The First AI-Only Law Firm Is Licensed. What Happens Next Will Redefine Legal.
- jayleviste
- Jul 7
- 3 min read
First, GPT-4 passed the bar. Now, Garfield AI, a firm operating without traditional law firm roles, has been approved by the U.K.’s Solicitors Regulation Authority (SRA). No partners, no associates, no hourly billing. It’s just code and outcomes, with regulated solicitors ensuring compliance and quality.
Garfield helps consumers recover invoices up to £10,000 through the English small claims court. It’s the first time a software-driven system has been authorized to operate as a law firm.. And it won’t be the last.
AI Isn’t Coming for Law. It’s Already Here.
Garfield is a signal. Legal services are being rebuilt from the ground up by software-native operators, founders, who start with code, not case law. And they’re doing it in places traditional firms can’t reach.
There’s massive unmet demand: 92% of low-income Americans get no or inadequate legal help in civil matters. (1) Nearly half cite cost as the reason they don’t even try. (2) AI-only firms are stepping in where the market has failed.
AI isn’t just cheaper, it can outperform humans. In one study from Stanford and Anthropic, GPT-4 was 64% more persuasive than humans in negotiation when both had access to personal data. (3) Surprisingly, humans performed worse with data than without it, while GPT-4 adapted, strategized, and extracted value from complexity. (To be clear, the study focused on negotiation, not legal representation.)
Across typical legal services, tools are improving rapidly, making legal work faster, more accurate, and more cost-effective. Contract review tools help lawyers draft faster and more accurately. AI cuts intake time from 3 days to 3 minutes. Drafting tools reduce litigation costs by 20%+ while improving consistency. (4)
Regulators Are Giving the Green Light
The SRA’s decision isn’t happening in isolation. Arizona and Utah have implemented ABS legal reforms allowing non-lawyer ownership of law firms. Washington is preparing a pilot program, while California, Michigan, and North Carolina are studying similar changes. The District of Columbia also allows limited non-lawyer partnerships. Ontario is developing AI ethics rules. The EU is regulating legal AI at the system level. The message is clear: the shift isn’t hypothetical. It’s institutional.
Today’s founders are not just unbundling the law firm, we’re reassembling it as code.
Law Firm 2.0: Fully Automated Tech Stack
Here's what the AI-powered law firm stack looks like today, where automation is replacing or amplifying traditional functions. AI can either fully replace outsourced call centers and manual forms as voice agents handle intake or Garfield autonomously negotiating small claims, or collaborate with them as powerful copilots for research, drafting, and analysis.
Function | AI Role | Example |
Intake | Voice/chat agents | Claim intake in personal injury and immigration |
Research | LLMs | Case law, regulatory lookup |
Drafting | GenAI + templates | NDAs, leases, pleadings |
Negotiation | Smart workflows | Debt resolution, settlements |
Resolution | ODR platforms | Divorce, small claims, consumer disputes |
What This Means for Builders, Backers, and the Old Guard
To investors, these companies aren’t just legaltech startups, they’re legal infrastructure. Think Stripe for access to justice. They will become the rails that run the new legal economy.
To law firms: What processes can AI replicate for you? What is your edge when technology can automate your legacy workflows in 30 days?
The Future Isn’t Coming. It’s Already Licensed.
The SRA didn’t start a revolution, it acknowledged one. Legal systems around the world are shifting toward outcome-based regulation. You have the choice to move quickly and be augmented (10x’d lawyer) or see legacy workflows replaced.
The only question left is: will you build the future, or wait to be regulated by it?
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Legal Services Corporation, Justice Gap Report 2022
The Justice Gap: The Unmet Civil Legal Needs of Low-income Americans
Technology Review, AI can do a better job of persuading people than we do
ABA, AI Law Techshow
