Norm AI raises $120M at $1.2B valuation, combining a law firm with AI agents to serve financial giants

Buddy, buddy. The buddy.

Yeah.

Dog supply company. There's a bunch of words you could use. I don't know. Uh it doesn't seem like rocket science and yet it feels like a cat walked across the keyboard with some of these brands. Um anyway, go give it a try. Tell us what you think. Uh fortunately, we have our next guest in the waiting room. Let's bring in John Nay from Norm AI. Welcome to the show, John. How are you doing?

Doing well. Enjoyed that uh brainstorming session you just had on the naming.

Always. I mean, I don't come up with anything.

Do you ever get very far

for a dog bed company? I don't

Wait, tell us about the name norm. You just wanted to say, hey, you don't need to worry about this, you know, the general intelligence company of XYZ. We're just going to give you some normal AI. Is that the idea?

Yeah, just straight normal AI. Um, it stands for norm setting the norms uh for AI.

There you go. and also for normative for what should be.

Sure. When did you start the company?

Uh just under three years ago.

Okay. And what were the key inflection points that got you to today? How much did you raise? What's the news?

Yeah. So the news is today we raised um 120 million at 1.2.

Jordy hit that.

There you go. $120 million series C. Coastal Ventures is in valuations 1.2 billion. Not too shabby. Um, but what has growth been like? Who are the key customers? How are you describing the product to them?

Yeah. So, what we've done is we started out selling directly to in-house teams. So, places like Blackstone, New York Life, mainly large financial institutions.

Sure.

And as we were doing that, we realized the outside council opportunity was huge. So, they're spending billions of dollars on outside counsel. So this is for things like fund formation, transactional work, a lot of different um things they work with like Kirkland Ellis and Simpson Thatcher and other firms like that for and as you're working with them, we realized the opportunity of taking the legal AI agents that we were building and then having that power a law firm to be able to serve as outside counsel on those billions of dollars of spend that they're working on would be an amazing opportunity for us and then also to be more aligned with the clients that we already had.

Yeah. So, talk about the key decision to not just supercharge the in-house council with effectively a software product, but instead actually spin up a proper uh partnership, an L. You have an LLP, right?

So, Norm Law LLP. Yeah, it's a it's a partnership. It's a it's a law firm in all the traditional senses except it sits on top of AI agents that are automating a lot of the first pass of the work.

Yeah. And so that was a huge inflection point for us because it allows us to power something that can go full stack for the client. And this is actually sort of related to my past. So this is my second company. I was the founder and CEO of another AI company before this.

And I just have a proclivity of wanting to just like do the whole thing. In that case, it was an AI company that was selling AI to other asset managers. And I built out a subsidiary that registered with this SEC as an investment adviser. And then we just became an AI powered asset manager ourselves and just did the whole thing. And that company was acquired by TIA New. So here similarly we just want to complete the whole task for the client. So in collaboration with the partners at norm law. So we have people that were partners at the a lot of the AM law 20.

So they join and then they take the outputs from the AI agents and then they provide legal advice directly to their clients like they would have at another top law firm. But now they do it sitting inside of normal.

Mhm. And how how valuable is uh the data inside of the law firms versus inside of companies? Uh because I imagine that that has to be a source of strength, a source of emote uh and a big reason why venture capitalists continue to back the business.

Yeah. So the ability to have this vertical integration of the building of the AI and the other software with the using and deployment of it in that really tight feedback loop to iterate and improve it that's key. So that vertical integration type model and the data is a big aspect to that. So, it's both the data from the operation of the firm and what happens day-to-day, but it's also just like the qualitative insights about how would we automate something like this? Having root access to how it's actually being done and building it side by side where we're here in the World Trade Center and we have AI engineers sitting right next to lawyers doing their job. That type of feedback loop is invaluable and we're the only people in the world that can do that because of that really tight integration and collaboration. And so that unlocks our ability to kind of reinvent the whole workflow. So instead of having a co-pilot tool that you can use and get a little bit more efficient, you can from scratch think about from first principles, how would you redesign that workflow internally inside a firm and then just build that and iterate on it every day together. law stu law school student comes to you asking for advice

uh on how to think about their early career, what what do you tell them?

Well, I think the general principles of legal reasoning and thinking through things more like theoretically, that's still super valid and useful and that's almost just like philosophical thinking that's applicable in any area of life. But then in terms of going into specific areas, I think going forward, this notion of what we developed around legal engineering is going to be really important for them to lean into. So that's using their legal knowledge and legal reasoning, but then applying it using AI. So turning uh different workflows and different domains of legal expertise into AI agents and then testing them and validating them and deploying them and working super closely with clients around that. I think that's going to be increasingly what they should focus on.

Makes a lot of sense.

Uh how are you thinking about international expansion? Is that a is that something you sort of get for free as the model capabilities advance and the frontier advances or is that something that is a very considered decision at some point in the future because it'll be a significant burden to

you also get it for free because I'm sure some of the clients are already cross work border but

I'm just wondering like like how how heavy is that decision to uh to expand internationally? Yeah, I mean with the clients that we have now, places like Blackstone that are super international, uh we get that we get that opportunity, but we don't necessarily build it out because we we need to make sure that we have the legal expertise in those jurisdictions.

