Anthropic AI tool for lawyers triggers double-digit plunge in legal software stocks

Legal Software Stocks Plunge as Anthropic Releases New AI Tool

Shares of European legal software and publishing firms dropped after US artificial intelligence firm Anthropic unveiled a tool for companies' in-house lawyers. RELX Plc and Wolters Kluwer NV both fell more than 10% after Anthropic released the tool on its GitHub page. Pearson Plc also slipped. Anthropic said its tool can automate legal work like contract reviewing, non-disclosure agreement triage, briefings and templated responses. Still, it cautioned that the plugin doesn't provide legal advice. "AI-generated analysis should be reviewed by licensed attorneys before being relied upon for legal decisions," the firm said. The share declines came amid broader losses for companies seen as exposed to AI disruption. A UBS Group AG European AI Risk basket of stocks fell as much as 4.7% on Tuesday to a record low.

AI concerns pummel European software stocks

LONDON, Feb 3 (Reuters) - A sell-off in European software, data analytics and advertising companies accelerated on Tuesday, as updated artificial intelligence models raised fresh doubts about whether incumbent firms can defend their business models, underscoring the technology's disruptive threat to sectors once viewed as AI winners. One of the catalysts for Tuesday's selloff was the introduction of Anthropic's legal plug-in, opens new tab for its Claude generative AI chatbot, according to traders and analysts. The move sent shares in both Britain's RELX (REL.L), opens new tab and the Netherlands' Wolters Kluwer (WLSNc.AS), opens new tab, which both provide analytics services to the legal industry, down over 10%. "The software companies were assumed to be winners from AI," said Lars Skovgaard, senior investment strategist at Danske Bank. "But all of a sudden, you start to worry about whether you can earn the money back (from your AI investments), and/or will you be outsmarted by updates coming in." Shares in RELX have now slumped over 45% from their peak last February. The dramatic reversal in RELX's share price, which had become one of the 10 largest listed companies in Britain last year, is an example of the impact AI is having on Europe's software sector. Germany's SAP (SAPG.DE), opens new tab, which less than a year ago was Europe's most valuable company, slumped over 16% last week, after its cloud revenue forecast failed to meet expectations, which wiped off $40 billion in one day. Its shares were down 1.9% on Tuesday and down 40% from last year's high. "We maintain the view that deflationary pressure on software-sector multiples could persist as long as the organic monetisation of AI is not clearly demonstrated," said Maximilien Pascaud, analyst at Baader Bank in a note where he cut his target on SAP, while keeping an add rating. Other companies that specialise in professional services were also down. Experian (EXPN.L), opens new tab, Sage Group (SGE.L), opens new tab, London Stock Exchange Group (LSEG.L), opens new tab and Pearson (PSON.L), opens new tab were down between 4.2% and 8%. ADVERTISING COMPANIES HIT Advertising companies were also under pressure. France's Publicis (PUBP.PA), opens new tab shares dived over 8.5% after the company's results. Publicis, the world's largest advertising group by market capitalisation, said it had earmarked approximately 900 million euros ($1.06 billion) for acquisitions in 2026, focusing on AI-powered technologies and data assets. According to a Barclays survey of buy-side investors published on Monday, advertising agencies are seen as the most exposed part of European media to artificial intelligence, with WPP (WPP.L), opens new tab, Omnicom (OMC.N), opens new tab and Publicis ranked the top "AI losers". Analysts at the bank said companies could most effectively shake off an "AI loser" label by launching and clearly promoting revenue‑generating AI products. ($1 = 0.8481 euros) Reporting by Samuel Indyk and Danilo Masoni; Editing by Amanda Cooper Our Standards: The Thomson Reuters Trust Principles., opens new tab

Anthropic's launch of AI legal tool hits shares in European data services firms

Stocks in Pearson, London Stock Exchange Group and Experian plunge amid fears over impact of AI European publishing and legal software companies have suffered sharp declines in their share prices after the US artificial intelligence firm Anthropic announced a tool aimed at companies' in-house lawyers. The UK publishing group Pearson's shares fell by 4%, while the information and analytics firm Relx plunged nearly 11% on the London stock exchange, and the Dutch software company Wolters Kluwer dropped almost 9% in Amsterdam. Stocks in the London Stock Exchange Group and the credit reporting company Experian fell by more than 7%, amid fears over AI's impact on data companies. Anthropic, the company behind the popular chatbot Claude, said its tool can automate legal work such as contract reviewing, non-disclosure agreement triage, compliance workflows, legal briefings and templated responses. However, it said the plugin does not provide legal advice. "AI-generated analysis should be reviewed by licensed attorneys before being relied upon for legal decisions," the startup said. Anthropic also unveiled a number of other open-source tools to automate a range of professional activities, including sales and customer support. The news will reignite fears of job losses caused by the AI boom. The UK is losing more jobs than it is creating as companies adopt more AI tools, and is being hit harder than rival large economies, according to a study by the investment bank Morgan Stanley. More than a quarter (27%) of UK workers are worried their jobs could disappear in the next five years as a result of AI, a recent survey of thousands of employees showed. It found that British businesses reported an average 11.5% increase in productivity aided by AI. US businesses reported similar gains, but created more jobs than they cut. In his annual Mansion House speech last month, the London mayor, Sadiq Khan, said AI could destroy swathes of jobs in the capital. He said London was "at the sharpest edge of change" because of its reliance on white-collar workers in the finance and creative industries, and professional services such as law, accounting, consulting and marketing. Anthropic was founded in 2021 by Dario Amodei, its chief executive, and other former staff members from OpenAI, which developed ChatGPT.

