Legora raises $550M Series D at $5.5B valuation, bringing AI to Big Law M&A and enterprise legal teams

about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and mediumsiz businesses. And without further ado, let's bring in Max from Lora. He's the co-founder and CEO. Max, welcome to the show. Thank you so much for taking the time to come chat with us on such a busy day.

What's happening? Give us the news. What happened?

Well, we cooked. We cooked. Let's go. We went to San Francisco. We raised around.

How much did you New York?

Raised $550 million.

That's a big Bertha of all gongs. Fantastic. Like the sales department here in theora.

I love it. I love it. So, what's the key to growth? Is there a particular type of law firm that's you're seeing traction with? Is it up market, large, small, everything, direct to consumer? Like where is the business today?

Well, let's talk about law firms. I think the excite, you know, the the thing that sort of distinguishes the law firm market is that if a firm down the street starts operating with Lorraa, they're able to offer faster and better services and so every firm has to adopt it. The equilibrium breaks and that's why we've seen a astronomical surge in our law firm demand. But at the other side of the coin, you have the enterprises, the legal departments who are starting to figure out that we might be able to leverage AI to cut down costs to operate more effectively.

And so we're really seeing value on both sides of this equation. And as you know, we started Legora in Stockholm, Sweden less than three years ago. And now we're in the US calling in office in New York. We've just opened up in Houston and Chicago. And so in Texas,

lot of law firms there doing oil and gas, the legal oil uh down there.

Okay.

So are there any specific trends in in industry or is it more like uh you'll do litigation versus something else like like like where have you uh found the most success? Where is AI advancing the work of lawyers most uh acutely? So I'd say we've we've had the most traction in M&A and corporate departments, but quickly we have actually started to see a a real verticalization. So within private equity, within pharma, within big tech companies, within real estate construction, right? Um the way that lawyers well, I actually think it's it's similar to software coding. So, you know, Legora used to be kind of a co-pilot and you used to work with it as an assistant back and forth, but now with the latest model release with Opus 4.5, GPD 5.4, like we're starting to move into a world where can autonomously go out and perform tasks on your behalf and that's working across every single legal vertical.

Yeah.

How do lawyers feel about AI? Are they having an existential crisis in the way that software some software engineers

are saying I don't do the thing that I'm I'm not the craftsman that I used to be.

Like how are they actually processing it?

I I think it's you know the entire range of emotions from holy [ __ ] this is incredible and I've never seen anything like it to huh um I'm really going to have to figure out how my business model is going to work for this task that I used to bill hourly for. And if you look in the law firms, right, the way that they're typically structured is um you underbill for the partners, right, and you overbill for the associates.

And that model is starting to get uh questioned uh by the by the um by the buyers. And so clients are demanding the use of AI and shows of more effectiveness in the way that services gets delivered. And of course, the Kora is part of the you know answer there. uh every once a week somebody like is making the kind of statement or or putting out the idea that uh what are all these legal AI tools doing? I can get the same results from a chat GBT or Claude or Gemini. What's your answer there? I'm assuming that came up during the fund raise as to why why this isn't, you know, a thin wrapper. or I have my own ideas, but I'd be curious how how you talk about that.

Sure. I mean, it was the same week that we went out to the market that uh Claude dropped their legal plugin. And I actually think it was a fantastic showcase of, you know, here's some of the capabilities that the models can actually do. But in the same way that just taking the model and throwing it at a problem sort of doesn't work if you're going to run a $10 million M&A process. There's a lot of scaffolding. There's a lot of enterprise software. There's permissionings. There's sort of ethical walls that you need to respect. There's the way that you work with the firm's internal data with external legislation and with case law. Like there's just so much more that you need to do around the models to put them in a context where they can be useful. I think with the latest developments, we are actually needing to build less of the guard rails like the harnesses that we can put the models in are improving. So we can sort of take the model, we can put them in an environment where they can be successful and then we you know to quote you let let it cook right and we give the model access to the relevant tools to go and solve problems in that legal business context and then we sort of let it go out and plan and execute on that task. Do you uh have the internal teams been a lot more a aggressive to date than than uh let's say like big law just because they're they're not like running a business, they're just like providing an internal service and is was that something that you had kind of always expected? So, so I think the the big law was really quick to adopt and over the past two years, we've seen a real exponential step function in sophistication and complexity of the use cases that they're solving, right? Like back in 2023, somebody would get a clap on the on the back for summarizing an email with AI, but now you're running an entire M&A like endtoend process using Lora. And so, the expectations are increasing. And I'm actually seeing things like adding AI as part of the career frameworks within law firms to get promoted. I'm seeing AI be part of the interviewing process, right? Like it's now a skill that is required to deliver real work. Um, I think the enterprise departments have been patiently looking at sort of what are our law firms doing and now they're starting to to follow on and

one of one of our last uh developments is something we call the LGora portal and the portal is basically like you know Figma for for lawyers like they can collaborate and come into a multiplayer space where they can work together and recently one of the big firms we work with here in the in New York Deavo started working with clients like Blackstone GSK like on that portal. And I think that's really exciting because the way that these legal teams have collaborated have, you know, looked like the early '9s and now we're pulling that into the age of AI.

Very cool.

Are you seeing pull from in-house councils or is that a completely separate market?

No, absolutely. You know, we work with

That's what I was saying. They are seeing much traction because because if you're if you're inhouse council, you're overworked. You're not billing by the hour. You just get a salary. you have a team, you want to make your team as efficient as possible. You would adopt as you you want you have a greater incentive to adopt as much AI as you can faster because you're not dealing with your business models needing to adapt as well.

How far away are we from Microsoft's in-house council using Lora to acquire Activision directly and Activision's in-house council just uses Lora as well? This is a great question. Like we're actually working with some very large enterprises who are leveraging Legora to do um more of the M&A process themselves. Y

before you know engaging

but I think it's it's also an opportunity for firms to be very proactive and to actually invite them into their software environments and to go hey

AI can now do these tasks.

Sure.

So we're going to help you our client make that transition.

Yeah.

Right. I I I we have this framework internally where like if AI can do a task, it will do it.

Like that task has been conquered.

It's within the spider shark that anthropic release, right? Like

spider

humans, right? Like you saw that like the blue red.

Yeah. Yeah.

Right. Like it's no longer a task that humans should be spending their time on.

Yeah. And I think the challenge is that this is all moving so fast and people aren't used to doing their work and disrupting themselves at the same time. So, you know, we have the software on one piece, but then we actually have a hundred lawyers on staff at Lora called legal engineers that partner with our clients and we really pioneered this concept, right? It's forward deployed lawyers in a way

and they work with all our big enterprise and big law firm clients on transitioning the way that they do business.

What are conversations like on law school campuses today? How are they processing all the progress?

Yeah. Well, so Lor actually has a university program which is really exciting and so if you're a law school student listening to this, you should be part of the university program and you should learn this, right? It's going to be a skill that firms will look for. It's going to make you more attractive on the job market. And I think we are quickly going to enter a world where you're spending more time reviewing work that AI is doing for you than doing it yourself,

right? Like that's what's happened to software engineers. That's going to happen in law. And so the best thing you can do as a young professional is to get there really quickly.

That's great. Anything else, Jordy?

Wild times. Thank you so much for taking the time.

Time. Thank you so much for having me. I'm sure you're gonna be back on with the billion dollar raise soon enough.

I'm sure. I'm sure. Well, we will talk soon.

Max, great to get up. Congrats to the team.

Goodbye.