Young Lawyers Abandon Big Law Firms for Startup Opportunities in Legal Tech

Last spring, Laura Toulme, a young lawyer, made a significant career shift from the traditional path at Hecker Fink to join Harvey, an AI-powered legal-tech startup. Her decision came after a compelling conversation with an early employee of Harvey, who painted a vision of the future where legal workflows could be transformed using AI. Toulme, like many of her peers, felt this was an opportunity she couldn't afford to miss, sensing the dawn of a new era in the legal industry. This trend is not unique to Toulme. An American Bar Association (ABA) survey reveals that over 6% of 2024's law school graduates are opting for business and industry roles, marking a significant departure from the conventional route of joining law firms. While the majority, 54%, still find themselves in law firm positions, a growing number are embracing startups focused on legal technology. Harvey, Legora, and Eudia are leading examples of these companies, which are attracting young talent with the promise of innovative, high-impact work. Jonathan Melke, a recent law school graduate, also took the plunge from a prestigious global law firm, Hogan Lovells, to Legora. His transition was driven by a desire to contribute to the future of law through technology. Melke recalls a pivotal LinkedIn conversation with Legora’s founder, Max Junestrand, where he was persuaded by the startup’s mission to automate routine legal tasks, freeing lawyers to focus on strategic thinking. Melke’s motivation was clear: "I want to build the future." The shift towards legal tech is fueled by multiple factors. Historically, young lawyers hesitated to join tech companies, fearing it might hinder their prospects of returning to a law firm. However, this perception is changing. Omar Haroun, a seasoned legal tech entrepreneur, notes that securing capital and hiring lawyers for startups has become much easier. This change is partly due to the burgeoning legal tech sector, which raised over $2 billion in funding last year, according to PitchBook data. Law firms and lawyers are increasingly adopting AI to improve their efficiency and reduce costs. Anna Barber, a venture capitalist at M13 and a Yale Law School graduate, explains that legal work, being highly logical and rule-based, is well-suited to AI applications. Junior associates, who traditionally handled mundane tasks like document review and legal research, are being replaced by AI. This automation has not driven young lawyers away, but rather, it has inspired many to join the startups creating these technologies. Both Harvey and Eudia boast that law school graduates make up over 20% of their teams. Peggy Gartre, a career counselor at the Dean School of Law at Hofstra University, observes that many young lawyers are disillusioned with the traditional legal practice, citing issues like excessive billable hour quotas and heavy workloads. Kimberly Kappler Fine, who runs a platform for lawyers transitioning from law to industry, adds that the elongating path to partnership at major law firms is another deterrent. Additionally, the political climate under President Trump, with his executive orders targeting law firms, has added to the dissatisfaction with the conventional legal career. Nehan Sethi, another young lawyer, left her associate position at Campbell Teague to join Harvey's business development team. Sethi’s role involves demonstrating the startup’s AI platform to potential clients, leveraging her legal expertise to highlight how it can specifically address their needs. Her involvement as a lawyer on sales calls has proven invaluable, as it lends credibility and ensures that the product meets the demands of the legal audience. Sethi attributes her decision to the chance to create meaningful change and the exciting, dynamic nature of startup work. While startups offer enticing benefits like flexible hours, mission-driven work, and the potential for substantial financial upside through stock options, they cannot match the lucrative salaries of Big Law firms. Starting salaries at top law firms can exceed $225,000, with equity partners earning even more. Toulme, now at Harvey, acknowledges that the startup’s compensation, despite being generous, falls short of her previous earnings. This discrepancy is often balanced by the promise of stock options that could become valuable if the company succeeds. The risks associated with joining startups are genuine. Many venture-backed companies never reach an initial public offering (IPO), and even those that do may take a decade or more to provide substantial returns. Founders might reorganize roles, pivot products, or sell the business on unfavorable terms. Despite these uncertainties, the allure of shaping the future of legal practice and the excitement of innovation keep young lawyers engaged. Industry insiders see this trend as a positive development. Max Junestrand of Legora highlights the transformative potential of AI in the legal field, while Anna Barber praises the logical fit between AI and legal work. Omar Haroun, the founder of Eudia, points out that the increasing acceptance of AI in law firms opens more doors for tech-savvy lawyers, who are now seen as valuable assets. Ultimately, whether the gamble on startups pays off in financial windfalls or leads to a startup’s closure, young lawyers like Toulme, Melke, and Sethi are making moves that reflect a broader shift in the legal industry. They are embracing the uncertainty and excitement of creating something new, rather than sticking to the well-trodden, high-pressure path of Big Law. Their choices signal a willingness to adapt and innovate, qualities that are essential in the evolving landscape of legal technology and practice.