Anthropic’s new Cowork legal plugin is emerging as a major test of how foundation models will reshape the legal software market. The launch immediately rattled public investors, who drove down shares of major incumbents on concern that a flexible, general-purpose Artificial Intelligence assistant could rival tools that have anchored law practices for years. The slump is less about any single Claude feature than about a broader question hanging over the industry: if foundation models get good enough at legal work, demand for traditional, tightly curated research platforms could weaken.
The market reaction has been swift. Thomson Reuters and RLEX lost about 20% in recent days, and shares of Thomson Reuters and RLEX, makers of legal software, dropped about 15% each on Tuesday, before recovering slightly on Wednesday while remaining deeply negative for the week. Analysts at William Blair & Co. told clients that Anthropic’s push into legal introduces “a structural concern” about the relevance and information moats of established information services providers under a new Artificial Intelligence paradigm. The shock underscores a growing divide between legacy vendors that emphasize vetted, closed-case databases and newer players that prioritize speed, flexibility, and a “virtual associate” experience, even if that means accepting higher risk.
Legal technology startups and practitioners are split on how disruptive the new plugin really is. Harvey, valued last year at 8 billion, described Anthropic as both a partner and a long-term competitor, with CEO Winston Weinberg urging employees to move faster on what differentiates Harvey. Some in-house focused startups, such as GC AI, characterized the plugin as “very raw and not a threat,” comparing Claude to an engine that still needs specialized products wrapped around it, similar to how Amazon Web Services coexists with software vendors built on its infrastructure. Others see Anthropic’s move as a catalyst for demand: Soxton’s founder reported a spike in investor outreach after the release, as backers searched for legal providers serving founders who are wary of risking core legal paperwork on generic tools. Individual lawyers are already stress-testing Claude in daily workflows, from contract comparison skills to simulated reviews using the plugin, but early trials highlight concerns when the system draws on open web sources like Wikipedia, reinforcing the ongoing tension between speed and trust in the sector.
