A&O Shearman, Cooley Leading Legal Tech Investment at Law Firms

Big Law firms such as Cooley and Orrick, Herrington & Sutcliffe are putting their financial might into legal technology development, anxious to tailor new software to the specific needs of lawyers at their firms.

The concerted effort comes as firms are recognizing the potential of generative artificial intelligence to automate certain legal processes. While there are many tools that can assist with e-discovery or contracts, the hands-on approach enables some firms to develop tech that directly meets the needs of their lawyers and caters to clients that increasingly expect AI to take on some of the work of lawyers.

Law firms supporting tech development have different approaches but prioritize tools that address specific issues. Cooley has a software solution for fund managers, and Wilson Sonsini Goodrich & Rosati built software that automates legal processes for its startup clients. A&O Shearman operates a tech incubator, and Orrick makes investments through a tech-specific initiative.

“We’re trying to ensure that we maintain our position as the most innovative law firm,” Shruti Ajitsaria, a partner at A&O Shearman, said of Fuse, her firm’s legal tech incubator. “We continue to be the first users of legal tech. We continue to push the boundaries.”

Nikki Shaver, CEO of Legaltech Hub, notes law firms aren’t investing in the way some legal tech startups do or hiring top software developers.

“We’re really talking about a few leading firms that recognize the need to move quickly in an evolving landscape where GenAI might turn the legal business on its head,” she said.

Tech incubator

A&O Shearman was the first law firm to implement Open AI-backed Harvey, which helps lawyers draft documents, analyze contracts and conduct research. The firm, which has nearly 4,000 lawyers, operates Fuse out of a London office specifically designed for collaboration, Ajitsaria said.

Fuse pairs startups with a partner sponsor and provides user feedback from lawyers. The latest cohort will start in May.

Fuse allows A&O Shearman to collect information about what works in legal tech and informs recommendations to clients who are looking for new tools, Ajitsaria said. She highlighted Avvoka, contracting software that Allen & Overy and Shearman & Sterling used to finalize their 2024 merger.

Ajitsaria said her views of the incubator are shaped by her background as a credit derivatives lawyer.

“I, in fact weirdly, don’t care about the underlying technology at all,” she said. “What I actually care about is, are you solving a problem that I care about or that a client cares about?”

(Bloomberg Law sells legal research tools and software, including some that make use of GenAI.)

To Buy or to Build

Cooley partner Jordan Silber led the development of Vanilla, a software platform that helps the firm’s investment clients comply with federal securities laws and other legal issues related to their funds. Vanilla automated a back-and-forth flow of PDFs that “everyone hated,” Silber said.

The 750 investment fund organizations that Cooley represents can access Vanilla without an additional charge. Although it has been approached by third parties interested in licensing it, Cooley decided to keep Vanilla in-house, Silber said.

When Cooley started developing Vanilla, which launched in 2019, legal technology hadn’t exploded into the high-investment industry it is today.

“There was no third-party software, there wasn’t really any options other than doing something ourselves,” Silber said. “Of course, today that’s very different.”

Vanilla has freed paralegals from some manual processes so they have more time for higher value work, he said.

The legal industry as a whole is running behind in the software game, Cooley chief innovation officer David Wang said. That means it’s also starting on the back foot in developing AI , he said. Every company—from pizza shops to car dealers—has its own software. Law firms should be no different, he said.

“It’s 2025—if you look out there in the world, every company is a software company,” he said.

But that doesn’t mean every law firm is eager to develop software.

“We always try to buy because we’re doing way too many things to go out and write code and maintain and do updates on everything,” David Cunningham, Reed Smith’s chief innovation officer, said.

Reed Smith in 2018 launched what it calls the “first law firm tech subsidiary” and has an in-house innovation lab. But it focuses on developing software that gives it a “competitive edge,” Cunningham said.

Both Cunningham and Cooley’s Silber emphasized that firms shouldn’t develop software that they can buy.

“There’s no need to go out and build something when there are six of them out there,” Cunningham said.

Venture investments

Wilson Sonsini was an early backer of firm client Google. Through its venture fund, the firm has invested in legal tech companies such as SingleFile Technologies Inc., a maker of compliance filing software.

Annie Datesh, Wilson Sonsini’s chief innovation officer, said there are certain things venture capital investors look for.

“You meet people who you just believe in the team,” Datesh said. “The timing is right, you’re trying to get into that area, and you can partner with them to help explore use cases.”

Wendy Butler Curtis, Orrick’s chief innovation officer, said the firm’s innovation team vets “hundreds of companies” for investment through its legal tech initiative.

“We look for founders and investors that share our commitment to data security and the use of Gen AI in a safe and responsible way,” she said.

DraftWise, Priori Legal and AltaClaro are among the companies the firm has invested in. When evaluating companies, the innovation team values security, user experience, workflow and feature development, she said.

Orrick also operates the Observatory, a database of available legal tech tools.

“We’re eager to share tech that elevates the profession, and we all benefit from this knowledge,” Butler Curtis said, adding “the larger the market share, the better the R&D budget.”