Robert Ambrogi Blog
Relativity is holding firm on its plan to require that all new matters be hosted in the cloud beginning Jan. 1, 2028, CEO Phil Saunders said Thursday, and he had a blunt message for partners who are not on board: “Know we’re going to run through you.”
Saunders made the comments during a media briefing on the last day of Relativity Fest in Chicago, where he and Chris Brown, who was named president in July, took questions from reporters.
Asked by me whether the company is sticking to the deadline it announced in January 2025 to require that all new matters be hosted on its cloud platform rather than its legacy Relativity Server, Saunders quickly answered, “Yes.”
“The policy is not to end the life of Server,” he said. “The policy is to make sure that no net new matter is going to Server effective Jan. 1.”
Three Buckets of Partners
Saunders said he delivered the same message earlier in the week at a briefing for several hundred of the company’s partners – the companies and consultants who are central to distributing and implementing Relativity for legal, investigative and compliance teams.
He described partners as falling into three buckets. The first are “super duper aligned,” already sending new workspaces and data to the cloud, adopting the company’s AI capabilities, and collaborating with Relativity on the end customer.
At the other extreme, he said, there are some that are “just not aligned.” He attributed that to business models built around buying Server as a capital expense and depreciating it over time.
In between are those “we would politely call hybrids,” doing some of both. “We don’t blame them for that,” he said, noting that many of their customers remain on Server.
Saunders said partners that ignore the deadline are serving their own pockets, not the end customer. He said that even Relativity earns less from the cloud.
“We make a lot less money on Relativity aiR than we do on Server, like a lot less,” he said. “But it doesn’t matter. It’s about disrupting yourself to service where the market and business is going.”
For partners on the fence, he said, Relativity has budgeted “credits and money and effort” to help them move from a capital-expense to an operating-expense model.
“The aligned partners are going to win,” he said, “and the non-aligned partners – let’s talk about it.”
Saunders said that as of the end of June, nearly 84% of the company’s annual recurring revenue was in Relativity aiR, the name the company recently gave its cloud platform, formerly RelativityOne.
When it announced the deadline in January 2025, the company put the figure at more than 75%.
Frontier Labs Before Harvey and Legora
Saunders also said Relativity is prioritizing partnerships with the frontier AI labs over integrations with legal AI companies such as Harvey and Legora.
A reporter at the briefing, Stephanie Wilkins, director of content at Legaltech Hub, brought up the fact that at last year’s briefing, Saunders said he was in conversations with the founders of both companies. Those conversations continue, he replied, but the priority lies elsewhere.
“Our strategy, at least at this point, is to spend a lot of time with the frontier models,” he said, citing Anthropic, OpenAI and Google. “It doesn’t mean that we wouldn’t consider Harvey or Legora, but prioritization is probably at the frontier labs at this point.”
His reasoning is that corporate customers tell Relativity they run more than one frontier model, often alongside Harvey, Legora or both, and that the frontier labs are the surest to endure.
“I don’t think Harvey and Legora are going away anytime soon,” he said. “I think these are real valuable, high-performing companies.”
But he said Relativity expects there will be at least one frontier model “on the desktop of every law firm, of every company on the planet that we serve.”
Brown added that has been the plan all along. “That really has been our intent, to go to the frontier models, frontier labs first,” he said.
In 2027, Brown said, Relativity will make matter intelligence available through its MCP connector, so that an authorized user working in a tool such as Claude could query a matter as they would inside Relativity.
Saunders said the first job, however, is getting claiR, the company’s conversational AI interface, right as a native experience.
“If we don’t get that right, how we surface it up in other locations won’t matter,” he said. “It’ll be just a mediocre offering.”
Gavel Integration Coming This Year
Asked about the integration of Gavel, the document automation company Relativity acquired in June, Brown said it will enter the company’s advanced access program this year.
“Gavel’s going into advanced access momentarily,” he said. “I can’t give you a date specifically, but it’ll be this year.”
Brown described the goal as keeping work product connected to the evidence. A lawyer who builds a deposition outline tied to specific documents should be able to open it in Word, share it with collaborators and have redlines sync back, he said.
He suggested the approach could extend beyond Word to Excel and other tools, and said customers have asked him about trial preparation.
Saunders said Gavel’s chief technology officer, Pierre Martin, “has taken on a much bigger role here at Relativity.”
“It’s more than just good tech,” Saunders said. “It’s good people.”
‘Not Out Here to Flip This Company’
Although a company spokesperson opened the briefing by saying executives could not discuss Relativity’s confidential IPO filing, Saunders addressed it anyway.
He said the company publicly confirmed the filing only because Bloomberg had reported it, and that the announcement did not signal the company is for sale.
“We’re not out here to flip this company,” he said. “We’re out here to build a really great company.”
He said there is no concrete timeline. “The market is a really unstable thing, and maybe one day when that settles out, something will happen,” he said.
Saunders said that Silver Lake continues to own the largest share of the company, although still a minority investor. Founder Andrew Sieja and investor ICONIQ each own nearly 25%, and every employee holds equity.
Other News from the Briefing
Among other news that came out of the briefing:
- R&D spending. Saunders said Relativity reinvests more than $200 million a year in research and development, roughly 27% of revenue, compared with about 17% for most technology companies. “Probably not allowed to say this, but we’re over budget this year and the board says keep on going,” he said. The spending goes, in order, to the core platform, aiR and claiR.
- Where it won’t go. Asked where the company draws its boundaries, Saunders said, “We’re not interested in being the Swiss Army knife for law.” Transactional law, he said, is probably not an area where Relativity will spend much time.
- Legal authority. Brown said Relativity is exploring bringing outside sources such as regulations and legal research into the platform to add context to matter work, but has not settled on an approach.
- KPMG. Brown confirmed that KPMG is the first Big Four firm in the claiR advanced access program. Saunders said KPMG represents Relativity’s platform in 22 countries.
- Singapore. Brown said the company expects to announce an opening in Singapore next month.