Ryan Daniels (left) and John Sarihan (right) cofounded AI law firm Crosby in September 2024. Today about 100 companies are clients using it AI to review contracts and get deals done faster.<\/p>\n
Crosby<\/p>\n
Ross Weiser isn\u2019t like most lawyers. Rather than spending hours digging through documents and responding to client emails, on a typical day he oversees a swarm of AI agents. After they\u2019ve combed through contracts and marked them up with comments and suggestions, he\u2019ll review the agents\u2019 work, addressing legal nuances they missed and making sure they haven\u2019t made anything up. Then Weiser works with a team of AI researchers, suggesting tweaks to prompts and explaining why one AI-generated answer is better than another from a legal standpoint. <\/p>\n
Six months ago, Weiser joined Crosby, an entirely new type of law firm where a suite of AI agents and 30 lawyers collaborate to speed up reviews for commercial contracts like services agreements, data processing agreements and NDAs. The gig is wildly different from Weiser\u2019s previous job as an associate at storied law firm Sullivan & Cromwell. While the firm rolled out ChatGPT to help with legal work, he found the chatbot unhelpful for complex tasks and frustrating to work with. <\/p>\n
\u201cIt felt like with some more prompting, maybe I could get it to give me what I want, but I didn’t have the time for that because you\u2019ve got to bill your hours and you’ve got deadlines,\u201d he tells Forbes. <\/p>\n
Now there\u2019s no need to bill hours at all. Instead, Crosby charges by the contract, which its AI agents can review in a matter of hours instead of days or weeks, with a human lawyer to do a final check. The idea is to align the firm’s financial incentives with those of its clients: closing deals faster. \u201cThis is I think the most dramatic change for lawyers in a hundred years,\u201d says CEO Ryan Daniels, a former lawyer who worked as in-house counsel for over a decade at multiple AI startups. He cofounded Crosby in September 2024 with ex-Ramp engineering manager John Sarihan. <\/p>\n
The nascent law firm is already servicing about 100 clients, including buzzy AI startups like Cursor, Clay and Cognition as well as massive companies like real estate firm Tishman Speyer ($64.4 billion in assets under management). Its agents have reviewed 13,000 contracts to date and revenue has grown about 400% since October. On Monday, the startup announced that it 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 venture capitalist Elad Gil. The startup, which moved into its headquarters on Crosby Street in Manhattan\u2019s SoHo neighborhood a month ago (the name is a coincidence), is now valued at $400 million, according to a person familiar with the deal. <\/p>\n
At its core, Crosby is upending the way traditional law firms work. Under the current hourly billing model, lawyers tediously track their work in six-minute increments and send multiple invoices for each contract \u2014 a set-up Daniels calls \u201ctaxing.\u201d Instead, Crosby charges anywhere from $250 to $1,000 per contract, roughly based on the number of pages, about $10 to $50 per page. (Traditional law firms price basic contract reviews similarly but can charge up to $3,000 for complex ones, according to legal insights site Mondaq<\/a>.) It also bills its customers only once regardless of the number of times a contract is reviewed. Daniels calls Crosby a \u201cneofirm\u201d \u2014 a services business built for the AI era from the ground up. <\/p>\n \u201cThis is I think the most dramatic change for lawyers in a hundred years.\u201d\n<\/p>\n Ryan Daniels, CEO and cofounder of Crosby<\/p>\n But its real differentiator isn\u2019t affordability or even its use of AI. It\u2019s speed. <\/p>\n Crosby typically starts working with startups that have no lawyers at all or only one in-house general counsel. A customer can send contracts to Crosby through Slack or email at any time of the day (or night). Contracts automatically get uploaded to a central system called Bailiff that also stores relevant documents like agreement templates, policies, basic guidelines and rules. <\/p>\n Then Crosby\u2019s suite of eight AI agents, built on top of models from OpenAI, Anthropic and Gemini, gets to work reviewing the contract. Each agent handles a different part of the negotiation process: pulling relevant context from past contracts, proposing changes to specific words or phrases or generating comments explaining the revisions. Once the AI system goes through the document end-to-end, it generates a confidence score and passes it on to a human lawyer to clean up the areas that need work. That all happens within a few hours. <\/p>\n A feedback loop is built in. The agents are trained on thousands of anonymized contract reviews and 50,000 clauses that were hand-labeled by the company\u2019s in-house lawyers. With every clause and contract they review, the agents hone the \u201cart of lawyering,\u201d Daniels says. That in turn helps reduce the back and forth between counterparties. <\/p>\n For fast-moving AI startups moving at breakneck pace, Crosby is a natural fit. AI coding startup Cursor has used Crosby to review 2,000 contracts, cutting review time by about 50 percent. At a CEO retreat hosted by Index Ventures last summer, Daniels was able to sign three AI startups as customers, including voice AI outfit Cartesia and ex-Twitter CEO Parag Agrawal\u2019s AI search infrastructure startup Parallel. <\/p>\n \u201cA lot of our clients are small startups that don’t have legal, and their option is to either do it themselves with Google or ChatGPT or hire an expensive law firm that’s going to charge $500 or $1,000 an hour. And by the time they’re done negotiating, any profit from that deal is already eaten up by the legal fees,\u201d says Weiser. <\/p>\n \u201c[Crosby is] by far the fastest turnaround, most conducive to the pace of our business relative to anything else we have tried.