Data service stocks plunge up to 10% as Anthropic releases AI in legal space

Shares of legal software firms and other data service companies plunged on Tuesday after Anthropic released a new AI automation tool that investors worry could eat into much of their core businesses. RELX Plc and Wolters Kluwer NV, both providers of professional analytics, fell more than 10%. Other software companies dropped, credit-reporting firm Experian Plc slid 9.0% while financial data provider London Stock Exchange Group Plc. Thomson Reuters Corp., Legalzoom.com Inc. and FactSet Research Systems Inc. all slipped around 10% or more. The iShares Expanded Tech-Software Sector ETF fell as much as 4.4%, while a UBS Group AG basket of European stocks deemed at risk of AI disruption fell nearly 7%. "Anthropic launched new capabilities for its Cowork to the legal space, heightening competition within the space," wrote Morgan Stanley analysts include Toni Kaplan in a note on Thomson Reuters. "We view this as a sign of intensifying competition, and thus a potential negative." Anthropic is part of a rash of AI startups developing tools for the legal industry. Long before Anthropic's plugin, startups including Legora and Harvey AI, were flooding the legal AI space, offering tools that they've marketed as saving lawyers from grunt work. Investors have been pouring money into AI products for the legal industry for more than two years now, with Harvey AI being valued at $5 billion last year and Legora raised funds at a $1.8 billion valuation. Anthropic stands in contrast, however, in that it builds its own models that can be customized for an industry's specific needs. Its position in the AI ecosystem as a major model developer gives it the unique advantage of disrupting both traditional legal news and data services as well as legal AI upstarts. Firms like Legora rely on the underlying models from developers like Anthropic. On its website of plugins, Anthropic included a legal tool that it says can automate work like contract reviewing and legal briefings. "All outputs should be reviewed by licensed attorneys," according to the website. Perceived risks to the software industry have been simmering for months, with the January release of the Claude Cowork tool from Anthropic supercharging disruption fears. Video-game stocks got caught up in the slide last week after Alphabet Inc. began to roll out Project Genie, which can create immersive worlds with text or image prompts. Among US public companies, so far this earnings season just 71% of software companies in the S&P 500 have beaten revenue expectations, according to data compiled by Bloomberg. That compares with 85% for the overall tech sector. Bloomberg LP, the parent of Bloomberg News, competes with LSEG and Thomson Reuters in providing financial data and news. "This year is the defining year whether companies are AI winners or victims, and the key skill will be in avoiding the losers," Stephen Yiu, CIO of Blue Whale Growth Fund. "Until the dust settles, it's a dangerous path to be standing in the way of AI," said Yiu.

Thomson Reuters Shares Slide After Anthropic Unveils AI Tool Targeting Legal-Workflow Business

Shares of Thomson Reuters fell sharply Tuesday after artificial intelligence company Anthropic revealed a new legal automation tool that threatens to encroach on the company's core contract-review and workflow-software business. Shares trading in Toronto were down more than 17% to 123.21 Canadian dollars ($90.06). Anthropic, the maker of Claude, released a new legal tool aimed at helping companies speed up routine legal work, such as review contracts, sort nondisclosure agreements, handle compliance workflows, prepare legal briefings and draft standard responses. The new tool touches a sensitive area for Thromson Reuters, whose legal software platforms such as Westlaw, Practical Law and CoCounsel, offer similar capabilities and have been a major focus of the company's push to integrate generative AI across its products. Legal Professionals is one of Thomson Reuters' "Big 3" business segments. It generated roughly half of the company's $1.46 billion revenue in the most-recent quarter. While Thomson Reuters offers a large legal database and stores of archives for the industry, the threat is more to the company's workflow automation layer that has become a major growth focus for the company. Chief Executive John Hasker told investors in November that Thomson Reuters expects to continue investing heavily in generative AI, with spending expected to exceed $200 million in 2025 and in 2026. Two of Europe's largest professional information companies, RELX and Wolters Kluwer, began the stock cascade Tuesday following the Anthropic news. The two companies both have large businesses built around legal research, compliance tools and workflow software. Earlier in the week, National Bank of Canada downgraded the stocks target price to C$190 from a previous C$300. The stock has seen a nearly 50% decline over the past 52 weeks. Analyst Adam Shine said the decline comes as investors shift more of their attention toward AI-driven demand for computing power, such as the chips and processing units that run massive data centers. At the same time, he adds that markets are growing more cautious that AI could eventually reduce the need for traditional software licenses and workflow tools. Write to Adriano Marchese at [email protected]