(Bloomberg) -- Norm Ai has raised $120 million from investors in a new funding round to help automate legal services and rethink how the industry bills for its work.
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The financing, set to be announced Tuesday, values the startup at $1.2 billion. Khosla Ventures led the funding round, with participation from Blackstone Inc., Bain Capital Ventures and Coatue Management, among others. Norm has raised more than $260 million in funding to date.
Founded in 2023, Norm is one of a growing number of startups using advances in AI to help legal professionals draft documents, conduct research and review contracts. Other companies, including Anthropic PBC and Harvey, have also introduced AI agents and software meant for lawyers.
While competitors sell software to law firms, Norm has created its own law firm that provides AI-powered legal services directly to clients. Norm Law, as the firm is called, charges customers based on outcomes rather than the industry standard of billable hours, with the goal of better reflecting the value of services provided. The startup also brings together attorneys and artificial intelligence engineers to build and deliver legal services. Samir Kaul, managing director at Khosla, said this approach gives clients added confidence to use AI for more complex legal work, addressing a significant barrier to adoption.
"You're getting top-class, real human lawyers," Kaul said, as well as "terrific AI-based technology to help that along."
Beyond streamlining legal work, Norm is developing AI agents designed to monitor other AI tools in regulated industries. Chief Executive Officer John Nay said companies deploying AI systems to provide investment or medical advice can use Norm's technology as a compliance check.
The new funding will be used to further develop these supervisory AI systems as well as to hire additional engineers and attorneys.
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