Perplexity Gets Serious About Legal

We’ve had OpenAI, Anthropic, Microsoft and Palantir enter the legal vertical. Perplexity – which has dabbled in our field before – is going into legal for real, Artificial Lawyer can now share. So, that’s five Big Tech players.

The expansion move is connected to their agentic platform, Perplexity Computer, and they will be holding a special event in New York next week called ‘Computer for Counsel’ aimed at lawyers ‘who are modernizing how they research, draft, and manage matters with AI workflows’.

Some major announcements around legal research data will also be made at the event, involving companies such as Midpage, they said. While there is a smaller to mid-size law firm flavour to some of their legal sector ambitions, they are also specifically targeting inhouse legal teams as well. So, if this takes off it will be felt by Big Law as well.

A spokesperson for Perplexity told Artificial Lawyer: ‘Earlier this year, our focus was building in hundreds of connectors to the SaaS tools used by major business verticals, including the legal industry, so that the adoption curve didn’t require trusting a black box of AI solutions as a replacement for legacy, enterprise-compliant tools.

‘Midpage, Box, and DocuSign are currently active, and connectors to tools like LexisNexis, Ironclad, and Clio are on the way.’

‘The [event] focuses on how Perplexity Computer is changing legal work. We’ll be talking about how professionals are incorporating AI into the legal function, and how Computer leads in security and accuracy for legal tech.

‘We’ll also be sharing news on new connector partnerships and premium legal sources built into Computer. You’ll hear directly from the lawyers and legal teams already using it, as well as Perplexity executives.’

And, they underlined, this builds on their work in other verticals, such as finance and healthcare.

In short, Perplexity – after dabbling with Patent search and a hook-up with LegalZoom for consumer / SMB legal queries – is now moving more broadly into legal.

Perplexity added that ‘we’ve been embedding with law firms and inhouse teams of all sizes through our Enterprise offering for the last few years, and tend to punch above our weight in adoption in legal, finance, and healthcare industries, due to our strict security measures and our focus on citations and accuracy.

‘In particular, most LLMs tolerate a certain amount of hallucinations as a feature and train models on tone, helpfulness, and factual accuracy in equal measure; at Perplexity, we only reward answers that are factually accurate in our post-training, and post-train them to be more accurate than they are on their own platforms,’ they added.

And – as they know – the hallucination issue is a big deal for lawyers, and so they are quite intentionally targeting this as part of their marketing to the legal sector.

Is this a big deal?

Well, as noted, we now have five Big Tech companies wading into the legal vertical. And every one of them takes a small amount of market share – even if, as is the case here, they sometimes are working with legal tech companies as well.

The hope is that the legal sector continues to grow, as it always has, and that Jevon’s Paradox kicks in as AI becomes more widely used globally. I.e. we get way more competition – and from much larger companies, but the total market demand increases, which in turn pushes up demand for each and every legal tech company that is able to communicate a compelling offering to law firms and inhouse.

However, the flip-side is that legal tech is becoming less and less niche, and less ‘owned’ by those who traditionally have been part of a sometimes enclosed ‘legal tech world’ that traces its roots back several decades.

That means that those companies that could make a living from just freewheeling along inside a relatively protected environment will face far tougher competition. I.e. More marketing and more influence from ‘household name’ companies with a huge presence already in the general market.

That then drives the legal AI companies with major investors to double down on their efforts, so as not to be left behind by the changing environment. And that leaves some smaller companies with less cash to spend in an increasingly tough situation in terms of gaining potential customers’ attention. But, if they sit on their hands now, the world will move on. One might say now is the time to enter the fray. The legal tech vertical is going to change a lot in the next few years, and key strategic decisions now will have a potentially major impact for many companies.

AL would also expect other giant players to enter the field; in fact this site has been told to expect at least one more really huge tech company to intentionally enter the legal vertical before this particular phase of market evolution concludes.

You can find more about how to attend the Perplexity event here.

—