\u201d\n<\/p>\n Lainie Yallen, founding member of Simile<\/p>\n Simile, an AI startup that\u2019s building digital simulations of people for market research, leans on Crosby to review agreements with its data and model providers as well as enterprise customers. Lainie Yallen, who leads the startup\u2019s go-to market strategy, says Simile has seen 28x revenue growth in the last six months. She needs a legal team that can keep up. \u201c[Crosby is] by far the fastest turnaround, most conducive to the pace of our business relative to anything else we have tried,\u201d she says.<\/p>\n Contract review is fairly repetitive work that is often offshored, making it ideal for automation. A few months before starting Crosby, Daniels visited legal process outsourcing firms in India. He saw incredible demand for faster and cheaper legal services. The global legal services market will hit about $1.1 trillion in 2026, according to market research firm Mordor Intelligence<\/a>. \u201cI think the thesis of \u2018could you go after legal labor spend\u2019 is the right one,\u201d says Lux Capital partner Brandon Reeves who co-led the round. <\/p>\n It\u2019s a massive opportunity that other startups have latched onto as well. In February, British AI-powered law firm Lawhive raised $60 million to expand in the U.S. In January, San Francisco-based startup Ivo raised $55 million to sell AI tools to in-house legal teams at firms like Uber and Shopify for contract review. Perhaps the largest threat to Crosby: Anthropic launched its own legal plugin tool to Claude Cowork which can also review contracts. But unlike these companies, Crosby is a registered law firm, which means it\u2019s liable for each contract. Daniels is the sole proprietor, a risk that he doesn\u2019t see the frontier AI labs taking on. <\/p>\n \u201cI don’t want to rely on silicon computers. As smart as they are… I still want to rely on humans that I know and have trust and confidence in.\u201d\n<\/p>\n Robert J. Couture, senior research fellow at Harvard Law School’s Center on the Legal Profession.<\/p>\n Crosby is also distinct from legal AI startups like Harvey<\/a> and Legora<\/a>, which sell software to traditional law firms that bill by the hour and aren\u2019t incentivized to be more efficient with their time. \u201cProfits-per-partner is the key metric that law firms measure themselves by,\u201d says Daniels. In 2024, the top 100 American law firms recorded $69 billion in net income, according to Law.com<\/a>. That cash goes into partners\u2019 pockets instead of being reinvested into research and development because \u201cit was all about human capital, attracting, training, retaining the best partners,\u201d he says. But now AI can do much of the repetitive work. <\/p>\n Big law firms are aggressively investing in AI tools, seeing them as a competitive advantage to take on more clients, says Robert J. Couture, a senior research fellow at Harvard Law School’s Center on the Legal Profession. While young associates fresh out of law school won\u2019t have to do as much mundane work, he believes law will remain a human-first profession. \u201cFrom the client’s perspective, they have to have confidence that the law firm stands behind everything that they do,\u201d he says. \u201cI don’t want to rely on silicon computers. As smart as they are, and they’re brilliant today, and they’re only going to get better, I still want to rely on humans that I know and have trust and confidence in.\u201d <\/p>\n Couture doesn\u2019t see the billable hour going away any time soon, at least for larger firms doing sophisticated legal work. \u201cArtificial intelligence will change dramatically the way lawyers practice, but I don’t believe it’s going to have a significant impact on the business model of large law firms,\u201d he says. <\/p>\n As Crosby\u2019s AI agents improve, its system could partake in what Lux Capital partner and Crosby investor Grace Isford calls \u201cmulti-party autonomous negotiations.\u201d Each client could have their own set of agents that go back and forth and reach an agreement on their behalf. But for now at least, humans are still on the hook. <\/p>\n MORE FROM FORBES ForbesCursor Goes To War For AI Coding DominanceBy Anna Tong<\/a>ForbesThis 28-Year-Old AI Founder Thinks His Customer Service Startup Can Beat Out Companies 10x His SizeBy Rashi Shrivastava<\/a>ForbesThe Crypto Billionaire Betting $1 Billion To Build AI Based On The Human BrainBy Anna Tong<\/a>ForbesLegal AI Startup Legora Is In Talks To Raise Funding At A $1.8 Billion ValuationBy Rashi Shrivastava<\/a>ForbesLegal AI Startup Harvey In Talks To Raise $200 Million At $11 Billion ValuationBy Iain Martin<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Ryan Daniels (left) and John Sarihan (right) cofounded AI law firm Crosby in September 2024. 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