The Legora-Harvey test for legal AI rounds

You are deciding whether to underwrite Legora’s $300 million raise at about an $8.5 billion pre-money valuation. Legora’s ARR reached $200 million, a doubling from $100 million over six months, following an 18-month run to the initial $100 million. CFO David Eckstein said the second $100 million took under six months.

The platform now has 130,000 monthly lawyers, spread over 2,100 firms and legal teams in more than 80 countries. Most of the recent growth comes from in-house lawyers, and the United States is now the largest market. For a growth investor, that mix separates a niche legal tool from an enterprise software business.

The faster step is the first proof

A first doubling can be built on early adopters. A second doubling in under six months is harder to explain that way. It points to a broader set of buyers, not just the first wave of users.

The reported raise is at least $300 million at a pre-money valuation near $8.5 billion. That valuation corresponds to about 42 times Legora’s $200 million ARR. The round is the moment to test whether the growth curve can support that multiple. The price is not absurd for enterprise growth, but it is not a price to accept on one company’s growth curve alone.

Harvey turns the multiple into a category price

Harvey, identified as Legora’s closest American competitor, announced a $550 million round at a $15.6 billion valuation earlier this month. For the multiple comparison, Harvey’s $11 billion valuation corresponds to about 37 times its $300 million ARR. The 42x and 37x multiples are close enough to treat the two as a category pair, not as unrelated companies with different growth stories.

The underwriting question shifts from one company’s growth curve to whether the legal AI category can support two large vendors. A named rival at comparable ARR gives a benchmark for what the category is worth, not just what one company is growing into. A close benchmark supports a two-vendor category position. A weak benchmark requires a company-specific discount.

The category case is strongest when the in-house United States mix is already the main engine. It gets stronger when the named rival is close in ARR and the multiple is within a narrow band. That test separates a category leader from a fast single company before the term sheet is signed.

Run the Legora-Harvey test before the term sheet

Use the checks below before writing a check.

• Check where the second doubling came from: in-house counsel in the largest market.
• Check whether a named rival is at comparable ARR.
• Check whether the multiple is defensible against that rival.

Ask for the ARR split by buyer type and geography before the term sheet is signed. The first criterion fails if the company cannot show that the second doubling is in-house and United States-led. Ask for the rival’s ARR from a public source or a credible market check. The second criterion fails unless the rival is close in ARR. Then compare the multiples. The third criterion fails when the multiple gap is wide. Do not accept a category label without seeing buyer overlap between the two vendors and the geography of their ARR.

Use the standalone ARR multiple when you believe the faster second step is a durable, defensible business. The downside is that you pay for one company’s growth without a category check. Use the two-vendor category position when the faster second step came from in-house counsel in the largest market and a named rival is at comparable ARR. The cost is that you accept a rival’s pricing power and the risk that the category narrows.

Before underwriting, write down the answers. A round earns a two-vendor category position when the second doubling is in-house and United States-led and a named rival is at comparable ARR. If any check fails, require a lower multiple or a milestone.