Ryan Daniels (left) and John Sarihan (right) founded the AI law firm Crosby in September 2024. Today, about 100 firms are customers using AI to review contracts and shut deals faster.
Crosby
ROss Weiser is just not like most lawyers. Instead of spending hours wading through documents and responding to customer emails, on a typical day he oversees a swarm of AI agents. After reviewing the contracts and providing comments and suggestions, he reviews the agents’ work, addresses any legal nuances they missed, and makes sure they have not made anything up. Weiser then works with a team of AI researchers, suggesting optimizations to prompts and explaining why one AI-generated answer is healthier than one other from a legal perspective.
Six months ago, Weiser joined Crosby, a brand new breed of law firm where a team of AI agents and 30 lawyers work together to speed up the review of economic contracts comparable to service agreements, data processing agreements and NDAs. The gig is fundamentally different from Weiser’s previous job as an associate on the renowned law firm Sullivan & Cromwell. While the firm introduced ChatGPT to assist with legal work, he found the chatbot unhelpful for complex tasks and frustrating to work with.
“It seemed to me that with a little more encouragement I could probably get what I wanted, but I didn’t have time for that because you have to bill your hours and have deadlines,” he says Forbes.
Now there isn’t a have to bill hours in any respect. Instead, Crosby hires a human lawyer to do the ultimate review of the contract, which his AI agents can review in a matter of hours fairly than days or perhaps weeks. The idea is to align the corporate’s financial incentives with those of its customers, thereby closing deals faster. “This is, in my opinion, the most dramatic change for lawyers in a hundred years,” says CEO Ryan Daniels, a lawyer who spent over a decade as an in-house lawyer at several AI startups. He founded Crosby in September 2024 with former Ramp engineering manager John Sarihan.
The young law firm already serves around 100 clients, including hot AI startups comparable to Cursor, Clay and Cognition in addition to large firms comparable to the true estate company Tishman Speyer ($64.4 billion in assets under management). Its agents have reviewed 13,000 contracts to this point and sales are up about 400% since October. On Monday, the startup announced that it has raised $60 million in Series B funding co-led by top-tier VC firms Index Ventures and Lux Capital, with participation from Sequoia Capital, Bain Capital Ventures and solo enterprise capitalist Elad Gil. The startup, which moved into headquarters on Crosby Street in Manhattan’s SoHo neighborhood a month ago (the name is a coincidence), is now valued at $400 million, in response to an individual conversant in the deal.
At his core, Crosby is popping the best way traditional law firms operate on their head. Under the present hourly billing model, lawyers painstakingly track their work in six-minute increments and send multiple invoices for every contract – a practice Daniels describes as “burdensome.” Instead, Crosby charges between $250 and $1,000 per contract, roughly based on the variety of pages, about $10 to $50 per page. (Traditional law firms charge similar prices for easy contract reviews, but can charge as much as $3,000 for complex contract reviews, in response to the legal insights website.) Mondaq.) Additionally, it only invoices its customers once, no matter how often a contract is reviewed. Daniels describes Crosby as a “neofirm” – knowledgeable services company built from the bottom up for the AI age.
“This is, in my opinion, the most dramatic change for lawyers in a hundred years.”
However, the true differentiator is just not affordability and even the usage of AI. It’s speed.
Crosby typically begins working with startups that don’t have any lawyers in any respect or only an in-house general counsel. A customer can send contracts to Crosby via Slack or email at any time of the day (or night). Contracts are robotically uploaded to a central system called Bailiff, which also stores relevant documents comparable to contract templates, policies, basic guidelines and rules.
Then Crosby’s suite of eight AI agents, based on models from OpenAI, Anthropic and Gemini, get to work reviewing the contract. Each agent handles a special a part of the negotiation process: drawing relevant context from previous contracts, suggesting changes to specific words or phrases, or generating comments explaining the revisions. Once the AI system goes through the whole document, it generates a confidence rating and passes it to a human lawyer who cleans up the areas that must be edited. This all happens inside a couple of hours.
