This consultant advised Big Law at McKinsey. Now Sequoia is backing his AI startup for in-house lawyers.

• Sandstone has raise a funding round led by Sequoia Capital to bring AI to in-house legal teams.
• The startup aims to build a system of record for legal teams to conduct and track legal work.
• Sandstone's CEO Nick Fleisher previously advised major law firms as a McKinsey consultant.

Big Law has a complicated relationship with artificial intelligence. The tools that make lawyers more efficient could result in fewer billable hours.

Nick Fleisher learned that the hard way at McKinsey, where he helped elite law firms roll out tech tools, often with little enthusiasm from the lawyers expected to use them.

"It was like pulling teeth," Fleisher said.

That work led Fleisher to leave McKinsey and start a company in August. His startup, Sandstone, is aimed squarely at in-house legal teams instead of law firms, and Sequoia Capital is backing the idea.

The Brooklyn-based startup has raised $10 million in a seed funding round led by Sequoia Capital, Business Insider has learned. Backers include Kearny Jackson, SV Angel, the Chainsmokers' Mantis VC, Daybreak Ventures, and a group of corporate general counsels from companies including eBay and Bilt.

Sandstone uses AI to help lawyers inside companies draft and review contracts based on how they've handled similar agreements in the past.

McKinsey hired Fleisher out of the Wharton School. He landed on a team advising major law firms and worked closely with QuantumBlack, the firm's AI unit, including on a project with the American Arbitration Association to develop an "AI arbitrator" for construction disputes.

In his final months at McKinsey last year, Fleisher ran dozens of workshops for general counsels who, he said, couldn't justify a full McKinsey engagement but wanted enough context to build their own tech strategies.

Fleisher said many in-house teams were still wrestling with the basics: whether they were using their contract lifecycle management software correctly, how they tracked outside legal spend, and where their data actually lived.

He was struck by how quickly that posture began to change. Increasingly, Fleisher said, general counsels told him they had a mandate from the CEO or board to adopt AI — even before there was clarity on how it would affect costs or head count.

While off-duty at McKinsey, Fleisher teamed up with a colleague, Jarryd Strydom, a former technology lawyer who also codes, to build a task tracker for lawyers. They shared it with a handful of in-house lawyer friends, who began using it, helping validate the idea. The pair pitched Sequoia on their last day at McKinsey.

Sandstone has several dozen paying customers, mostly midsize companies that have several lawyers on staff. Software companies make up a large share of its user base, Fleisher said, though the company also works with clients in manufacturing, finance, logistics, and insurance.

Sandstone's pitch isn't new. Harvey got its start selling tools to elite law firms and has since expanded into large enterprises. Clio, a platform for managing cases, built a legacy serving small law firms and is now pushing into the enterprise with a new division aimed at in-house teams. A growing crop of startups is developing tools to crank out contracts and scan the ones that land in the legal inbox.

What Fleisher says was missing was a system of record for corporate legal teams: a single place to conduct legal work, pull in context from systems like email and Salesforce, and track what the legal team is actually doing day-to-day.

"There's no platform that in-house lawyers think of as their core operating system," Fleisher said. "We can be that home."

Sandstone is built for lawyers, but it's designed to handle the constant knocks on their door from the rest of the company. A salesperson can drop a draft agreement into Slack and have Sandstone review it. Fleisher says the system compares the contract against the company's past deals, house style, and sales call notes sitting in Salesforce — then flags risks and suggests edits before routing the draft to the right lawyer for approval.

If successful, Fleisher said, Sandstone could help lawyers spend less time sorting requests and more time weighing the calls that actually need a human decision.

Bogomil Balkansky, a Sequoia partner, was first introduced to Fleisher through the firm's talent team, which flagged the consultant as someone to keep close. Initially, Balkansky tried to recruit Fleisher to help run a portfolio company.

After several meetings, Fleisher told Balkansky he wanted to start his own legal tech company instead. Sequoia decided to lead Sandstone's seed round.

The bet comes as investor interest in legal tech is accelerating. Funding in the sector nearly doubled last year, rising from $2.2 billion in 2024 to $4 billion in 2025, according to Crunchbase. More than a third of that funding flowed into just three companies: Harvey, Clio, and Filevine, a system for managing legal work.

Sequoia backed Harvey at an early stage and last year led a seed round for Crosby, a startup that combines software with lawyers to handle contracts for early-stage companies. Asked about investing in companies that could eventually compete, Balkansky said Sequoia's criterion comes down to whether a market is big enough to support multiple winners.

"AI is transforming human labor into software," Balkansky said, and the legal industry is especially ripe for change. There are more than a million lawyers in the US, many of them among the most expensive professionals companies hire.

Fleisher's bet is that the place legal AI sticks isn't where lawyers bill by the hour, but where they're measured by how fast the business moves.

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