A new AI-powered legal startup backed by Sequoia Capital is rewriting how contracts are reviewed, by building a law firm around the software itself.
Lawyers Using AI To Deliver Services To Clients
Most legal tech startups position themselves as tools for traditional firms to use. It seems, however, that Crosby has taken a radically different approach. Rather than offering AI software to outside lawyers, Crosby has built its own law firm, staffed with lawyers who use its proprietary legal AI systems to deliver services directly to clients.
Launched in early 2025 and already out of stealth with a $5.8 million seed round led by Sequoia Capital, Crosby is a hybrid legal provider combining full legal oversight with rapid AI-powered contract processing. In doing so, it positions itself not just as a legal technology provider, but as a legal services business with a completely different operating model.
“Our goal was never to just automate tasks for law firms,” said Ryan Daniels, Crosby’s co-founder and CEO, in a launch statement. “To really fix how slow legal work is, we had to control the entire process—so we became the law firm ourselves.”
Built for Speed, Designed for Growth
The problem Crosby says it set out to solve is a familiar one in fast-moving industries, i.e. contract delays.
Daniels, who previously served as general counsel for several startups and worked at elite tech law firm Cooley, experienced the issue first-hand. “Most of the time I was spending on legal was for our contracts, sales agreements, MSAs,” he said. “It was the reason we weren’t growing as fast as we wanted to.”
Agentic
Crosby’s solution is what it calls an “agentic” law firm using a “hybrid” model where every contract is reviewed by proprietary AI agents, then verified by experienced lawyers. This human-in-the-loop setup enables clients to get back a reviewed contract within three hours, with many returned in under 60 minutes. Daniels claims the company’s fastest reviews take just minutes.
High-Volume, Sales-Related Agreements
The startup focuses on high-volume, sales-related agreements such as master service agreements (MSAs), data processing agreements (DPAs), and non-disclosure agreements (NDAs). This is because these are the kind of documents that tend to clog deal pipelines for sales teams in growing firms. Crosby’s promise is, therefore, to get contracts reviewed quickly and accurately, so deals close faster.
Who’s Behind Crosby?
Crosby was founded by Daniels and John Sarihan, who serves as CTO. Sarihan previously worked at Ramp, a fintech unicorn, and brought with him engineering talent from companies like Meta, Google, and Vanta. Daniels, a second-generation lawyer whose parents are both law professors, focused on building the legal team, which includes alumni from Harvard, Stanford, and Columbia Law.
The company is headquartered in New York and operates as both a legal technology company and a law firm. Formally, Crosby Legal, Inc. provides the technology, while Crosby Legal PLLC is the law firm offering legal services.
Their Sequoia-led funding round also included participation from Bain Capital Ventures and notable angel investors such as Ramp co-founders Eric Glyman and Karim Atiyeh, Instacart co-founder Max Mullen, Opendoor’s Eric Wu, and Flatiron Health founders Zach Weinberg and Gil Shklarski.
Josephine Chen from Sequoia, who previously backed AI procurement startup Venue (later acquired by Ramp), led the deal. “Legal is a bull’s-eye case for the use of LLMs,” she said. “Contract negotiations can be a real bottleneck for growth.”
AI Meets Legal Expertise
Crosby’s approach blends the rapid processing power of AI with legal precision. For example, clients can send documents or queries via Slack, email, or through a CRM trigger. The system’s legal AI agents, trained on thousands of contracts and guided by firm-developed benchmarks, then analyse the documents, make suggestions, and insert relevant market terms.
Lawyers then step in to review, interpret tricky clauses, and validate any automated changes. The final contract is returned to the client with a fixed price tag (no hourly billing), and no redline confusion (no back-and-forth edits on contracts). For example, “AI never sleeps,” says the firm’s website. “Crosby never gets backlogged.”
Learns About Clients’ Businesses
Crosby’s AI systems are also designed to learn each client’s business over time. This includes storing preferences, preferred clause variations, and common fallback terms. The company claims its software can answer routine contract questions without client input once it’s sufficiently trained.
