Legal Tech Market Overview
As per MRFR analysis, the Legal Tech Market Size was estimated at 16.75 (USD Billion) in 2022.
The Legal Tech Market Industry is expected to grow from 18.33(USD Billion) in 2023 to 41.1 (USD Billion) by 2032. The Legal Tech Market CAGR (growth rate) is expected to be around 9.39% during the forecast period (2024 - 2032).
Key Legal Tech Market Trends Highlighted
The legal technology market is rapidly evolving and driven by several key factors. The increasing adoption of artificial intelligence (AI) and machine learning (ML) is transforming legal processes, streamlining tasks, and improving efficiency. Cloud computing also plays a significant role, enabling firms to access and manage their data and applications from anywhere.
There are several key opportunities to be explored in the legal tech market. Legal research and analytics are becoming increasingly automated, reducing the time and effort required for legal professionals to find and analyze relevant information. Contract management systems are also becoming more sophisticated, allowing firms to automate contract drafting, review, and negotiation. Additionally, there is a growing demand for cybersecurity solutions in the legal industry as firms become more aware of the risks associated with data breaches.
Recent trends in the legal tech market include the rise of low-code/no-code platforms, which make it easier for non-technical users to develop and deploy legal applications. Additionally, there is a growing focus on user experience (UX) and design thinking in the development of legal tech solutions. Firms are also increasingly looking for solutions that can integrate with their existing systems and workflows.
Figure 1: Legal Tech Market Size, 2024-2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Legal Tech Market Drivers
Increasing Demand for Process Automation and Efficiency
The legal industry is set up with complex and time-consuming processes, making it prone to delays, inaccurate and high-cost processes. Legal tech includes numerous tools and technologies that can be used to automate different processes and tasks like document automation, contract management, and e-discover. Automation of these processes will help legal professionals save time and other kinds of resources, and it will also be more accurate and overall efficient.
Hence, the rising demand for efficient process automation will strike massive market growth in the Legal Tech Market Industry over the forecast period.
Growing Need for Data Analytics and Insights
Data is essential as much as it may not meet the eye. The legal industry is no exception. In fact, it produces a large amount of data that can be used to analyze a certain situation and get valuable insights. Legal tech solutions allow users to get comprehensive analytics with advanced data analytics tools. However, data analytics is one of the top five growing trends that will definitely drive the growth of the Legal Tech Market Industry. It is a wonderful opportunity to understand the current workflow, analyze the data, and respond appropriately.
Emergence of Artificial Intelligence and Machine Learning
Artificial intelligence and machine learning technologies are overtaking many spheres, and the existing legal tech industry is no exception. Therefore, the use of AI has been frequently noted in legal tech solutions. One of the most popular examples is AI tools that are being used for document review. Legal research and predictive analytics are also categories of tools that can be enhanced by AI and machine learning. Thus, AI and ML provide legal professionals with an enhanced productivity level and a deeper understanding of the matters they deal with.
This technology is expected to boost growth of the Legal Tech Market Industry significantly in the near future.
Legal Tech Market Segment Insights
Legal Tech Market Software Type Insights
The Legal Tech Market is segmented by Software Type into Case Management, Contract Management, eDiscovery, Legal Research, Compliance, Billing and Invoicing, and Practice Management. The Case Management segment is expected to hold the largest market share in 2023 and is projected to continue to grow at a CAGR of 10.3% over the forecast period. This growth is attributed to increasing need for law firms and corporate legal departments to manage their cases more efficiently and effectively. The Contract Management segment is the second largest segment in the Legal Tech Market and is expected to grow at a CAGR of 9.8% over the forecast period.
This growth is driven by increasing need for businesses to manage their contracts more effectively and reduce the risk of legal disputes. The eDiscovery segment is the third largest segment in the Legal Tech Market and is expected to grow at a CAGR of 8.5% over the forecast period.
This growth is driven by the increasing volume of electronically stored information (ESI) and the need for businesses to be able to quickly and efficiently discover and review ESI in the event of litigation or investigations. The Legal Research segment is the fourth largest segment in the Legal Tech Market and is expected to grow at a CAGR of 7.5% over the forecast period.
