AI plugins for legal work sink stocks of legal tech firms
Big news in legal tech: stocks for major legal software and data companies fell on Tuesday, with some firms dropping more than 10% while others slid by around 10% or less, after Anthropic rolled out 11 open-source AI plugins for its Claude Cowork platform.
These tools are designed to automate everyday legal work, which could shake up how these companies make money.
Anthropic's legal plugin raises eyebrows
Anthropic's new Legal plugin can review documents, analyze contracts, flag risks, and help with compliance—all via simple slash commands.
This prompted concern among investors and analysts, especially since fewer software firms are beating revenue expectations compared to other tech sectors.
The AI avalanche
Companies like RELX and Wolters Kluwer fell more than 10%, while Thomson Reuters and LegalZoom slipped around 10% or more. Even startups like Harvey AI could feel the pressure.
As Stephen Yiu, CIO of Blue Whale Growth Fund, put it: "This year is the defining year whether companies are AI winners or victims, and the key skill will be in avoiding the losers."
The message is clear—AI is changing the game fast.