Legal tech startups are moving forward with confidence despite growing concerns that OpenAI could eventually enter their space. While the AI giant has not launched public tools for legal work, its recent blog post detailing internal contract and sales assistants — including a tool dubbed "DocuGPT" — sparked anxiety across the industry. The post coincided with a sharp drop in DocuSign’s stock, amplifying fears that infrastructure providers could evolve from enablers into direct competitors. Still, many legal tech founders believe their businesses are built on moats too deep for OpenAI to easily replicate. Rather than building general-purpose AI tools, these startups focus on narrow, high-value domains where domain expertise and workflow integration matter more than raw language ability. Ryan Daniels, founder of Crosby, a contract review service that uses AI to analyze routine master service agreements in under an hour, isn’t worried. His company operates more like a legal service provider than a software vendor. It relies on human lawyers and paralegals to review AI-generated outputs and refine the models, a layer of expertise that would be costly and time-consuming for OpenAI to replicate. “On some level, I think everybody should be worried about OpenAI,” Daniels said. “But we work closely with their teams. They’re helping us build better applications on their platform.” Crosby recently raised $20 million in an early-stage round led by Bain Capital Ventures and Index Ventures. The funding came despite closing a seed round just months earlier — a sign that investors see strong defensibility in the company’s model. Other legal tech firms are also seeing strong investor interest. EvenUp, a tool for personal-injury lawyers that automates demand letter drafting, announced a $150 million Series E. Its competitor Eve, which serves a wider range of plaintiff firms, raised $103 million in a Series B. Meanwhile, Spellbook, which focuses exclusively on contract drafting and analysis, closed a $50 million Series B led by Keith Rabois, an early Airbnb investor. Spellbook’s strategy centers on depth: its Word plug-in is trained on 10 million contracts and fine-tuned to match a firm’s specific style. Founder Scott Stevenson doubts that a lawyer could build a custom GPT that matches the precision and integration of Spellbook’s tool. Still, the threat remains. OpenAI has already built an internal contract data agent that cuts review time in half. Microsoft, with its Copilot integration, could also push deeper into legal workflows, potentially undermining standalone tools. But experts like Jennifer Berrent, a former WeWork lawyer now running a tech-enabled fund document review firm, remain optimistic. “There was a time when every startup said, ‘Google could build that,’” she said. “They could, but they can’t build everything.” For now, the legal tech sector is betting that specialization, human-in-the-loop processes, and deep workflow integration will keep them ahead of even the most powerful AI platforms. The real question isn’t whether OpenAI could enter the space — it’s whether it will choose to.