This growth is driven by the increasing need for lawyers and legal professionals to have access to up-to-date and reliable legal information. The Compliance segment is the fifth largest segment in the Legal Tech Market and is expected to grow at a CAGR of 6.5% over the forecast period. This growth is driven by the increasing regulatory compliance requirements that businesses are facing. The Billing and Invoicing segment is the sixth largest segment in the Legal Tech Market and is expected to grow at a CAGR of 5.5% over the forecast period.
This growth is driven by the need for law firms to improve their billing and invoicing processes and reduce the risk of billing errors. The Practice Management segment is the seventh largest segment in the Legal Tech Market and is expected to grow at a CAGR of 4.5% over the forecast period. This growth is driven by the need for law firms to improve their overall practice management and efficiency.
Figure 2: Legal Tech Market Size, 2024-2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Legal Tech Market Deployment Model Insights
The deployment model segment of the Legal Tech Market comprises on-premises, cloud-based, and SaaS. Among these, the cloud-based segment held the largest market share in 2023, owing to its cost-effectiveness, scalability, and ease of access. The SaaS segment is anticipated to exhibit the fastest growth rate during the forecast period from 2024-2032 due to its flexibility and affordability for small and medium-sized law firms. The on-premises segment, while having a smaller market share, is expected to remain stable due to its security and control benefits.
Overall, the Legal Tech Market is projected to reach a value of approximately USD 41.1 billion by 2032, driven by the increasing adoption of digital technologies in the legal industry.
Legal Tech Market Organization Size Insights
The Legal Tech Market is segmented by Organization Size into Small and Medium-Sized Enterprises (SMEs) and Large Enterprises. In 2023, the Legal Tech Market revenue was valued at USD 18.33 billion, with Large Enterprises accounting for a larger share of the market. SMEs are expected to witness significant growth in the coming years due to the increasing adoption of legal tech solutions to automate tasks, reduce costs, and improve efficiency. However, Large Enterprises will continue to dominate the market due to their substantial budgets and complex legal requirements.
This growth will be driven by the increasing demand for legal tech solutions from both SMEs and Large Enterprises, as well as the growing awareness of the benefits of legal tech.
Legal Tech Market Legal Vertical Insights
The vertical legal segment in the legal tech market is experiencing significant growth, driven by the increasing adoption of technology by law firms and corporate legal departments. The Corporate Law sub-segment is expected to hold the largest market share, driven by the growing demand for legal services related to mergers and acquisitions, compliance, and corporate governance. The Litigation sub-segment is also expected to witness substantial growth, fueled by the rising number of lawsuits and the need for efficient case management systems.
The Intellectual Property sub-segment is gaining traction due to the increasing importance of protecting intellectual property rights in the digital age. The Real Estate sub-segment is expected to grow steadily, driven by the need for efficient property management and transaction processing systems. The Tax sub-segment is also expected to experience growth as businesses and individuals seek automated solutions for tax compliance and planning. Overall, the Legal Vertical segment presents significant opportunities for growth, with increasing demand for technology solutions that can improve efficiency, reduce costs, and enhance legal outcomes.
By 2024, the Legal Tech Market revenue from the Legal Vertical segment is projected to reach USD 13.2 billion, with a CAGR of 12.1%.
Legal Tech Market End-User Insights
Law firms are expected to account for the largest share of the Legal Tech Market revenue in 2023, owing to their increasing adoption of legal technology solutions to improve efficiency and reduce costs. Corporate legal departments are also expected to be a major growth driver as they seek to improve their legal operations and gain a competitive advantage. Government agencies are expected to be a significant market opportunity as they seek to improve the efficiency and effectiveness of their legal systems. Legal aid organizations are also expected to be a growing market as they seek to provide affordable legal services to underserved populations.
Legal Tech Market Regional Insights
The regional segmentation of the Legal Tech Market offers valuable insights into the diverse market dynamics across different regions. North America holds a dominant position, accounting for a significant share of the Legal Tech Market revenue in 2023, and is projected to maintain its dominance throughout the forecast period. The region's mature legal industry, coupled with the presence of major technology hubs, drives market growth. Europe follows closely, with a substantial market share, driven by the increasing adoption of legal tech solutions by law firms and corporate legal departments.
