Norm, a company that uses artificial intelligence to handle legal and regulatory work, has raised $120 million in funding at a valuation of $1.2 billion, according to TechCrunch and a press release. The funding was led by Khosla Ventures. Norm is only three years old.

Investors include major financial firms like Vanguard and New York Life, as well as venture capital firms and law firm Fenwick LLP. The company has now raised over $260 million total.

Norm does two main things. First, it built software that knows the rules and regulations of heavily regulated industries like finance. This software runs on AI agents—think of them as digital workers that can make decisions and take actions without being told every single step. These agents can also check the work of other AI systems to make sure they are following the rules. Second, Norm launched Norm Law in late 2025, an AI-powered law firm where these digital agents do actual legal work. Human lawyers review and approve what the agents produce before it goes to clients. Blackstone invested $50 million in Norm Law separately.

How Norm charges customers is different from how most law firms work. Traditional law firms bill by the hour: a lawyer works, logs the time, and you pay for each hour. Norm instead charges based on results. If the legal work solves your problem, you pay. If it does not, you pay less or nothing. It is unclear whether this model will work as the company grows.

The $120 million will be used to build better software and hire more lawyers. Norm is adding human lawyers alongside its AI rather than replacing them. The company is also creating AI agents that can watch over other AI agents—because as more AI systems enter regulated industries, someone has to check that they are doing things correctly, and human reviewers alone cannot keep up with the volume.

Who is investing matters. Vanguard and other insurance and investment firms are typically not early investors in new technology startups. That they are investing in Norm suggests these large financial institutions are actual customers and believers in the idea. A law firm also investing is interesting because AI law firms will compete directly with traditional law firms, yet Fenwick decided to invest anyway.

The big question is whether regulators and law firms will accept legal work done by AI and reviewed by humans, rather than done primarily by humans. For now, Norm's first clients in finance will show whether this idea actually works.

Norm operates from multiple web addresses: norm.ai for the main company, normlaw.com for the law firm, and uses normative-ai on LinkedIn.