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Building Domain-Specific AI Agents with LangGraph and Pydantic AI

We plugged a general-purpose LLM into an insurance claims workflow and watched it hallucinate policy numbers, skip mandatory fraud checks, and approve a claim that violated three separate compliance rules. The model was brilliant at conversation. It was terrible at doing the actual job. That single failed demo changed how we think about AI agents: stop trying to make one model do everything. Instead, give it structure, domain constraints, and a workflow it cannot deviate from. When we rebuilt the same claims pipeline using LangGraph for orchestration and Pydantic AI for validation, every claim followed the correct adjudication path, every field passed schema checks, and the fraud detection gate caught the same synthetic claim the general model had rubber-stamped.

The core problem is straightforward. General-purpose LLMs optimize for breadth. Medical AI needs to understand drug interactions while respecting HIPAA. Financial advisory agents must navigate suitability rules while generating personalized strategies. A chatbot that can also write poetry adds zero value when you need it to never miss a required field on a regulatory form.

Domain-specific agents solve this by combining structured workflow orchestration (LangGraph) with type-safe data validation (Pydantic AI). The result is an agent that thinks like a domain expert while enforcing the reliability guarantees that production systems demand. These agents understand the semantics of their domain, follow industry-specific processes, and integrate deeply with specialized tools and databases.

What Makes Domain-Specific Agents Different#

The Specialization Paradigm#

A general-purpose AI is a well-educated generalist who can discuss many topics but misses subtle professional nuances. A domain-specific agent is the seasoned practitioner who knows the unwritten rules, common pitfalls, and best practices that come from years of field experience.

Three core components define the specialization:

Domain Knowledge goes beyond vocabulary. For a medical agent, “hypertension” is not just a synonym for high blood pressure. It carries associations to cardiovascular risk scores, treatment protocol hierarchies, and contraindication chains that a generalist model simply does not encode.

Workflow Patterns represent the structured sequences professionals follow. These are not simple if-then rules. They are sophisticated decision trees that account for context, exceptions, and professional judgment. A legal document review agent does not keyword-search a contract. It follows the same systematic approach a lawyer would use.

Integration Points connect the agent to the ecosystem of tools, databases, and systems professionals rely on daily. They transform the agent from a conversational interface into an active participant in professional workflows.

How the Tradeoffs Play Out#

FeatureGeneral-Purpose AssistantsDomain-Specific Agents
Knowledge BreadthBroad coverage across many domainsDeep expertise in a single domain
Workflow StructureFlexible, conversationalStructured, process-oriented
Error ToleranceVariable accuracy acceptableHigh precision required
Integration DepthGeneric API connectionsDomain-specific tool mastery
Compliance NeedsMinimalOften extensive (HIPAA, SOX, etc.)
Output ReliabilityBest effortGuaranteed structure via validation

When you are processing insurance claims, you do not need an AI that can also write poetry. You need one that never misses a required field and always follows proper adjudication procedures.

KEY INSIGHT: Domain-specific agents trade breadth for depth on purpose. The narrower the focus, the higher the reliability, and reliability is what production systems actually need.

The Augmented LLM Architecture#

The foundation is not “an LLM with a fancy prompt.” It is a system that enhances core language capabilities with domain-specific structures enforced at the data layer:

from pydantic import BaseModel, Field
from typing import List, Optional
import langgraph.graph as lg
class MedicalAssessment(BaseModel):
"""Domain-specific data model for medical consultations."""
chief_complaint: str = Field(..., description="Primary reason for visit")
symptoms: List[str] = Field(..., min_items=1)
severity: int = Field(..., ge=1, le=10)
duration: str = Field(..., pattern=r"^\d+\s*(hours?|days?|weeks?|months?)$")
red_flags: List[str] = Field(default_factory=list)
recommended_action: str
class Config:
# Domain-specific validation rules
schema_extra = {
"example": {
"chief_complaint": "Chest pain",
"symptoms": ["sharp pain", "shortness of breath"],
"severity": 7,
"duration": "2 hours",
"red_flags": ["radiating pain", "sweating"],
"recommended_action": "Immediate emergency care"
}
}

Pydantic AI enforces domain constraints at the data level. Every piece of information flowing through the system gets validated against medical best practices. Severity always lands on a standardized 1-10 scale. Duration always follows clinical documentation format. If the LLM hallucinates a severity of 15, the schema rejects it before it reaches any downstream logic.

