“‘I can’t really in good conscience serve the people that I’m diminishing the business of,’ said Wordsmith founder Ross McNairn, explaining why his company chose to focus solely on corporate legal teams instead of law firms.”
A former lawyer has raised $70 million in fresh funding for his legal technology startup, Wordsmith, betting that artificial intelligence can help companies bring more legal work in-house and reduce their dependence on external law firms.
The funding round, backed by investors including Index Ventures and Highland Europe, brings Wordsmith’s total funding to $100 million in just two years, making it one of the fastest-growing companies in the legal AI sector.
Founded by former lawyer and tech entrepreneur Ross McNairn, Wordsmith develops AI-powered software designed specifically for in-house legal departments. Rather than selling tools to traditional law firms, the company focuses on helping corporate legal teams handle more work internally.
The platform integrates with workplace tools such as email, Slack, Microsoft Teams, and Salesforce, allowing legal departments to manage requests, draft contracts, answer legal questions, and route matters to the appropriate team members.
McNairn believes many companies are looking for ways to reduce the cost of legal services by keeping more work within their organizations rather than outsourcing it to external firms.
Unlike several legal AI startups that serve both law firms and corporate legal departments, Wordsmith has deliberately chosen one side of the market.
“I can’t really in good conscience serve the people that I’m diminishing the business of,” McNairn said, explaining why the company stepped away from potential seven-figure contracts with law firms.
The decision reflects a growing shift within the legal industry as artificial intelligence begins transforming how legal work is performed.
For decades, companies relied heavily on external law firms for contract reviews, compliance matters, and legal advice. AI tools are increasingly enabling internal legal teams to complete many of these tasks faster and at a lower cost. Wordsmith’s growth suggests that demand for such solutions is rising rapidly.
What began as a startup in Edinburgh, Scotland, has grown into a business serving more than 500 companies, including teams at Canva, Financial Times, BT, Safelite, and Trip.com. McNairn’s path to building the company began after leaving legal practice to pursue opportunities in technology.
After training as a lawyer, he concluded that software could scale far more effectively than traditional legal services. He went on to build and sell a travel technology startup before holding senior positions at companies including Skyscanner and TravelPerk.
His interest in artificial intelligence intensified after gaining early access to OpenAI’s technology through an investor connection.
While working at TravelPerk, McNairn experimented with large language models to automate operational tasks. One project focused on processing travel change requests and cancellations that previously required significant manual effort.
“The tool took the queue down to zero overnight,” McNairn recalled, describing one of his early experiences with AI automation. The experience convinced him that similar technology could transform legal operations. Soon afterward, he left his role and began building what would become Wordsmith. The company quickly attracted investor attention.
Index Ventures, known for backing companies such as Figma, Dropbox, and Slack, invested in Wordsmith from its earliest days and has continued supporting the company through successive funding rounds. The latest investment comes at a time when legal technology has become one of the fastest-growing segments within the AI industry.
Billions of dollars have flowed into startups building AI-powered legal tools, including companies such as Harvey, Legora, and GC AI. Many of these firms initially targeted law firms before expanding into corporate legal departments. Wordsmith’s strategy differs by focusing exclusively on in-house legal teams.
McNairn argues that legal departments require more than a chatbot capable of answering questions. They need systems that can manage workflows, enforce policies, maintain records, and provide visibility into how legal decisions are made.
The rise of powerful AI models from companies like Anthropic has also sparked questions about whether specialized legal software will eventually become unnecessary. McNairn disagrees. “Claude’s good for individuals doing individual jobs,” he said. “Wordsmith runs the function.” His argument is that general-purpose AI assistants can help lawyers perform tasks, but organizations still need dedicated systems to manage legal operations at scale.
That distinction is increasingly becoming a major battleground in the legal AI market. As businesses search for ways to reduce legal costs while improving efficiency, startups like Wordsmith are positioning themselves as alternatives to traditional legal service models.
The company’s latest funding round suggests investors believe that future legal departments may rely less on outside counsel and more on AI-powered internal operations.
If that vision proves correct, firms like Wordsmith could play a significant role in reshaping how legal services are delivered in the years ahead.
