Better Call Bot: The Rise of AI Law Firms

If I had to keep a name for Full-Stack AI Law Firm run by me it would be called Jarvis & Associates (the associates being Ultron and the Entity). That's kind of scary though.

Y Combinator’s request for startups in the period of Summer 2025 called 2025 the year of AI Agents. In the request they mainly compiled a list of ideas relating to AI Agents that they believe are promising and could be lucrative. One of the sectors poised for rapid transformation by AI Agents is law.

One of the promising ideas was Full-Stack AI Companies. LLMs are automating a bulk of the legal work such as drafting, case research, due diligence, documentation and compliance.

This presents 2 opportunities:

a) You could build your own AI Agents and sell them to law firms and lawyers

(OR)

b) You could start a law firm and staff it with existing agents

If you picked B then that is building a Full-Stack AI Company. This could be done for industries which are dominated by slow-moving incumbents. A Full-Stack law firm would compete with existing law firms and could potentially run out traditional law firms from business.

Full-Stack AI Law Firms would be able to run more efficiently than traditional law firms due to leaner teams. It would be cost-effective due to reductions associated with human labor.

Just like how in VC we’re slowly seeing the rise of Solo-GP Funds the next big law firm will not have thousands of lawyers. It could possibly be a single-partner firm.

As we all know, the legal industry is one that is slow-moving and is plagued by procedural inefficiencies such as case research, paperwork, documentation, compliance and rote drafting.

What are AI Agents?

Before we delve into what a Full-Stack Law Firm looks like, it’s important to understand what AI Agents are and the technology behind them.

An AI Agent is a software or program that is able to act autonomously on behalf of people helping optimize workflow. I’m sure we all know about Jarvis from Iron Man who was Tony’s personal assistant (AI Agent). Now imagine a law firm run by Jarvis clones in charge of different departments such as Public Policy, Client Relations, Finance, M&A, PE and VC. That’s the entire pitch.

The tech for AI Agents isn’t quite there yet, but we’re getting there.

From this we can see that an AI Agent would replace the need for hiring people as it can make independent decisions and perform complex tasks.

Where India stands

In India, if we take a look at the state of LegalTech right now all the Indian Law Firms are slowly adopting AI. Recently, Shardul Amarchand Mangaldas (SAM) announced a partnership with leading Generative AI platform Harvey AI. SAM plans to use the renowned platform for contract review and drafting, predictive analysis, legal research and due diligence. IndusLaw had announced a partnership with Jurisphere and previously even LegitQuest which is an AI-driven tool. Khaitan & Co has developed it’s own Generative AI solution called KAI that can be utilized within the firm ensuring confidentiality.

How would Full-Stack AI Firm operate?

A Full-Stack AI Law Firm would consist of different AI Agents in charge of different departments or an AI Agent consisting of sub-agents. It would have more agents if it was a full-service law firm as they work across diverse areas. If the firm was a boutique law firm specializing in some areas then it would require fewer AI Agents. Examples would be M&A Agent, Capital Markets Agent, Client Relations Agent and HR Agent etc. These different agents would be overseen by a team of maximum 10-15.

In short, law firms are going to have teams the size of VC Firms. Those who have a high level of expertise in an area coupled with the skills to oversee such agents would be preferred for hiring. These law firms would be able to compete with the big law firms in India such as SAM, CAM and Khaitan & Co. With the entry of foreign law firms in India we could see new firms which would be able to compete with foreign law firms due to their high-efficiency and lean teams. Your lawyer would be a robot!

Challenges associated with Full-Stack AI Law Firms

1. Bias - AI learns from historic data and if the data contains biases then it amplify biases. Law Firms that rely on these AI Agents may suffer from discriminatory outcomes hurting their reputation and outcomes. They may end up prioritizing efficiency over fairness and privacy. E.g. When these AI Agents assess the risk of startups from non-English speaking countries during due diligence these startups might get red-flagged. This is because the model could have been trained on Western-Centric approaches, past due-diligence reports, region etc.

2. Data Privacy - Law Firms have to maintain a high level of confidentiality due to Attorney-Client privilege. When a law firm is completely digital it has to be ensured that none of the confidential documents are leaked. The firm’s proprietary data should be protected. Their non-dynamic structure makes them more prone to cyber attacks.

3. Lack of Dynamic Learning - Corporate Law Firms have a dynamic work environment as business regulations and law are subject to change. For example if we take M&A then the Competition Commission of India is constantly updating and upgrading the regulations. AI Agents are trained on static information. The AI Agents have to be updated continuously.

The next 10 years

A Full-Stack Law Firm is not something that we might see very soon in the Indian Startup Ecosystem. It will take another good 10 years before we see such law firms in India as even the development of AI Agents is at a very nascent stage. The Legal Industry is slow-moving and is adopting AI to increase it’s efficiency and cut down costs. A Full-Stack Law Firm is very well in the cards and could in fact be a game changer for legal industry. Would you trust you Jarvis with your next lawsuit? I wouldn’t bet against it.

Sources: Y Combinator, Bar and Bench, IBM, Google Cloud, Zapier, BCG, ETLegalWorld and Lexis Nexis.