New Delhi: A few days ago, Anthropic rolled out a new AI plugin aimed at shaking up the legal world, and it’s already causing big waves in the stock market.
This plugin for their Claude AI is designed to handle everyday legal tasks like reviewing contracts and spotting risks. Investors got spooked, leading to sharp drops in shares of companies that make legal software and data tools.
The tool promises to make routine work quicker, though the company warns that lawyers should always double-check the results.
What is the Legal tool from Anthropic?
Anthropic calls it a legal plugin for their Cowork system. It’s part of Claude, their large language model. Cowork lets users build workflows without needing to code much. The plugin customizes Claude for legal jobs. For example, it can review documents, flag potential issues in NDAs, and check for compliance.
According to reports, the company stated, “Anthropic is releasing plugins for Cowork that extend Claude’s agentic capabilities beyond general tasks into specialized business functions. Plugins bundle skills, connectors, slash commands, and sub-agents that make Claude work like a domain expert for specific roles and teams, sales, finance, legal, data analysis, marketing, customer support, and more.”
How does Anthropic’s Legal tool work?
Think of it like giving Claude a legal playbook. It loads guidelines from your organization’s standards. If there’s no playbook, it falls back on general commercial rules. The tool reads the whole contract first, figures out the type like a SaaS deal or partnership, and checks which side you’re on, vendor or customer.
It dives into key parts. For limitation of liability, it looks at caps on damages, whether they’re mutual, and any exceptions. Common problems it spots include low caps based on recent fees or one-sided carveouts. There’s even advice on redlining, where you suggest exact changes with reasons, plus fallback options if your first idea gets rejected.
Anthropic stresses balance in suggestions, not going too aggressive to avoid slowing deals. They shared on their GitHub, “Be specific: Provide exact language, not vague guidance. The redline should be ready to insert.”
Why did stocks tumble?
The news hit hard on February 3, 2026. Shares in legal tech firms tanked. RELX Plc and Wolters Kluwer NV each dropped over 10 percent. Experian Plc fell 9 percent, while others like Thomson Reuters Corp. and Legalzoom.com Inc. slid around 10 percent or more. Even the London Stock Exchange Group dipped 8.5 percent.
Analysts pointed to rising competition. Morgan Stanley’s team, including Toni Kaplan, said, “Anthropic launched new capabilities for its Cowork to the legal space, heightening competition within the space.” They added, “We view this as a sign of intensifying competition, and thus a potential negative,” as reported by Bloomberg.
It’s like when ride-sharing apps disrupted taxis. Investors worry this AI could eat into profits of traditional legal software sellers. A UBS basket of European stocks vulnerable to AI sank nearly 7 percent too.
