Key points:

• The LegalTech Fund (TLTF) has closed its second, $110 million fund, nearly four times the size of its inaugural 2021 vehicle.
• Backers include McDermott Will & Schulte, Orrick, Consilio, Clio, Docusign, Harbor, Burford Capital and Thomson Reuters Ventures.
• The fund will focus on early-stage through Series A legal tech, with selective capacity to follow into Series B alongside its LegalTech Lab accelerator.

The LegalTech Fund has closed a $110 million second fund, signaling that Big Law firms and legal technology companies are doubling down on a sector increasingly defined by AI, workflow automation and data-driven services. TLTF said the new vehicle is nearly four times larger than its inaugural $28.5 million fund, raised in 2021, in a recent announcement distributed over the wire and republished by PR Newswire.

Investors in the oversubscribed fund include repeat backer McDermott Will & Schulte, which committed $10 million, and e-discovery and managed review provider Consilio, alongside Orrick, Herrington & Sutcliffe, Clio, Docusign, Harbor, Burford Capital and Thomson Reuters Ventures, according to reporting from Reuters. For McDermott and other strategic investors, the stake offers both financial exposure and a structured window into the next wave of legal tools their clients and lawyers may adopt.

Co-founder and managing partner Zach Posner framed the larger vehicle as a way to stay with companies for longer, both in capital and operational support. In the firm’s press materials and subsequent coverage by LawSites, he noted that TLTF will continue to invest globally from seed through Series A, but can now back select portfolio companies into Series B as they scale into more complex deployments in law firms and in-house departments as detailed by LawSites.

TLTF’s second fund has already been active. Recent investments include AI-powered litigation startup Wexler, legal recruiting platform Flo Recruit, online prenuptial agreement provider HelloPrenup and analytics-focused platform Entegrata. Those sit alongside earlier bets such as generative AI contract platform Spellbook, collaboration tool The Contract Network and compliance startup SingleFile, which have been highlighted in releases from TLTF and firm partner McDermott summarizing the fund’s existing portfolio.

For corporate legal departments and large law firms, the composition of the investor group is as notable as the fund size. TLTF positions itself as an investor with sector-specific insight, arguing that law firm and legal-ops LPs help it test real-world use cases and pressure-test product-market fit. Posner has emphasized that the fund is less anchored to particular product categories than to discrete problems that lawyers, legal operations and clients are trying to solve, reiterating that legal tech is moving from a niche vertical to infrastructure that touches “every business transaction,” as reported by Venture Capital Journal and others.

McDermott’s involvement comes as the newly merged McDermott Will & Schulte leans into technology investment and structural change. The firm completed its merger between McDermott Will & Emery and Schulte Roth & Zabel this summer, creating a 1,750-lawyer platform with more than 20 offices worldwide, according to the firm’s own merger announcement describing the combination. Separate reporting in the Financial Times indicates the firm is also exploring a potential private equity-style capital structure, a move that could free up additional funds for technology and innovation initiatives, including those connected to TLTF-backed tools.

For law firm LPs, the fund offers three potential advantages: early visibility into emerging vendors, input into product direction and a way to diversify exposure beyond billable-hour growth. McDermott officials have previously said that investing through TLTF gives the firm insight into the “pipeline of innovations” and access to tools already being piloted in practice, with the expectation of both strategic and financial returns. Those comments track with the firm’s recent creation of an AI innovation director role and continued emphasis on technology-enabled service delivery.

For legal tech companies, TLTF’s model offers something different from generalist venture capital: a concentrated LP base of legal buyers and intermediaries. The fund’s companion accelerator, LegalTech Lab, is designed to connect early-stage startups with prospective customers and design partners in law firms and corporate legal departments. That alignment can accelerate pilots and proof-of-concept projects, but it also raises governance questions for general counsel and procurement teams about conflicts, data access and vendor neutrality when a panel firm or law department has an equity stake through a fund.

In-house leaders and law firm partners watching the space may want to track three developments as TLTF Fund II deploys capital. First, which practice areas—litigation, contracts, compliance, IP, employment—attract the largest share of investment and how that maps to their own risk and spend profiles. Second, how AI-heavy startups manage issues such as model governance, client-data segregation and privilege. Third, whether the concentration of funding in a relatively small set of platforms leads to consolidation in vendor panels and fewer, deeper relationships between law departments, firms and technology providers.

For now, TLTF’s second fund underlines a broader shift: legal technology is no longer a side bet for major firms and vendors. With $110 million in fresh capital and a roster of strategic LPs, the fund’s deployment decisions are likely to shape which tools reach scale in Big Law and large corporate legal departments over the next cycle.