So when you're actually powering the full stack provision of legal services, that's another layer of complexity of this of of having the people that are going to be able to supervise that and put their name behind that and have that relevant expertise. So for us it is a big decision about when we go to for example the UK and other areas that are more relevant to us. Uh we need to do that very deliberately.

Makes sense. Well congratulations on the fund raise. Thank you so much for coming on the show. The whole team

have a great rest of your week

and thanks. It felt like we were on vacation for a little bit this view.

Are you really in the World Trade Center? You're in New York right now.

We're in the World Trade Center. That's uh New Jersey behind me.

That's beautiful. It looks like Miami almost with the plants and stuff. Uh anyway, enjoy New York. Enjoy the summer.

Have a great rest of your day. We'll talk to you soon. Goodbye.

Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.

Uh you got anything for me, John?

Well, the main uh other news is that uh this is this is somewhat related to New York and Manhattan. A Midtown Manhattan skyscraper under construction is reportedly at risk of collapse. The building was the former Fizer headquarters on East 42nd Street. It was evacuated Tuesday morning after the FDNY received reports around 8:00 a.m. Eastern time of bricks falling from the high-rise. When crews arrived, they found two structural columns inside the building had buckled with floors sagging from the roughly 21st all the way to the 26th floor. So, there's six floors of sagging. Uh this video this uh this building seems to be falling apart. Video from inside the site shows columns visibly bent raising immediate concerns about the stability of the building. So so far thankfully no injuries have been reported. Uh let's hope it stays that way and construction workers have been accounted for. The site was undergoing one of the most ambitious office to residential conversions in New York history. Metro Loft and David Warner Real Estate were converting the former Fizer complex into roughly 1,500 to,600 uh apartments with plans to renovate the existing 38tory tower and add more than a dozen new stories to part of the property. Officials have evacuated the construction site and are and nearby buildings as a precaution. Very, very crazy. City inspectors and engineers are now on site investigating the damage and trying to determine whether the building can be stabilized. They'll need to go and uh rebuild those columns. For now, commuters are being told to avoid the area. So, if you're in New York, stay away from East 42nd Street. I hope everyone is safe there.

Bad day to be doing that conversion.

Yeah. Very, very chaotic situation. Uh anyway,

it's also imagine trying to sell those apartments after you finish. It's like, oh yeah, moving into the building that was buckling

for six

across six different stories.

Yeah, there was a building. Was it in San Francisco? The Millennium Tower.

Yeah. TZ says, "Good day to be a demolition company,"

I guess. Yeah. The uh the Yeah, there was the Millennium Tower that was a very very It was It was a fancy high-rise in San Francisco and the foundation like sunk a little bit and so the whole building was tilted slightly and so if you put a marble on the ground in these like luxurious apartments, it would roll and uh there was a huge huge lawsuits. I believe that they were able to go do some structural reinforcement and eventually get it back. Just some saggy floors.

Just some saggy floors.

Floors.

Yeah. Lock in. Just uh Yeah, maybe it's just a mindset issue.

I'm sweating the details.

Okay. Uh what do you think of this? What do you think of this sunlight? Sunday Light. We've talked about these a few times. Philips launched one. I believe you're a big fan of these. I want your take on this one. This is the Sunday light. And Paul Backhouse says it's the closest thing to sunlight that you can buy. He gives it a 10 out of 10. He says, "No regrets. It's absolutely bonkers. For reference, this is my actual light at 80% brightness in a room with almost zero outside lights. So, I believe it's a it's a sort of translucent disc. Some of the light diffuses, but also a bunch of the light is reflecting, bouncing around, creating sort of a a softer feel, softer glow. Are you a fan of this with like the the light that hangs down? If you zoom in on the actual light, you will see that there's a there's a little stick and at the end of that stick is a light emmitting diode, an LED that's bouncing off of the disc, the larger disc there. Um, so a little bit more in your face. I'd be worried about hitting my head on that in the middle of the room there, but that's worried about hitting your head on, John.

But over over the right uh over the right table, maybe it works. the closest thing you can to sunlight you can buy. They use titanium nano particles to scatter the light way the the way Earth's atmosphere does. Actual blue sky on your ceiling. Uh 34,500 lumens water cooled 95 plus CRI which is a measure of color quality. Uh just purchased one uh to avoid any doubt reposted but I can't vouch for how yet it works. But this man is not sponsored but he's just stunned this exists. Are you going this or going into silence? Uh I I want to see more experiments like it.

Uh would you go for this one or the Phillips the one that uh doesn't have the dangling uh light?

I'm not actually a customer of either.

Yeah, but

considering it.

But I would be I would be curious to get one of these for the for the studio.

You get a couple of these and then a couple of the other lights. Put them headto head. See which one we want. Anyway,

uh well folks,

that's our show. That's our show.

Thank you so much for tuning in. Leave us five stars on Apple Podcast and Spotify.

Sign up for our newsletter, tbn.com, and we'll see you tomorrow at 11:00 a.m. Bang.

Goodbye. We love you. Have a great week.