The AI tool automates routine legal tasks like contract review, compliance checks, and document briefing, while keeping lawyers in the loop.
Shares of major legal software, analytics, and data firms fell sharply across US and European markets following the announcement.
Analysts warn Anthropic’s position as a core AI model developer could intensify competition for both traditional legal firms and AI startups.
Anthropic has officially entered the legal technology space with a new AI automation tool, leading to an intense response from the global software and data markets. The company’s latest offering, rolled out under its Claude Cowork platform, is intended to help with routine legal tasks such as contract analysis and legal brief preparation. According to the website, the Anthropic AI tool aims to improve efficiency in legal workflows but is not intended to replace human lawyers. Here’s what it does and why it’s causing a frenzy in foreign markets.
SurveyWhat is Anthropic AI’s new legal tool?
The new AI tool, marketed as an AI junior lawyer, can automate routine document workflow and administrative tasks. The legal plugin will allow users to review contracts, triage NDAs, conduct compliance checks, document briefings, provide template responses, and much more.
In terms of availability, the tool is available as a research preview to users who have paid for Claude subscriptions. It is open source and hosted on GitHub, so companies can tailor it to their specific internal legal policies. However, the company has clearly mentioned that the tool is not for legal advice or to replace human lawyers.
Why is it in the headlines?
Even after the assurances, the announcement unsettled investors. The shares of several companies linked to legal software, analytics and professional data services fell sharply. Many experts believe that it can disrupt the established business models. In
In European markets, many stocks, including RELX and Wolters Kluwer, saw a whopping double-digit decline. In the US, companies like LegalZoom, FactSet, and London Stock Exchange Group also recorded notable losses. Overall, the sector suffered with software-focused ETFs and baskets of AI-vulnerable stocks posting steep intraday drops.
Also read: OpenAI says AI is advancing fast, hires new safety exec from Anthropic
The reports suggest that the sell-off to fear of increasing competition in the legal AI space. Morgan Stanley analysts believe that Anthropic’s expansion into legal workflows raises the competitive bar for both traditional providers and newer AI-focused firms.
Many startups, such as Harvey AI and Legora, are already in the space and have gained traction by offering tools that reduce repetitive legal work. However, Anthropics position as a core AI model developer makes it different from many rivals. The startups rely on third-party large language models and on the other hand, Anthropic develops its own models in-house, allowing it to tailor capabilities more tightly to specific industries. This structural advantage has fueled some big concerns and is the reason we are seeing the drop.
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Ashish Singh
Ashish Singh is the Chief Copy Editor at Digit. He's been wrangling tech jargon since 2020 (Times Internet, Jagran English '22). When not policing commas, he's likely fueling his gadget habit with coffee, strategising his next virtual race, or plotting a road trip to test the latest in-car tech. He speaks fluent Geek. View Full Profile
