The global LegalTech market was valued at USD 22.1 Billion in 2022 and is projected to reach USD 50.5 Billion by 2030, registering a CAGR of 9.08% for the forecast period 2023-2030.
Market Definition
The rising demand for the legal services to drive the legal tech market. LegalTech or legal technology can be termed as the use of technology and software to offer legal services and support by making it more efficient and accessible with comprising of varied tools and platforms such as practice management, legal research databases, document automation, AI-driven solutions and online legal marketplaces for the legal industry. Increase the efficiency, reduces the costs, improvement in the accuracy, increased access to legal services are few of the benefits gained with use of LegalTech. With the rapid growth and fast evolving technologies following the key trends such as growth in the e-discovery, rise with usage of AI, increasing adoption of cloud computing concepts, the emergence of legal service delivery models, are boosting the LegalTech industry. This advancement in the technology is transforming the legal industry by streamlining processes, improving services, and adoption in digital age with large amount of opportunities to grow and challenges to face. Regulatory & compliance demands with data analytics & insights, to further fuel the markets growth.
Market Size:
- 2022: USD 22.1 billion
- 2030: USD 50.5 billion
- CAGR (2023-2030): 9.08%
LegalTech Market Dynamics
Drivers: The rising complexity with the legal processes to drive the LegalTech market
The primary factor driving the LegalTech market is the complexity in its processes with continuous evolvement in regulation, compliances, globalization, and the proliferation of the digital information created need for the legal technology solutions. These solutions offer streamlining operations, automation with the concurrent tasks, optimization of workflow further with the usage of these not only time is saved but it also helps with reduction in operational costs which is beneficial for both client as well as for law firms. In modern era with the increasing high expectation of the clients such as transparency, cost predictability, real-time updates, user-friendly interaction these solutions with adoption of advanced technologies such as AI, ML, data and analytics to further drive the markets growth. For instance, Thomson Reuter acquired CaseText, Inc. a company that offers technology solutions based on the AI, ML, for the legal professionals which will help these professionals with better document reading and management of data with better insights which will in return reduce the complex process of documentation for the legal firms and departments.
Recent Developments
In January 2023, Clio legal technology company and developer of worlds legal operating system announced its expansion plan to Australia to support, expand product development, sales, partnership, and customer success.
In August 2023, Thomson Reuters announced its completion of acquisition of CaseText, Inc. a company that uses AI and ML to built technology for legal professionals. This acquisition will support Thomson Reuters build, partner and buy strategy for offering generative AI solutions for its customers.
Restraint
The LegalTech industries primary restraining factor is the concern with the data and its security as the data is quite confidential and consists of sensitive information of clients. Any leak or perceived vulnerabilities can directly affect the adoption of these LegalTech solutions. Ethical concern plays an important role with slow growth rate for the market with the handling of sensitive information further the rising usage of advanced technologies such as AI, ML, data and analytics raised questions for biasness in the algorithms and the decisions made on it which complicates the adoption of these advanced technologies in the LegalTech industry. The high initial costs with the implementations of LegalTech solutions to further restrain the market.
Challenges
The legal tech industry faced a lot of challenges with the regulatory and compliance hurdles which are must for any company. These regulations may vary from one jurisdiction to another which can pose challenges for the developers and the users. Further lack of standardization in legal tech tools makes it difficult for software solutions to integrate smoothly and may create issues with the workflow management and sharing data. The growing usage of advance technology such as the AI and automation in the practice of law raised numerous queries for algorithmic biasness, the decision making based on it, and use of AI in critical matters requires ethical considerations. Further with the implementations getting difficult for the legal professionals as the find it hard to adapt and learn these skills.
Opportunities
The LegalTech offers immense opportunities to grow innovate and improve its service delivery and making it interesting for professionals and tech providers. Legal Tech offers chance for optimization of operations for law firms and legal departments, automation for the repetitive tasks and streamlining workflow management. Further access to justice online platforms and marketplaces are becoming the sources for connection with individuals and small businesses with affordable services. The advancement in the technology plays a vital role in reshaping the LegalTech industry with the growing demand that provides facilities for cross-border transactions, international contract management, and compliance. With the rising adoption of the advanced technology such as data analytics which offers valuable information, predicts legal outcomes and enhances the outcomes or the decision making.