Four-Layer Technical Architecture#

Foundation Layer: Fine-Tuning vs. RAG#

You have two approaches for encoding domain knowledge, each with distinct tradeoffs:

Fine-tuning trains a base LLM on domain-specific data, teaching it to “think” like a domain expert. A fine-tuned legal agent automatically recognizes contract clause types and their implications without explicit prompting. The downside: retraining is expensive and the knowledge becomes stale.

Retrieval Augmented Generation (RAG) keeps the base model unchanged but gives it dynamic access to domain knowledge at runtime. RAG excels when information changes frequently, like regulatory updates or new case law.

In practice, the most effective domain-specific agents combine both. Fine-tuning handles stable domain knowledge. RAG handles dynamic information.

Structure Layer: Where LangGraph and Pydantic Shine#

The structure layer transforms free-form LLM outputs into reliable, domain-compliant data. Here is an insurance claims workflow that demonstrates the pattern:

# Define a domain-specific workflow using Langgraph
def create_insurance_claim_workflow():
workflow = lg.StateGraph()
# Define nodes for each step in claims processing
workflow.add_node("validate_claim", validate_claim_data)
workflow.add_node("check_coverage", verify_insurance_coverage)
workflow.add_node("calculate_payout", determine_claim_amount)
workflow.add_node("fraud_detection", run_fraud_checks)
workflow.add_node("approval_routing", route_for_approval)
# Define the workflow logic
workflow.add_edge("validate_claim", "check_coverage")
workflow.add_edge("check_coverage", "fraud_detection")
# Conditional routing based on fraud risk
workflow.add_conditional_edges(
"fraud_detection",
lambda x: "manual_review" if x["fraud_risk"] > 0.7 else "calculate_payout",
{
"manual_review": "approval_routing",
"calculate_payout": "calculate_payout"
}
)
return workflow.compile()

Every claim follows proper procedures. Conditional logic mirrors real-world decision-making: claims with a fraud risk score above 0.7 get routed to manual review instead of automatic payout calculation. LangGraph makes these complex workflows visual and maintainable. Pydantic ensures data integrity at each node transition.

Figure 1: Four-Layer Agent Architecture — Foundation (LLMs and fine-tuning), Structure (schema validation and workflow orchestration), Integration (external system connections), and Adaptation (continuous improvement through feedback and monitoring). Each layer builds on the one below it.

Integration Layer: Plugging into Professional Systems#

Domain-specific agents connect deeply with the tools and systems professionals use daily. The integration goes far beyond simple API calls:

class MedicalRecordsIntegration:
"""Integration with Electronic Health Records (EHR) system."""
async def fetch_patient_history(self, patient_id: str) -> PatientHistory:
# Connect to EHR with proper authentication
async with self.ehr_client.authenticated_session() as session:
records = await session.get_patient_records(patient_id)
# Transform EHR data to domain model
return PatientHistory(
medications=self._parse_medications(records),
allergies=self._parse_allergies(records),
conditions=self._parse_conditions(records),
recent_visits=self._parse_visits(records)
)
def _parse_medications(self, records):
# Domain-specific parsing logic
return [
Medication(
name=med["drug_name"],
dosage=med["dosage"],
frequency=med["frequency"],
interactions=self._check_interactions(med["drug_id"])
)
for med in records.get("medications", [])
]

The integration layer handles the messy reality of professional systems: different data formats, authentication requirements, and audit trail obligations. It is what transforms an agent from a smart chatbot into a tool that actually fits into existing workflows.

Adaptation Layer: Staying Current#

The adaptation layer separates domain-specific agents from static systems. It continuously monitors performance, collects feedback, and improves:

  • Performance Monitoring tracks response accuracy, task completion rates, and user satisfaction
  • Feedback Collection gathers input from domain experts to identify gaps
  • Continuous Learning updates knowledge bases and adjusts workflows based on real-world usage
  • Compliance Updates keeps the agent current with changing regulations and best practices

KEY INSIGHT: Build the adaptation layer from day one. Domains evolve constantly, and an agent that cannot update its knowledge and workflows will drift out of compliance within months.

Architectural Patterns for Four Agent Types#

Customer Support Pattern#

Customer support agents emphasize rapid issue identification, knowledge retrieval, and appropriate escalation:

Figure 2: Four Specialized Agent Patterns — Customer Support focuses on intent classification and escalation. Research emphasizes multi-source synthesis. Content Creation includes revision loops. Decision Support provides structured analysis with risk assessment. Each pattern follows a distinct flow optimized for its domain.

