The startup’s Series A round, announced Tuesday (June 9) was led by Lightspeed Venture Partners and will be used to expand Sandstone’s enterprise offering and hire people with expertise in both the technological and legal worlds.
“Our customers run some of the most complex legal organizations in the world. We’re investing in the people and infrastructure to onboard them fast and support them obsessively,” the company said in its announcement. “We’re recruiting across every function for people who understand the profession and the technology — because that combination is the whole point.”
Sandstone said it aims to solve a blindspot for legal teams. While a generic AI tool might be able answer the same questions as a senior lawyer in a way that looks right, it doesn’t understand the firm’s business, making it “confident and context-blind.”
“This is why ‘SaaS is dead, just use an agent’ gets legal exactly backwards,” the company said. “The hard part was never generating the words and replacing them in Word. The hard part is binding them to context — and doing it right.”
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Meanwhile, nearly all legal work defaults to costly frontier models or outside firms, even though reviewing something like an non-disclosure agreement doesn’t require the “horsepower” of hammering out an acquisition.
“Not every task needs the senior law firm or Opus model. Most legal tools can’t tell the difference. We can, because we know what the task actually is,” Sandstone said.
Sandstone is part of a growing number of companies bringing AI into the legal world. In March, Harvey raised $200 million for its legal infrastructure for law firms and in-house teams, in a round that valued the company at $11 billion.
Harvey said its AI-powered products are designed to streamline workflows in contract analysis, due diligence, compliance and litigation.
More recently, Anthropic released several new Claude tools for the legal industry amid increasing demand from attorneys.
“Earlier this year we released our first legal plugin, and in the months since, legal professionals have become the most engaged Claude Cowork users of any knowledge-work function,” Anthropic said in the post. “We’re now building on that with a much larger set of tools.”
As covered here in October, AI has been making inroads into the legal industry, with the technology becoming embedded at law firms’ in-house operations.
“As investors took notice, funding to legal technology startups surpassed $2.4 billion in the first nine months of 2025,” PYMNTS wrote in May. “The surge in funding reflected confidence that automation can relieve the legal sector’s document-heavy workloads and unlock new operating leverage for firms.”
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