Targeting Startups That Need to Move Fast
So far, Crosby appears to have aimed its services at venture-backed startups, particularly those with aggressive go-to-market (GTM) strategies. Early clients include Cursor, UnifyGTM, and Clay, all startups known for rapid growth and high sales velocity.
By focusing on sales contracts and offering legal reviews as fast as the sales cycle itself, Crosby is positioning itself as a growth enabler rather than just a legal resource. GTM teams reportedly call it a “secret weapon” for getting contracts over the line.
Crosby’s upfront pricing is also designed to appeal to startups used to controlling costs. For example, clients pay per document, not per hour, which is a sharp contrast with traditional legal billing models.
Why This Matters for the Legal Industry
Crosby’s emergence poses direct questions to the traditional legal services model. For example, most law firms are structured around bespoke work, hourly billing, and long timelines. By contrast, Crosby is productising contract review, treating it as a repeatable, scalable service.
Not The First Legal Firm To Apply AI
It’s worth noting here that Crosby is not the first to apply AI to legal work. For example, companies like Harvey (which recently raised $80m), Ironclad, and Spellbook are building AI tools to support lawyers. However, Crosby is unusual in that it delivers end-to-end legal service directly to clients, with its own regulated legal team and a law firm structure.
This allows Crosby to sidestep law firm conservatism and scale more like a tech startup. “We didn’t want to wait for firms to catch up,” Daniels said. “We wanted to prove it could be done.”
Potential Risks and Criticisms
Crosby’s model is not without its critics. Legal work carries significant liability, and while its lawyers remain in the loop, the firm must prove that its AI systems are reliable, auditable, and ethically sound. The startup says all outputs are lawyer-reviewed, but how clients interpret that balance between machine and human may vary.
There’s also the regulatory question. In most US states, legal services must be delivered by licensed professionals. Crosby’s dual-entity structure is designed to comply with those rules, but regulatory scrutiny may increase as it scales.
UK firms will also need to watch this space closely. For example, while firms like Allen & Overy and Mischon de Reya are experimenting with AI copilots, none have yet adopted a Crosby-style hybrid structure. If Crosby proves successful in the US, it may set a precedent for how AI-led legal services could evolve in other jurisdictions.
Are There Any Competitors Doing the Same?
There are firms inching toward similar models. Atrium (now defunct) once tried to integrate software with legal service delivery, though without the speed or AI emphasis Crosby offers. More recently, firms like Lawtrades and Axiom Legal blend tech-enabled platforms with lawyer marketplaces, but again, they stop short of Crosby’s embedded, AI-first, regulated law firm model.
In the UK, companies like Luminance and Robin AI provide AI tools to assist legal teams but do not operate as regulated firms themselves. Crosby’s core differentiator is that it is both the software company and the law firm, acting as one unified entity with aligned incentives to deliver speed and accuracy at scale.
What Does This Mean For Your Business?
For law firms, Crosby represents a direct challenge to long-established business models built around hourly billing and drawn-out negotiations. Its hybrid setup shows that legal services can be fast, fixed-price, and scalable, without sacrificing human oversight. If the model proves durable, it could force traditional firms to rethink both their pricing structures and the level of tech integration in their workflows.
For UK businesses, the implications could be equally significant. If models like Crosby’s reach the UK market, startups and scaleups would most likely be able to close deals more quickly, reduce legal overheads, and compete more effectively. The demand for faster legal execution is not limited to Silicon Valley. UK firms under pressure to accelerate growth and reduce friction in sales cycles may soon expect legal services to move at the same pace as their CRM or procurement systems. Legal firms serving these clients will need to respond accordingly.
Regulators and legal educators may also come under pressure to modernise. Crosby’s model blurs the line between legal practitioner and product developer. That raises questions not just about compliance, but also about professional training, ethical oversight, and the future identity of the legal profession. As AI models evolve, the challenge will be to strike a balance between innovation and accountability.
The legal industry has long been insulated from the kind of disruption seen in finance or logistics. Crosby’s approach suggests that insulation may be starting to wear thin. Whether it becomes the norm or remains an outlier, it has already expanded the conversation around what legal services can look like, and who is best placed to deliver them.