The customer support pattern includes:

  • Intent classification to understand the customer’s need
  • Sentiment analysis to gauge urgency and satisfaction
  • Knowledge base retrieval for solution finding
  • Escalation mechanisms for complex issues
  • Response generation that matches company tone and policies

Research Agent Pattern#

Research agents gather, analyze, and synthesize information from multiple sources while maintaining academic or professional rigor. Key components:

  • Query decomposition to break complex questions into manageable parts
  • Multi-source retrieval with credibility assessment
  • Information synthesis that identifies patterns and contradictions
  • Citation tracking for transparency and verification
  • Report generation that follows domain-specific formats

Content Creation Pattern#

Content creation agents go beyond “good writing.” They enforce specific requirements, maintain brand consistency, and drive measurable business objectives through revision loops and quality gates.

Decision Support Pattern#

The most sophisticated pattern. Decision support agents help professionals make complex choices by providing structured analysis and recommendations. They excel where multiple factors must be weighed and outcomes are uncertain.

Pydantic Models as Domain Vocabulary#

Schema Design That Mirrors the Domain#

Your Pydantic models become the vocabulary through which your agent understands the world. Getting them right is the difference between an agent that works and one that hallucinates plausible-sounding nonsense.

Mirror Domain Entities: Schemas should reflect how domain experts actually think. A medical agent should not just have a “diagnosis” field. It needs primary vs. differential diagnoses, confidence levels, and supporting evidence, because that is how physicians reason.

Progressive Complexity: Start simple and add complexity as needed. Your first iteration validates basic fields. Over time, you add sophisticated cross-field validations that encode domain rules.

Nested Relationships: Real-world domains are full of hierarchical relationships. Pydantic’s nested models express these naturally:

from pydantic import BaseModel, Field, validator
from typing import List, Optional
from datetime import datetime
class ClinicalTrial(BaseModel):
"""Represents a clinical trial with full regulatory compliance."""
trial_id: str = Field(..., regex="^NCT\d{8}$")
phase: int = Field(..., ge=1, le=4)
status: str
class Endpoint(BaseModel):
description: str
measurement_type: str
timeframe: str
is_primary: bool
class Site(BaseModel):
institution: str
location: str
principal_investigator: str
target_enrollment: int
current_enrollment: int = 0
@validator('current_enrollment')
def enrollment_not_exceeded(cls, v, values):
if v > values.get('target_enrollment', float('inf')):
raise ValueError('Current enrollment cannot exceed target')
return v
endpoints: List[Endpoint]
sites: List[Site]
@validator('endpoints')
def must_have_primary_endpoint(cls, v):
if not any(endpoint.is_primary for endpoint in v):
raise ValueError('At least one primary endpoint is required')
return v

This model does not just store data. It enforces the complex rules governing clinical trials: every trial must have at least one primary endpoint, enrollment can never exceed targets. If the LLM generates a trial object that violates these constraints, Pydantic rejects it at the boundary before it enters any downstream system.

KEY INSIGHT: Your Pydantic schemas are not just data containers. They are executable domain knowledge. Every validator you write is a business rule the LLM cannot bypass.

Industry-Specific Model Considerations#

Different industries shape model design in distinct ways:

Healthcare demands patient privacy controls, standardized terminologies (ICD-10, SNOMED), and data provenance tracking. Models need consent tracking fields, anonymization flags, and audit trails.

Financial Services requires complex regulatory compliance, risk calculations, and audit trails. Every transaction needs associated metadata for compliance reporting, and monetary calculations must use appropriate decimal precision.

Legal domains need jurisdictional variation support, precedent relationships, and confidentiality levels. A contract model for use in the US needs different fields than one for the EU.

E-commerce requires complex product hierarchies, dynamic pricing rules, and inventory constraints. Real-time data synchronization becomes critical when dealing with limited stock items.

LangGraph Workflow Design in Practice#

Domain-Specific Graph Structures#

LangGraph represents the complex, branching workflows that characterize professional domains. Unlike simple linear pipelines, these graphs handle the nuanced decision-making experts perform daily:

Figure 3: Legal Document Review Workflow — Multiple decision points with conditional routing, verification loops, escalation paths for high-risk issues, and human-in-the-loop integration for cases requiring expert judgment. The graph structure mirrors the actual decision process a legal professional follows.

Decision Points That Encode Professional Judgment#

The power of domain-specific workflows lies in sophisticated routing logic. Decision points encode professional judgment, not just boolean conditions:

Confidence Thresholds route processing based on the agent’s certainty. A medical diagnosis agent automatically proceeds with high-confidence cases but routes uncertain ones for human review.