Snapshot:
| Attributes | Details |
| Market Size in 2022 | USD 22.1 Billion |
| Market Forecast in 2030 | USD 50.5 Billion |
| Compound Annual Growth Rate (CAGR) | 9.08 % |
| Unit | Revenue (USD Million) and Volume (Kilo Tons) |
| Segmentation | By Solutions, By Type, By End-Use & By Region |
| By Solutions |
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| By Type |
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| By End-Use |
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| By Region |
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| Base Year | 2022 |
| Historical Year | 2018 - 2022 |
| Forecast Year | 2023 - 2030 |
Segment Analysis of the LegalTech Market
The LegalTech market is segmented by solutions, type, end-user, and region.
By Solutions
The software segment has gained the largest market share in 2022:
Based on the solutions segment the market for LegalTech is classified into software and services. These software and services are further sub-categorized into cloud-based, on-premises, and consulting services, support services and others respectively. The services segment is expected to grow at an highest CAGR during the forecasted period. With the rising demand for the consultation with implementation of technologies for management of the workflows and various operations. Growing demand for the training services to offer new opportunities for individuals’ growth to contribute to segments growth.
On the other hand, software segment holds the major share in 2022 with increase in adoption of varied software into legal departments and law firms. Further the increase in new technology such as AI, ML, data and analytics to contribute to segments growth.
By End-User
The LegalTech market based on the segment end-users is classified into law firms, corporate legal departments and others. The law firms dominated the market with growing adoption of new technology such as AI for collaboration and efficiently communicating with clients, accessing documents anywhere. These advanced solutions offer documentation review, electronic billing, time-tracking and management of invoices which saves time.
Regional Analysis
North America dominated the market in 2022:
North America accounted for largest market share in the LegalTech market in 2022. With the significant presence of the key players offering varied solutions such as artificial intelligence, cloud computing, big data, and many other to contribute to the region’s domination. With increasing adoption of advanced technologies and easy availability of immense data. With the usage of blockchain technology transparency, assured legal transactions with more security for the clients and law makers to further adding up to the region’s contribution. The legal technology market in the Asia-Pacific region is expected to have a steady growth in the coming years. With the increase in adoption of new technology such as AI, ML for performing legal research, document management, contract analysis and review to give new opportunities for the tech solution providers in the region in coming years.
For instance, in January 2023, Themis Solution Inc expanded its operations in Australia for new product development, and to expand its sales and support in the region.
List of the prominent players in the LegalTech Market:
- Icertis, Inc.
- Filevine Inc.
- DocuSign Inc.
- Casetext Inc.
- ProfitSolv, LLC
- Knovos, LLC
- Mystacks Inc.
- Practice Insight Pty Ltd (WiseTime)
- TimeSolv Corporation
- Themis Solutions Inc. (Clio)
- Everlaw Inc.
- LexisNexis Legal
- Professional Company
Segmentation Analysis of the LegalTech Market
By Solutions
- Software
- Cloud-Based
- On-Premises
- Services
- Consulting Services
- Support Services
- Others
- E-Discovery
- Legal Research
- Practice Management
- Analytics
- Compliance
- Document Management
- Contract Lifecycle Management
- Time-Tracking & Billing
- Others
- Law Firms
- Corporate Legal Departments
- Others
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa
Impact of the COVID-19 Pandemic on the LegalTech Market:
COVID-19 significantly impacted the LegalTech market in both positive as well as negative way. Many law firms and legal professionals transitioned rapidly to remote work environments for ensuring social distancing, the laws imposed by many governments of varied countries. For the remote environment virtual collaborating tools, document security management and video conferencing became essential for productivity and for communication with clients which gave new opportunities for the technology providers for offering these tools and services.
On the other hand, with the rise in remote operations the data security concern gave a negative impact. With the sensitive data of the client their arises the condition for data privacy and security from the various cyber-attacks. The growing usage of AI and data analytics roused the question of biasness on the algorithm and the decisions made based on them.