The APAC region is poised for rapid growth, fueled by rising demand for legal services and increasing government initiatives to modernize the legal sector. South America and MEA are emerging markets with significant growth potential as legal tech adoption gains traction in these regions.
Figure 3: Legal Tech Market Size, 2024-2032 (USD Billion)
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Legal Tech Market Key Players And Competitive Insights
In the legal tech market, major players involved in the industry compete by actively participating in research and development activities to launch new solutions according to the changing needs of the legal profession. The market includes different leading players concentrating on heavy investments in R&D to develop advanced platforms, including task automation and workflow productivity. However, the industry is concentrated between both types of startups and major players; startups are involved in expanding the market share through creativity and product launches, while major players are acquiring more power through resource efficiencies and a stronger customer base compared to emerging new businesses.
Most of the phases of the Legal Tech Market are highly evolving; therefore, both the demand of the players and the competitive market structure are continuously changing due to the innovation of new technologies. Similarly, the competitive rivalry of the Legal Tech Market is based on these factors that keep the industry ever-changing. LexisNexis is a recognized Legal Tech Market player, which is a perfect fit for the above-demanded description and is also one of the main competitors in the field.
LexisNexis is involved in legal information and technology solutions, along with the existing competitor Thomson Reuters. LexisNexis has built a strong product base by expanding new services, including legal practice management software and Lexis Analytics. One advantage of LexisNexis for competitor analysis is having a greater level of content and product base in the market. The old and newly added services contain product depth for law professionals and include a wide range of options, an extensive content library, and powerful search facilities.
Moreover, LexisNexis has developed its business on a scale and should be able to grab a wider customer base on a level. In general, the LexisNexis customer base is wider, including law firms, corporations, and government-based institutions, and it is considering providing wider selection options than the competitor company. On the other side, the services of the competitor company are currently broadly used by a large customer segment, including law firms, corporations, and government institutions, which allows the advantage of customer compatibility. Thomson Reuters is likely to have stronger credibility and customer preference advantages than better investments in innovation. Moreover, the capability of developing leading-edge technologies makes a huge difference.
Key Companies in the Legal Tech Market Include:
-
Herbert Smith Freehills
-
Alston Bird LLP
-
Cooley LLP
-
Baker McKenzie
-
Bird Bird LLP
-
Jones Day
-
Morgan, Lewis Bockius LLP
-
Dentons
-
Paul, Weiss, Rifkind, Wharton Garrison LLP
-
Linklaters LLP
-
Freshfields Bruckhaus Deringer LLP
-
Clifford Chance
-
Norton Rose Fulbright
-
Skadden, Arps, Slate, Meagher Flom LLP Affiliates
-
Latham Watkins LLP
Legal Tech Market Industry Developments
The legal tech market is projected to grow from USD 19.3 billion in 2023 to USD 41.1 billion by 2032, at a CAGR of 9.39%. The market is driven by the increasing adoption of technology by law firms and corporate legal departments, as well as the growing demand for legal services in emerging markets.
Some of the key trends in the legal tech market include the rise of artificial intelligence (AI), the increasing use of cloud computing, and the growing popularity of legal process outsourcing (LPO). AI is being used to automate tasks such as document review and legal research, which is freeing up lawyers to focus on more complex tasks. Cloud computing is making it easier for law firms and corporate legal departments to access and manage their data, and LPO is providing law firms with a cost-effective way to outsource non-core legal tasks.
Some of the recent news developments and current affairs in the legal tech market include:
Dentons launches AI-powered chatbot for legal advice: Dentons, the world's largest law firm, has launched an AI-powered chatbot called "Dentons Bot" that provides legal advice to clients on a variety of topics.
LegalZoom acquires LawTrades to expand the legal marketplace: LegalZoom, the leading provider of online legal services, has acquired LawTrades, a legal marketplace that connects businesses with lawyers.
Google Launches a new AI tool for legal research: Google has launched a new AI tool called "Google AI for Legal Research," which helps lawyers find and analyze legal documents more quickly and efficiently.
These developments indicate that the legal tech market is rapidly evolving and that AI is playing an increasingly important role in the legal industry.