There is a feedback loop in-built. Agents are trained on 1000’s of anonymized contract reviews and 50,000 clauses handwritten by the corporate’s in-house lawyers. With every clause and contract they review, agents hone their “art of advocacy,” Daniels says. This, in turn, helps reduce backwards and forwards between counterparties.
For fast-moving AI startups that operate at breakneck speed, Crosby is the proper selection. AI coding startup Cursor used Crosby to review 2,000 contracts, reducing review time by about 50 percent. At a CEO retreat hosted by Index Ventures last summer, Daniels secured three AI startups as clients, including voice AI company Cartesia and former Twitter CEO Parag Agrawal’s AI search infrastructure startup Parallel.
“Many of our clients are small startups without legal advice. They have the choice of either doing this themselves using Google or ChatGPT or hiring an expensive law firm that charges $500 or $1,000 an hour. And by the time they’re done negotiating, the profit from that deal has already been eaten up by legal fees,” Weiser says.
“[Crosby is] By far the fastest turnaround and most conducive to our pace of business compared to anything we have tried before.”
Simile, an AI startup that creates digital simulations of humans for market research, relies on Crosby to review agreements with its data and model providers and enterprise customers. Simile has seen 28x revenue growth within the last six months, in response to Lainie Yallen, who leads the startup’s go-to-market strategy. She needs a legal team that may sustain. “[Crosby is] “By far the fastest turnaround and most conducive to our pace of business compared to anything we have tried before,” she says.
Contract review is a reasonably repetitive work that is usually outsourced, making it ideal for automation. A number of months before founding Crosby, Daniels visited legal process outsourcing firms in India. He saw incredible demand for faster and cheaper legal services. According to a market research firm, the worldwide legal services market will reach roughly $1.1 trillion in 2026 Mordor Secret Service. “I think the thesis, ‘Could you go for legal work expenses?’ is correct,” says Lux Capital partner Brandon Reeves, who co-led the round.
It’s an enormous opportunity that other startups have also taken advantage of. In February, British artificial intelligence law firm Lawhive raised $60 million to expand within the United States. In January, San Francisco-based startup Ivo raised $55 million to sell AI contract review tools to in-house legal teams at firms like Uber and Shopify. Perhaps the largest threat to Crosby: Anthropic has introduced its own legal plugin tool for Claude Cowork, which can be used to ascertain contracts. But unlike those firms, Crosby is a registered law firm, meaning it’s accountable for every contract. Daniels is the only real owner, a risk he says the AI labs aren’t willing to take.
“I don’t want to rely on silicon computers. As smart as they are… I still want to rely on people I know and trust.”
Crosby also differs from legal AI startups like Harvey and Legora, which sell software to traditional law firms that charge by the hour and don’t have any incentive to make use of their time more efficiently. “Profit per partner is the most important metric by which law firms measure themselves,” says Daniels. In 2024, the 100 largest American law firms recorded net profits of $69 billion Law.com. That money goes into partners’ pockets fairly than being reinvested in research and development because “it was all about human capital, attracting, training and retaining the best partners,” he says. But now AI can do much of the repetitive work.
Big law firms are investing aggressively in AI tools, seeing it as a competitive advantage to draw more clients, says Robert J. Couture, senior research fellow at Harvard Law School’s Center on the Legal Profession. While young associates who’ve just graduated from law school will not must do as much day-to-day work, he’s convinced that law will remain a people-first career. “From the client’s perspective, they need to be able to trust that the law firm will stand behind everything they do,” he says. “I don’t want to rely on silicon computers. As smart as they are, and they’re brilliant today, and they’re getting better, I still want to rely on people I know and trust.”
Couture doesn’t expect the billable hour to go away any time soon, not less than not for larger firms that do sophisticated legal work. “Artificial intelligence will dramatically change the way lawyers work, but I don’t think it will have a significant impact on the business model of large law firms,” he says.
As Crosby’s AI agents improve, his system could take part in what Lux Capital partner and Crosby investor Grace Isford calls “autonomous multi-party negotiations.” Each customer could have their very own agents going backwards and forwards and making an agreement on their behalf. But not less than for now, persons are still on the hook.
