For decades, LexisNexis and Thomson Reuters (Westlaw) have ruled the legal research world, forming a near-duopoly in the market for software that lawyers use to analyze cases, draft documents, and cite precedent. But with the rise of AI-powered legal tech, the moat they spent billions building is being challenged like never before.
From startups like Harvey to established players adopting AI tools at record speed, the legal technology industry is entering a new era where agility and artificial intelligence could matter more than legacy dominance. The stakes are massive: the global legal tech market is worth billions, and firms are spending more on software than at any point in history.
The Duopoly That Defined Legal Research
LexisNexis, founded in 1973, and Thomson Reuters have long been the go-to sources for legal research. Together, they invested billions over decades to build comprehensive, searchable, citation-linked databases of case law, statutes, and commentary.
Their dominance is so entrenched that lawyers joke:
“If it’s not in Wexis (Westlaw + Lexis), it doesn’t exist.”
In the first half of 2025 alone, LexisNexis’ parent company Relx reported $1.2 billion in revenue from its legal division, up 9% year over year, driven by firms upgrading to “intelligent” AI-powered tools. Meanwhile, Thomson Reuters has also reported back-to-back quarters of 8% organic revenue growth in its legal segment.
But the launch of OpenAI’s GPT-3.5 in 2022 — and subsequent advancements in generative AI — changed everything. Suddenly, the core function of legal databases (retrieving information and generating written analysis) could be replicated, at least in theory, by large language models.
AI: An Existential Threat and Opportunity
When David Wong, then chief product officer at Thomson Reuters, first saw what GPT could do, the threat was obvious:
“If Thomson Reuters doesn’t do something with this tech to either enhance or replace our products, others will — and we’ll be obsolete.”
The company responded aggressively:
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Acquisition of Casetext – a pioneer in AI-assisted legal workflows.
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Doubling its applied research staff to 260 engineers and scientists.
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Re-engineering its platform with new AI features while integrating with the Amazon Marketing Cloud-style data clean rooms for legal analytics.
LexisNexis has taken a similar path, heavily investing in AI research and development while strategically backing startups like Harvey — an AI legal assistant positioned as an “operating system for law.”
The Rise of Legal AI Startups
AI-native startups are building tools without the burden of legacy systems, giving them speed and flexibility. Some of the most notable players include:
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Harvey – backed by OpenAI and major VCs, aiming to integrate AI seamlessly into law firms’ daily workflows. Harvey is already piloting features that allow searches of Lexis content directly within its AI interface.
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Vlex – recently agreed to a $1 billion acquisition, bundling its research tools with broader legal ops platforms.
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Specialized AI platforms – focusing on contract review, litigation prediction, and e-discovery.
Rather than compete head-on, many of these startups are embedding themselves within existing ecosystems. As Winston Weinberg, Harvey’s cofounder, put it:
“Law firms are becoming more like tech firms, with innovation officers acting like CTOs managing complex stacks of tools.”
Why Incumbents Still Have an Edge
Despite the hype, LexisNexis and Westlaw remain indispensable for now.
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Citation Norms and Precedent – Judges, law schools, and legal professionals rely on their databases as the standard of truth.
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Nonnegotiable Subscriptions – Even firms experimenting with AI tools must still keep Lexis or Westlaw accounts active.
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Strategic Partnerships – LexisNexis invested in Harvey’s $300M Series D, ensuring that new challengers stay partners as much as competitors.
As LexisNexis CEO Sean Fitzpatrick summarized:
“You’re not going to be able to differentiate on technology alone.”
The Expanding Legal Tech Budget
Instead of startups replacing incumbents, the likely outcome is budget expansion.
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Firms are spending record amounts on software.
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New AI tools (contract analyzers, litigation bots, predictive engines) add to, rather than replace, existing subscriptions.
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As law firms behave more like technology companies, the pie for legal tech is growing.
This aligns with the trend across industries: AI adoption rarely cannibalizes spend; it creates new categories.
The Road Ahead
The legal industry stands at a crossroads:
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Incumbents like LexisNexis and Thomson Reuters are racing to embed AI before startups peel away too much share.
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Startups like Harvey are betting on integrated AI-first platforms that reduce complexity for lawyers.
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Law firms are transitioning into hybrid legal-tech enterprises, with CIOs and innovation officers driving procurement decisions.
For the first time in decades, the legal tech duopoly is under real pressure. But whether this leads to disruption or collaboration may depend less on the technology itself — and more on how firms manage their growing digital ecosystems.
