Harvey AI, a generative artificial intelligence startup focused on the legal profession, announced Tuesday that it has secured a $80 million Series B funding round that raised the company’s valuation to $715 million.

The funding round was co-led by Elad Gil and Kleiner Perkins with participation from OpenAI’s startup fund, the developer of the popular ChatGPT AI chatbot, and Sequoia. This funding round follows Harvey’s previous $21 million Series A funding round in April and brings the company’s total funding to over $100 million.

Generative AI has become a powerful tool for professional services and companies with its capability to ingest large amounts of data on any subject matter to understand unstructured information and respond conversationally to natural language prompts and questions. The large language models behind AI chatbots can engage in humanlike conversation after being connected with vast amounts of knowledge. That includes confidential sources, such as legal documents, which means they can summarize large documents, act as research assistants, write and edit legal briefs, and more.

However, the general-purpose models can have downsides such as inaccuracies when it comes to domain-specific knowledge. In one infamous example, a New York lawyer used ChatGPT, a general-purpose AI chatbot, to write a legal brief and submit it to a court. The result was riddled with errors and false citations and put him in legal trouble.

Equally problematic, information sent to ChatGPT is not secure or private. It’s subject to human review by third parties and could reveal sensitive client information opening up ethical issues for lawyers.

To address these issues, Harvey AI sought to build its own proprietary service based on OpenAI’s GPT-4 AI model to provide greater legal accuracy, security and privacy to a growing number of law firms in an invite-only service that catered to their specific needs. The waitlist has been tight, but several customers have already joined including Allen & Overy, which joined in February, and Macfarlanes in September.

PricewaterhouseCoopers LLC, the large accounting firm, partnered with Harvey AI in March to roll out a legal chatbot and signed a 12-month contract. “Harvey’s AI solution marks a huge shift in the way that tax and legal services will be delivered and consumed across the industry,” Carol Stubbings, PwC’s global tax and legal services leader, said about the partnership.

By making an AI model that focuses on legal knowledge instead of a general-purpose model, the Harvey AI chatbot can avoid what is known as “hallucinations,” or when an AI makes confident false statements. The company said that it intended to build its custom AI models by integrating the legal best practices of the firms that it works with such as tiered reviews and transparency. The company said that’s because legal work is based on reputation and establishing trust.

Harvey AI said that engagement with its legal generative AI platform has “increased exponentially” and that revenue has risen more than tenfold since April.

The company said that it will use the new funds to continue to expand its custom model building based on domain-specific legal knowledge, scale out its team, and invest in further product features for clients.

Image: Harvey