Shreya Vajpei
CEO, Indian LegalTech Network (ILTN)
Saranya Mishra
Khaitan & Co, Mumbai
A critical analysis of emerging business models in the legal profession
The legal services industry is experiencing what may prove to be its most consequential structural transformation since the advent of the modern partnership model. A new category of legal service provider has emerged – ‘the AI-native law firm’ – characterised not by the retrofitting of technology onto traditional structures, but by the integration of AI as the fundamental lever of service delivery from inception. This development, enabled by regulatory innovation and driven by converging market forces, warrants serious examination by legal professionals globally.
Regulatory innovation as catalyst
The emergence of AI-native law firms has been materially enabled by regulatory frameworks willing to authorise novel service delivery models. In May 2025, the UK Solicitors Regulation Authority (SRA) made legal history by approving Garfield.Law Ltd as the first law firm authorised to deliver legal services entirely through AI technology.[1] This represents a watershed moment: a regulator explicitly sanctioning a business model where AI, rather than human labour pyramids, constitutes the primary mechanism of service delivery.
Garfield, co-founded by former City lawyer Philip Young and quantum physicist Daniel Long, operates an AI-powered litigation assistant for small claims debt recovery up to £10,000. The platform guides users through the entire process: from calculating amounts owed to filing for default judgment. The firm charges on a per-document basis rather than hourly rates, fundamentally departing from traditional economic models.[2]
The SRA’s authorisation came with strict safeguards including client confidentiality protection, conflict avoidance mechanisms, user approval at each stage and controls preventing AI from proposing case law – addressing concerns about AI hallucinations. SRA Chief Executive Paul Phillip characterised this as ‘a landmark moment for legal services,’ while acknowledging ‘potential risks to the public’ that require ongoing monitoring.[3]
Similarly, Arizona’s Alternative Business Structure (ABS) programme has enabled Eudia Counsel to operate as an ‘AI-augmented law firm’ with non-lawyer ownership, to support corporate clients with contracting, M&A due diligence and other complex legal needs.[4] It joins KPMG, Axiom, LegalZoom, and Elevate, all of which have launched affiliated firms under the ABS programme.
These regulatory frameworks represent a philosophical shift: accepting that legal service delivery can be fundamentally reimagined when appropriate safeguards and accountability mechanisms exist.
The technology imperative
The technological capabilities now available represent the second critical enabler of AI-native models. Unlike incremental efficiency tools that marginally improve existing workflows, current AI systems can perform substantive legal work at speeds and costs that fundamentally challenge traditional economic assumptions.
Consider NormAI’s trajectory. The company raised money from Blackstone in November 2025 to launch Norm Law, described as ‘the first AI-native full-service law firm for global institutional clients.’ NormAI’s proprietary ‘Legal Engineering’ methodology combines their no-code AI platform with over 35 lawyers trained to convert legal workflows into large language model-driven AI agents.[5] The firm serves clients collectively managing over $30tn in assets, demonstrating that AI-native models can address sophisticated institutional requirements, not merely routine consumer matters.[6]
Similarly, Crosby – which raised $5.8m from Sequoia Capital and Bain Capital Ventures – provides AI-powered contract review with a median turnaround of 58 minutes. Sequoia’s investment thesis emphasises Crosby’s ability to build customer-specific knowledge bases that become more sophisticated over time, highlighting how AI systems can develop institutional memory that compounds value rather than remaining static.[7]
This technological capability extends beyond speed to sophistication. Lawhive’s AI assistant ‘Lawrence’ scored 81 per cent on the Solicitors Qualifying Examination, well above the 55 per cent pass threshold, demonstrating proficiency at paralegal or junior lawyer level. This is not automation of clerical tasks – it represents AI performing substantive legal analysis.[8]
Economic disruption and the leverage question
The traditional law firm model relies on leverage: partners supervising associates who perform the bulk of billable work, creating economic returns through the margin between associate salaries and billing rates. AI-native firms reject this fundamental architecture.
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