Major law firms are choosing to invest heavily in legal technology to improve efficiency, streamline processes, and meet growing client expectations, according to a Bloomberg Law report.

While many firms rely on third-party solutions, industry leaders like A&O Shearman, Cooley, and Orrick are taking a more hands-on approach by developing proprietary software and investing in legal tech startups to remain competitive.

A&O Shearman’s Tech Incubator

A&O Shearman has embraced legal tech innovation through Fuse, its in-house tech incubator that connects lawyers with startups.

• The firm was the first to implement OpenAI-backed Harvey, an AI tool for legal drafting and research.
• Fuse pairs startups with partner sponsors to ensure direct legal industry feedback.
• The incubator also helps clients navigate tech adoption, offering insights into emerging legal tools.

“We continue to be the first users of legal tech,” said Shruti Ajitsaria, a partner at A&O Shearman. “We continue to push the boundaries.”

Cooley’s In-House Solution: Vanilla

Rather than buy existing solutions, Cooley built Vanilla, a software platform for investment fund compliance.

• Vanilla automates a once tedious, manual process for Cooley’s investment fund clients.
• The firm provides the tool at no extra charge, reinforcing client relationships.
• Legal industry lagging in tech: Cooley’s chief innovation officer David Wang argues that every company today is a software company—law firms should be no different.

However, not every firm is following suit. Reed Smith’s innovation team emphasizes buying over building whenever third-party solutions exist.

“There’s no need to go out and build something when there are six of them out there,” said David Cunningham, Reed Smith’s chief innovation officer.

Investing in Legal Tech Startups

Some firms are going beyond internal solutions by directly investing in legal tech companies.

• Wilson Sonsini backed SingleFile Technologies Inc., a compliance filing software provider.
• Orrick has invested in DraftWise, Priori Legal, and AltaClaro, looking for tools that align with the firm’s data security and AI principles.

“We look for founders and investors that share our commitment to data security and the use of Gen AI in a safe and responsible way,” said Wendy Butler Curtis, Orrick’s chief innovation officer. When evaluating companies, the innovation team values security, user experience, workflow, and feature development, she said.

Orrick also operates the Observatory, a database that tracks legal tech tools to inform investment decisions. “We’re eager to share tech that elevates the profession, and we all benefit from this knowledge,” Butler Curtis said, adding, “the larger the market share, the better the R&D budget.”