Sequoia-backed Crosby launches a new kind of AI-powered law firm

The world of technology continues to evolve at an astonishing pace, and recently, there’s been a significant development in the legal sector that embodies this transformation. Crosby, a law firm backed by Sequoia, has emerged from stealth mode after securing a $5.8 million seed funding. This innovative startup promises to revolutionize the legal landscape by utilizing artificial intelligence (AI) not merely as a tool for lawyers but as the core of how legal services are delivered.

Crosby stands out in the crowded startup ecosystem. Unlike many companies that create AI software for lawyers to use, Crosby launches as an AI-powered law firm itself, delivering legal services with unprecedented speed and efficiency. The firm primarily focuses on contract-review services, which are essential for startups navigating the complexities of legal agreements. The approach is unique: Crosby employs lawyers trained to operate its custom-developed AI software, ensuring a seamless integration of technology and legal expertise.

One of the standout features of Crosby’s service is its promise to review contracts in under an hour, with aspirations to reduce this time to mere minutes in the future. John Sarihan, Crosby’s co-founder and CTO, emphasized this goal when discussing the firm’s innovative capabilities with TechCrunch. This kind of efficiency could be a game changer in a field where traditional contract negotiations often drag on for weeks or even months. For many startups, these delays have historically acted as bottlenecks, hampering growth and progress.

Ryan Daniels, the co-founder and CEO of Crosby, brings a wealth of legal expertise to the firm. Raised in a family of law professors and having honed his skills at Cooley, a leading law firm in the tech sector, Daniels understands the pain points faced by startups. His previous experiences as a general counsel for a growing company illuminated just how time-consuming contract reviews could be, often consuming resources that could have been better spent on strategic growth initiatives.

Daniels noted, “In my last company, the majority of my time was dedicated to legal matters, particularly reviewing contracts and service agreements.” This realization laid the groundwork for Crosby’s inception, born not just from a desire to provide legal services, but from a vision to transform these services into a more efficient, tech-driven process.

Today, Crosby employs around 19 individuals, combining the talents of engineers and lawyers to create a cohesive team. It soft-launched earlier this year and has already reviewed over 1,000 customer contracts for a variety of startups, including notable names like Cursor and sales automation firm Clay. The firm is quickly gaining traction as a go-to resource for companies needing rapid, efficient legal review.

The seed funding led by Sequoia Capital, with participation from Bain Capital Ventures and various angel investors from the tech industry, further underscores the confidence investors have in Crosby. Notable figures involved in this funding round include co-founders from various successful startups, highlighting the ripple effect of innovation that Crosby represents.

Leadership at Sequoia, including Josephine Chen and Alfred Lin, recognized the immense potential in Crosby’s model not only for its technology but also for its team. Chen specifically mentioned how essential it was to evaluate the founders, stating that in seed investing, the team comprises about 70% of their considerations. Given that the legal services market represents a staggering $300 billion landscape, the opportunity for disruption is substantial.

Chen’s commentary during the funding discussions reveals a distinctive pain point that many businesses face: the slow pace of contract negotiations. She articulated a vision for leveraging sophisticated technology in legal services, calling it “a bull’s-eye case for the use of LLMs (Large Language Models).” This mirrors a growing understanding across many industries of the potency that AI can provide in streamlining decision-making processes.

Crosby’s entry into the legal market represents a merging of technology and legal services that could redefine how businesses approach contract management. As startups and larger enterprises grapple with the complexities of contracts, Crosby’s model can not only save time but also allow businesses to focus on scaling and increasing their marketplace footprint.

In an age where efficiency and speed are paramount, Crosby stands as a lighthouse of innovation in the legal sector. The firm’s commitment to harnessing AI responsibly and effectively is not just a promise to its clients; it signals a broader shift in how legal practices can embrace technology to meet contemporary needs. With strong backing from seasoned investors and a visionary leadership team, Crosby is one to watch as it navigates the rapidly changing landscape of legal services.

As Crosby continues to expand its reach and refine its AI capabilities, its influence could extend well beyond its initial scope. The ongoing evolution of the legal profession, fueled by technology, holds great potential to reshape many aspects of business operations, making services faster, more accessible, and ultimately, more impactful. In this new chapter of legal services, Crosby is not just riding the wave of innovation; it is helping to steer the ship toward a more efficient, AI-powered future.

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