The recent plunge in legaltech company share prices over fears that artificial intelligence may upend rather than fuel their businesses was a market overreaction, insist analysts and suppliers.
The sell-off earlier this month in professional services company share prices, including legaltech suppliers, was in response to a product update at the end of January by US AI start-up Anthropic, which makes the Claude chatbot.
According to Anthropic, its new Claude legal plug-in can automate legal work such as contract reviews, non-disclosure agreements and compliance. That was enough to cause a sell-off in legaltech shares, including RELX, owner of LexisNexis, Thomson Reuters and Wolters Kluwer in early February.
RELX, which supplies analytics and data for lawyers, bankers and scientists, has prospered for decades as its services are embedded into legal professionals’ day-to-day work, said Dan Coatsworth, head of markets at investment platform AJ Bell.
“Any company in its situation stands to fall fast and hard on the stock market when worrying news comes out of nowhere,” he said.
However, on 12 February, when RELX announced its financial results for 2025, its share price rose.
RELX’s chief executive officer Erik Engstrom said the company’s own use of AI would drive growth for “many years to come”, after it reported a 9% rise in 2025 operating profit.
Fears that AI, which for the past several years has fuelled the tech boom in the legal sector, may now pose an existential threat to the large legaltech suppliers are misplaced, some experts believe.
Ryan O’Leary, research director and legaltech expert at research company IDC, said the “reactionary” legaltech stock sell-off was not indicative of any “unique and disruptive” product advancement by Anthropic. Rather, the sell-off signified “AI hype” and investors not fully understanding legal technology, he added.
In a research note, Chris Audet and Ron Friedmann, legal experts at research company Gartner, said that Anthropic’s legal AI tool was not a commercial threat to specialist legal AI suppliers such as LexisNexis, Harvey and Legora.
“These applications are grounded in primary law and offer superior security controls and support for complex legal workflows,” they said.
Legaltech suppliers also remain confident.
Joel Hron, chief technology officer at Thomson Reuters, a provider of legal software as well as business and financial information, said that legal functionality plug-ins from large generalist AI suppliers such as Anthropic − including the use of AI agents that can perform tasks autonomously − were complementary to its technology, not a threat.
“We see [AI] agent plug-ins as a way to guide and extend legal work,” he told Global Legal Post.
General purpose AI systems lack the “precision and trustworthiness” of specialist legaltech products, he said.
Within the legal sector, there is demand for technology to automate parts of information-intense tasks such due diligence and “deep research” during litigation, he added.
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