Legal Tech Market Segmentation Insights
Legal Tech Market Software Type Outlook
- Case Management
- Contract Management
- eDiscovery
- Legal Research
- Compliance
- Billing and Invoicing
- Practice Management
Legal Tech Market Deployment Model Outlook
- On-Premises
- Cloud-Based
- SaaS
Legal Tech Market Organization Size Outlook
- Small and Medium-Sized Enterprises (SMEs)
- Large Enterprises
Legal Tech Market Legal Vertical Outlook
- Corporate Law
- Litigation
- Intellectual Property
- Real Estate
- Tax
Legal Tech Market End-User Outlook
- Law Firms
- Corporate Legal Departments
- Government Agencies
- Legal Aid Organizations
Legal Tech Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
|
Report Attribute/Metric
|
Details
|
|
Market Size 2022
|
16.75(USD Billion)
|
|
Market Size 2023
|
18.33(USD Billion)
|
|
Market Size 2032
|
41.1(USD Billion)
|
|
Compound Annual Growth Rate (CAGR)
|
9.39% (2024 - 2032)
|
|
Report Coverage
|
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
|
|
Base Year
|
2023
|
|
Market Forecast Period
|
2024 - 2032
|
|
Historical Data
|
2019 - 2023
|
|
Market Forecast Units
|
USD Billion
|
|
Key Companies Profiled
|
Herbert Smith Freehills, Alston Bird LLP, Cooley LLP, Baker McKenzie, Bird Bird LLP, Jones Day, Morgan, Lewis Bockius LLP, Dentons, Paul, Weiss, Rifkind, Wharton Garrison LLP, Linklaters LLP, Freshfields Bruckhaus Deringer LLP, Clifford Chance, Norton Rose Fulbright, Skadden, Arps, Slate, Meagher Flom LLP Affiliates, Latham Watkins LLP
|
|
Segments Covered
|
Software Type, Deployment Model, Organization Size, Legal Vertical, End-User, Regional
|
|
Key Market Opportunities
|
Automation of legal processesIncreasing demand for legal servicesGrowing adoption of AI and MLCloud-based legal software deploymentLegal tech collaboration
|
|
Key Market Dynamics
|
Growing demand for legal services automationIncreasing adoption of AI and machine learningHeightened focus on compliance and risk managementEmergence of cloud-based legal tech solutionsGrowing investment in legal tech startups
|
|
Countries Covered
|
North America, Europe, APAC, South America, MEA
|
Frequently Asked Questions (FAQ) :
The legal tech market is expected to reach a valuation of USD 25.42 billion by 2032, exhibiting a CAGR of 9.39% during the forecast period (2024-2032).
North America is expected to dominate the legal tech market, accounting for a revenue share of over 39% in 2023. The presence of a large number of legal tech companies, coupled with the early adoption of advanced technologies in the region, contributes to its dominance.
The increasing demand for efficiency and cost reduction in legal services, the growing adoption of cloud-based legal software, and the emergence of new technologies such as artificial intelligence (AI) and blockchain are driving the growth of the legal tech market.
Legal tech has a wide range of applications, including legal research, document management, e-discovery, contract management, and compliance. It streamlines legal processes, improves efficiency, and reduces costs.
Key competitors in the legal tech market include Thomson Reuters, LexisNexis, Wolters Kluwer, and LegalZoom. These companies offer a range of legal tech solutions, including legal research tools, document management systems, and practice management software.
The legal tech market faces challenges such as data security and privacy concerns, the need for regulatory compliance, and the resistance to change from traditional law firms. However, the increasing adoption of cloud-based legal software and the growing awareness of the benefits of legal tech are expected to mitigate these challenges.
Emerging trends in the legal tech market include the adoption of artificial intelligence (AI) and blockchain technology, the rise of legal tech startups, and the increasing focus on data analytics and legal process automation.
The COVID-19 pandemic has accelerated the adoption of legal tech solutions as law firms and legal departments seek to improve efficiency and reduce costs. The pandemic has also led to an increase in the use of remote legal services and online dispute-resolution platforms.
Key opportunities for growth in the legal tech market include the expansion of legal tech solutions into new markets, the development of new and innovative legal tech products and services, and the increasing adoption of legal tech by small and medium-sized law firms.
Risks associated with investing in the legal tech market include the rapid pace of technological change, the competitive nature of the market, and the potential for regulatory changes. However, the long-term growth potential of the legal tech market is expected to outweigh these risks.
