures, reaching a $1.2 billion valuation. The company operates alongside an affiliated law firm, Norm Law, which uses supervised AI agents and rejects the billable hour in favor of outcome-based pricing.

Australian law firm Allens, in consultation with Linklaters, has developed the Allens AI Australian Law Benchmark to systematically test LLMs on legal questions. The benchmark evaluates how market-leading models perform on Australian law to establish repeatable accuracy metrics for legal operations.

Alma, an AI-native law firm focused on immigration, has raised $17 million in Series A funding. The startup plans to use the new capital to support its in-house hiring and expand its technology-driven practice.