Harvey Raises $550 Million at $15.5 Billion Valuation; Lawyers Bill 0.2 Hours to Read Press Release
The legal AI startup says its new Tenet model can draft a contract in seconds, which associates say they can now review for six hours.
SAN FRANCISCO — Harvey, the legal AI company, announced a $550 million funding round at a $15.5 billion valuation on Tuesday, and law firms across the country responded by billing clients for the time spent reading about it.
"It's a significant development in our industry," said a partner at an Am Law 50 firm, who recorded the announcement as a 0.2-hour entry under "Professional Development — AI Strategy" and applied it pro rata across 40 client matters. "Our clients expect us to stay current."
The round will fund Harvey's new proprietary model, Tenet, which the company says is trained specifically for legal workflows and can produce a first-draft merger agreement in under a minute. Firms that have deployed it report that the drafts are strong, that review of the drafts now takes slightly longer than drafting used to, and that this has been "fine for everyone."
"Before Harvey, an associate would spend eight hours on a first draft and a partner would spend two hours marking it up," said a chief innovation officer at one firm. "Now the draft takes one minute, the associate spends seven hours checking whether the minute was correct, and the partner still spends two hours. The client is billed for ten hours and one minute. The minute is billed at the AI rate, which we set."
Harvey's investors say the company is transforming a $1 trillion industry. Critics note that the billable hour is not so much being disrupted as "supplemented with a new line item," and that the firms most enthusiastic about the technology are the ones that have figured this out.
Harvey said the model is also excellent at summarizing long documents, and that several firms have used it to summarize the funding announcement, then billed for reviewing the summary.