Risk-Based Routing adapts the workflow based on potential impact. A financial trading agent uses simplified approval for small trades but requires multiple checks for large positions.

Expertise Escalation recognizes when human expertise is needed. Well-designed agents know their limits and seamlessly hand off to human experts when appropriate.

External System Integration Within Workflows#

Real-world workflows connect to professional tool ecosystems at multiple points:

  • Stateful Connections maintain context across multiple API calls
  • Transaction Management ensures operations complete atomically
  • Error Recovery handles external system failures gracefully
  • Audit Logging creates comprehensive trails for compliance and debugging

Industry Case Studies#

Financial Services: Investment Advisory Agent#

We built an investment advisory agent that combines real-time market data feeds, portfolio management systems, and compliance databases. It does not just suggest stocks. It understands risk tolerance, tax implications, and regulatory suitability requirements. Pydantic models enforce suitability rules so every recommendation aligns with the client’s profile and regulatory constraints.

Using LangGraph, the agent follows the standard financial planning process: discovery, analysis, recommendation, implementation, monitoring. Each step has built-in compliance checks and documentation requirements, creating an audit trail that satisfies regulatory scrutiny.

Healthcare: Clinical Decision Support Agent#

Healthcare presents the highest stakes for AI agents. Regulations are strict, and professional judgment is paramount. We designed clinical decision support agents to augment healthcare providers, never replace them:

Figure 4: Industry Integration Patterns — Each industry has unique integration requirements. Financial Services connects to market data and compliance systems. Healthcare integrates with EHRs and clinical databases. E-commerce links to inventory and customer systems. Legal connects to precedent databases and case management tools.

These agents excel at pattern recognition across patient populations, flagging potential drug interactions, and suggesting evidence-based treatment options. The critical design choice: they present information to support clinical decision-making without overstepping their bounds.

E-commerce: Product Recommendation Agent#

Modern recommendation agents have evolved far beyond “customers also bought” suggestions. They understand inventory levels, profit margins, seasonal trends, and customer lifetime value. The agent orchestrates workflows that analyze browsing behavior, check inventory availability, calculate shipping costs, and personalize presentations based on customer segments. It might promote high-margin items to price-insensitive customers while highlighting value options to bargain hunters.

Contract analysis showcases the power of combining domain knowledge with structured workflows. These agents do not just keyword-search contracts. They understand legal concepts, identify risk factors, and flag unusual provisions. The agent follows methodical review processes: extracting key terms, classifying clauses, identifying obligations and rights, checking for conflicts, and generating summaries. Integration with legal research databases allows the agent to cite relevant precedents and flag clauses that have been problematic in past litigation.

The Real Benefits and Honest Challenges#

What Domain-Specific Agents Deliver#

Expertise Encapsulation makes specialized knowledge accessible to more users. A junior analyst with a well-designed financial agent performs analysis that previously required years of experience.

Consistency at Scale ensures best practices get followed every time. Unlike humans who might cut corners when tired or rushed, agents maintain the same standards for every interaction.

Reduced Errors through validation and structured workflows. By enforcing domain constraints at every step, agents catch mistakes before they propagate.

Accelerated Operations by automating routine tasks while maintaining quality. Professionals focus on high-value activities while agents handle the repetitive work.

What Makes Them Hard to Build#

Development Complexity requires both AI expertise and deep domain knowledge. You cannot build a medical agent without understanding medicine, and you cannot encode that understanding without AI skills. We learned this the hard way when our first financial agent passed every technical test but generated recommendations that no licensed advisor would ever give. The schema was valid. The domain logic was wrong. We had to bring in an actual financial advisor to audit every validator and workflow branch.

Maintenance Overhead compounds as domains evolve. Regulations change, best practices update, and new edge cases emerge. Your agent needs continuous updates to remain relevant.

Balancing Specificity and Flexibility is a constant tension. Too specific, and your agent breaks on slight variations. Too flexible, and it loses the precision that makes it valuable.

KEY INSIGHT: Hire the domain expert before you hire the ML engineer. The most common failure mode for domain-specific agents is technically sound code that encodes the wrong business logic.

Where This Is Heading#

Multi-Agent Collaboration lets specialized agents work together on cross-domain problems. A patient care system where medical, insurance, and scheduling agents collaborate seamlessly, each owning its domain while coordinating through shared state.

