Is Legal Tech a Growing Industry?
The investment in the legal technology market has profoundly impacted the legal industry over the last few years. The use of tech in law firms has increased from advances in AI-powered solutions to the proliferation of practice-specific tools like contract lifecycle management tools or practice management software to operational tools like CRMs and billing software.
The market size of legal tech is ballooning, underscoring the demand for innovative legal software and its growth potential. This growth signifies a pivotal shift towards the future of legal technology, reshaping client engagement, business operations, and delivery of legal services. Working smarter, not harder, means embracing technological advancements.
What is the legal tech industry?
Technology has profoundly impacted how legal professionals operate, transforming workflows and processes across the board. This rapidly expanding market includes the following:
- Practice management software: Solutions for centralizing client data, calendars, tracking deadlines, documents, tasks, and details for legal matters in one platform.
- Document automation: Tools that generate customized legal documents like contracts, briefs, and forms from templates.
- eDiscovery platforms: Systems for efficiently searching, analyzing, and producing electronic information relevant to legal cases and discovery requests.
- Legal research databases: Comprehensive case law repositories, statutes, verdicts, filings, and other legal data to inform legal strategy.
- Contract lifecycle management: End-to-end platforms for streamlining contract drafting, editing, signing, validating, and monitoring processes.
- Legal billing software: Tools for time tracking, invoice generation, trust accounting, and getting paid faster.
- eSignature applications: Tools for secure, legally binding digital signing of official legal documents.
- Client intake software: Solutions to simplify client onboarding, communication, and client relationship management.
Additional legal technology
- IP management software: Tools to manage intellectual property like trademarks and patents
- Legal holds software: To automate the preservation of information for litigation
- Trial presentation software: For exhibits and documents in trials
- Litigation support software: For document and transcript management
How big is the legal tech industry?
The legal tech industry is a powerhouse, valued at around $23.45 billion globally in 2022. Fundamental shifts in delivering services fueled this growth. AI-driven tools, cloud platforms, and applications have transformed the landscape for legal professionals.
And this market influence reaches beyond attorneys and law firms. It's democratizing access to justice through online dispute resolution, DIY tools, and legal advice apps.
It's also transforming the justice system through streamlining court processes and making legal information more accessible for the public.
How big is the legal tech market in the US?
As tech continues transforming legal practice and public access, the US legal tech market appears poised for continued dynamic growth while currently representing around 7% of the total legal services market
Lawyers are increasingly adopting new tools to manage the rising complexity of legal matters and client demands. Legal tech solutions like practice management software, eDiscovery platforms, and document automation provide greater efficiency and productivity. The automation of repetitive tasks enables lawyers, and legal professionals, to focus on higher-value work.
Is legal tech a growing industry?
Yes, legal tech isn't just growing—it's booming. The US exhibits remarkable growth trends and increasing tech adoption and innovation as legal professionals shift to AI-driven tools, cloud platforms, and legal software solutions. Here are 3 key trends that illustrate this legal tech surge in the US:
- The demand for tools that can automate repetitive tasks and workflows is high. Lawyers are seeking efficiency through legal technology.
- Integrating AI tools like natural language processing, predictive analytics, and machine learning into legal practices is accelerating. AI adoption is transforming how legal professionals approach research, analysis, and strategy.
- The usage of Legal Operations (Legal Ops) to centralize and optimize legal delivery is growing. Ops teams are leveraging technology and processes for enhanced coordination and oversight.
What are the benefits of technology in the legal field?
Legal technology offers transformative benefits that improve efficiency, insight, and access to legal services. Document automation, CRMs, and invoicing tools streamline firm processes. Client portals and mobile apps expand client communication and transparency. Remote collaboration technology facilitates flexible working and seamless client connections.
Overall, the right solutions enable law firms to deliver better service quality and productivity, with 70% of clients preferring technologically-enabled offerings like online payments.
How much do law firms spend on tech?
According to the same ABA TechReport 2022, which analyzes findings from the ABA Legal Technology Survey, law firms are investing more in technology, but investment percentages vary.
| Law Firm Size | Average Annual Hardware Spend | Overall Tech Budget Trend |
|---|---|---|
| Small Firms (2-9 lawyers) | $1,000 - $4,900 | 56% increased budget in 2022 |
| Mid-Sized Firms (10-49 lawyers) | 17% spend $10,000 - $20,000 13% spend $20,000+ |
65% decreased budget in 2022. However, budgets are still rising overall |
| All Firms | $11,514 average in 2022, up from $10,433 in 2021 | Tech budgets have increased over the last few years |
The ABA report found that law firms have been steadily increasing their overall technology budgets in recent years, with this trend likely to continue as hardware costs rise and new legal tech emerges. However, the level of tech investment correlates to firm size, as small and mid-sized firms have different budgetary needs and capabilities when spending on technology.
Bringing your legal tech strategy into the future
The legal technology market continues to evolve rapidly, bringing innovations that boost efficiency and access for legal professionals and clients alike. As law firms increasingly embrace new tools and solutions, their tech investments and spending reflect this digital transformation.
To future-proof your firm, leverage legal tech that goes beyond point solutions and provides an integrated approach. Lawmatics delivers a robust, all-in-one client relationship manager. Book a demo of Lawmatics today to learn how its legal-specific automation and workflows can propel your firm ahead.