The biggest promise of artificial intelligence in law is not that lawyers will work faster. It’s that companies will need fewer of them on the outside.
Wordsmith, a startup built around that bet, has raised $70 million in new funding to help corporate legal teams bring more work in-house and send less of it to law firms. The round, backed by Index Ventures, Highland Europe, and others, brings the company’s total funding to $100 million, which was raised in 24 months.
The company makes software to help in-house lawyers run their department. Wordsmith pulls in requests from tools like email, Slack, Microsoft Teams, and Salesforce, takes a first pass at drafting contracts and answering legal questions, and routes each matter to the right person.
Business has grown from the company’s founding days in Edinburgh, Scotland, said Ross McNairn, Wordsmith’s founder and chief executive. Today, its software is used by more than 500 companies, including legal teams at Canva, Financial Times, Safelite, Trip.com, and BT, a major British telecom company.
The early days of the legal artificial intelligence boom were defined by startups selling to law firms. Billions of dollars were poured into Harvey, Legora, and others, promising to make firms faster and more profitable. Some of those same companies have since expanded into corporate legal departments, with Harvey now saying in-house customers account for 40% of its business.
Instead of trying to play both sides, Wordsmith has chosen one: the companies trying to send less work to law firms.
McNairn’s argument is that a software company cannot credibly tell law firms it will help them become more profitable while also telling corporate legal teams it will help them rely less on those same firms. He said Wordsmith courted law firms in its early days, but later walked away from potential seven-figure contracts because he thought serving both sides created a conflict.
“I can’t really in good conscience serve the people that I’m diminishing the business of,” he said.
McNairn, a trained lawyer, left the practice after deciding that software could scale in ways legal work could not. He spent the next decade in tech, building and scaling startups in the travel sector. He sold his first startup, Dorsai Travel, to Skyscanner in 2014, then held senior roles at Skyscanner and TravelPerk.
A few years ago, McNairn arrived at OpenAI’s office for an early look at its technology, by invitation of an investor, General Catalyst. Afterward, he started building tools with OpenAI’s large language model inside TravelPerk. One early project helped triage an inbox full of travel changes and cancellations — work that previously required a team of people to sort, match to trips, and update in the system.
The tool took the queue down to zero overnight, McNairn said. It offered a window into what would become possible with the new technology.
Soon after, McNairn quit his job and began dreaming up what would become Wordsmith.
Index Ventures, whose early bets include Figma, Dropbox, and Slack, caught wind that McNairn was starting something new. Before he had fully left TravelPerk, he had a term sheet to fund the next company. Index has invested in every round since, McNairn said.
What looked like a narrow market when Wordsmith started has quickly become one of the hottest corners of legal tech. One of the furthest along is GC AI, which said it raised $60 million last year after growing annualized revenue from $1 million to $10 million in under a year. Wordsmith also competes with a wave of startups attacking a smaller slice of work — contracts — including Spellbook, Ivo, and SimpleDocs.
Is Anthropic a friend or foe?
Then there is the $1 trillion question hovering over every legal tech startup. What happens if Anthropic comes from behind and sweeps the market?
The company has rolled out dozens of agents that can perform one-off legal tasks, from reading contracts to writing policies, and says its agents can work across many of the software programs lawyers already use.
Its expansion has raised the question of whether legal teams need specialized legal software at all once their companies have deployed a general-purpose assistant across the organization.
McNairn argues that Anthropic’s push into legal is good for business. Tools like Claude, he said, give legal teams a taste of what artificial intelligence can do. Lawyers also learn the limits of using a broad-use platform to run a legal department.
His analogy is that sales teams do not abandon Salesforce because they have Claude, and finance teams do not drop their accounting systems because they have a chatbot. Legal teams, he said, still need a system that can route work, manage permissions, enforce playbooks, keep records, and show how decisions were made.
“Claude’s good for individuals doing individual jobs,” McNairn said. “Wordsmith runs the function.”