Adaptive Specialization allows agents to progressively specialize based on usage patterns. An agent starts as a general customer service bot but gradually develops deep expertise in specific product lines based on the queries it handles most.

Federated Domain Knowledge enables organizations to share domain expertise while maintaining competitive advantages. Standards for encoding and sharing domain models are beginning to emerge.

Practical Takeaways#

  1. Start with the domain, not the technology. Understand the workflows, constraints, and requirements of your field before choosing technical approaches.
  2. Invest in robust Pydantic schemas. They are the foundation of domain understanding. Make them comprehensive and accurate.
  3. Design workflows that mirror professional practice. Use LangGraph to encode the actual decision processes experts follow.
  4. Plan for continuous evolution. Domains change. Your agents need mechanisms for staying current.
  5. Remember that agents augment, not replace. The most successful domain-specific agents enhance human expertise rather than trying to substitute for it.

The future belongs to agents that combine broad language understanding with deep domain expertise. Not smarter chatbots, but professionally competent AI systems that fit into the workflows practitioners already trust.

References#

[1] Langchain, “LangGraph: A library for building stateful, multi-actor applications with LLMs,” GitHub Repository, 2024. https://github.com/langchain-ai/langgraph

[2] Pydantic, “Data validation and settings management using Python type annotations,” Official Documentation, 2024. https://docs.pydantic.dev/

[3] H. Chase, “Agent Patterns: Tool Use and Orchestration,” LangChain Blog, 2024. https://blog.langchain.dev/agent-patterns-tool-use-and-orchestration/

[4] LlamaIndex, “Building Domain-Specific Applications with LLMs,” Documentation, 2024. https://docs.llamaindex.ai/en/stable/examples/agent/

[5] S. Raschka, “Understanding LLM Agents - Workflows, Tools and Applications,” Personal Blog, 2023. https://sebastianraschka.com/blog/2023/llm-agents.html

[6] Pinecone, “Building LLM Applications for Production,” Learning Center, 2024. https://www.pinecone.io/learn/series/langchain/

[7] J. Liu, “Building Domain-Specific Agents with Retrieval Augmentation,” Towards Data Science, 2024. https://towardsdatascience.com/building-domain-specific-agents-with-retrieval-augmentation-95e29d6ade2a

[8] A. Karpathy, “Build Systems, Not Just Models,” Personal Blog, 2022. https://karpathy.github.io/2022/03/14/lecun1989/

[9] LangChain, “Building End-to-End Agents with the LangChain Expression Language,” Python Documentation, 2024. https://python.langchain.com/docs/expression_language/

[10] AI2, “Domain-Specific Agents: A Technical Overview,” Allen Institute Blog, 2024. https://blog.allenai.org/building-ai-assistants-that-empower-domain-experts/

[11] OpenAI, “Function Calling: Structuring LLM Outputs,” API Documentation, 2024. https://platform.openai.com/docs/guides/function-calling

[12] A. Ng, “Building Domain-Specific Applications with LLMs,” DeepLearning.AI, 2024. https://www.deeplearning.ai/the-batch/

[13] A. Fan et al., “Optimizing LLMs for Long-Form Generation,” arXiv preprint arXiv:2307.03170, 2023.

[14] Anthropic, “Best Practices for Domain-Specific Applications,” Developer Blog, 2024. https://www.anthropic.com/blog/

[15] H2O.ai, “Fine-Tuning Strategies for Domain Adaptation,” Technical Blog, 2024. https://h2o.ai/blog/

[16] NVIDIA, “Building NLP Pipelines for Healthcare Applications,” Developer Blog, 2024. https://developer.nvidia.com/blog/

[17] Microsoft Research, “Domain-Specific Prompt Engineering,” Research Blog, 2024. https://www.microsoft.com/en-us/research/blog/

[18] IBM Research, “Multi-Agent Systems for Enterprise Applications,” Research Blog, 2024. https://research.ibm.com/blog/

[19] Meta AI, “Building Robust AI Systems for Real-World Deployment,” Engineering Blog, 2024. https://ai.meta.com/blog/

[20] Databricks, “MLOps for Domain-Specific AI Applications,” Technical Blog, 2024. https://www.databricks.com/blog/

Building Domain-Specific AI Agents with LangGraph and Pydantic AI
https://dotzlaw.com/insights/building-domain-specific-ai-agents-with-langgraph-and-pydantic-ai/
Author
Gary Dotzlaw
Published at
2025-06-16
License
CC BY-NC-SA 4.0
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