Crosby: The 'Neofirm' Revolutionizing Legal Services

New York-based startup Crosby is fundamentally changing how legal services are delivered by eliminating the traditional billable hour. The company operates as a "neofirm," where AI agents and human lawyers collaborate to expedite contract reviews for commercial clients.

Crosby was cofounded in September 2024 by CEO Ryan Daniels, a lawyer with extensive in-house counsel experience at AI startups, and John Sarihan, an ex-Ramp engineering manager. The firm is already serving approximately 100 companies, including AI innovators like Cursor and Runway, and large entities such as Tishman Speyer.

A New Business Model: Speed Over Time Tracking

Instead of tracking work in six-minute increments, Crosby charges clients a flat fee per contract, typically ranging from $250 to $1,000, based on page count (roughly $10 to $50 per page). This model ensures clients are billed only once, even if a contract requires multiple reviews.

CEO Ryan Daniels states this shift represents "the most dramatic change for lawyers in a hundred years." The goal is to directly align the firm's financial success with its clients' need to close deals rapidly.

How Crosby's AI-Human Collaboration Works

The firm's operational efficiency stems from a sophisticated system where AI agents handle the initial heavy lifting. Lawyer Weiser, who joined Crosby after working at Sullivan & Cromwell, notes the stark contrast with his previous firm's limited use of tools like ChatGPT.

The Contract Review Pipeline

When a client submits documents via Slack or email, they are uploaded to a central system named Bailiff, which stores templates and guidelines. Crosby utilizes a suite of eight AI agents, built on models from OpenAI, Anthropic, and Gemini, to review the contract.

  • Each agent specializes in a segment of the review, such as extracting context or proposing specific revisions.
  • The AI system generates a confidence score after an end-to-end review.
  • A human lawyer then reviews the AI's output, addressing legal nuances and verifying accuracy.

This entire process often takes only a few hours, a significant reduction from the days or weeks required by traditional methods. The agents are continuously trained on thousands of anonymized reviews and 50,000 hand-labeled clauses, honing their legal accuracy.

Client Impact and Market Validation

For fast-moving AI startups, Crosby's speed is a critical advantage. AI coding startup Cursor has used Crosby to review 2,000 contracts, achieving a 50 percent reduction in review time.

Lainie Yallen of Simile, an AI simulation startup experiencing 28x revenue growth, emphasized the necessity of a legal team that can match their pace. She noted Crosby offers the "fastest turnaround, most conducive to the pace of our business relative to anything else we have tried."

Funding and Competitive Landscape

Crosby recently announced a $60 million Series B funding round, co-led by Index Ventures and Lux Capital, valuing the company at $400 million. The firm has seen revenue growth of about 400% since October.

While contract review is a massive global market, Crosby faces competition from other AI legal tech firms like Lawhive and Ivo. Furthermore, large labs like Anthropic are developing similar tools.

The Liability Differentiator

Daniels argues that Crosby's key differentiator is its status as a registered law firm, making it liable for every contract reviewed. He contrasts this with software providers, stating, "I still want to rely on humans that I know and have trust and confidence in," regarding ultimate accountability.

Harvard Law School's Robert J. Couture suggests that while AI will transform practice, the billable hour may persist for large firms focused on complex work and maximizing "profits-per-partner." However, Crosby is positioned to capitalize on the repetitive, high-volume contract work often offshored previously.