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A new report: Legaltech Startup Report 2019—A Maturing Market

Abigail Connor

18 Oct 2019

The UK is at the forefront of changing the business model of legal service delivery, with legal professionals looking actively to transform the way they work. Innovation is the watchword and for many firms the realisation of efficiencies through technology has become a reality. The legal services market continues to demonstrate resilience, with the UK market in 2019 estimated at around £35bn and growing. Effective use of technology to deliver efficiencies and enhance customer value is becoming more relevant as a differentiating factor in winning work. However, the considerable fragmentation of tech providers in the legal space can make navigating the market a challenge. Firms report they often lack the time, knowledge or expertise to implement a targeted technology strategy.

The year of 2019 has also proved positive for UK legaltech. A handful of new startups were founded, adding to the existing 110 (UK only) on the Legal Geek startup map. A record £62m of external investment already made in 2019 has taken total funding of UK legaltech startups to over £260m. The government pledged £2m in June 2019 to support new and emerging technologies that will drive growth in the legal sector, and the University of Oxford launched a new degree subject in Law and Computer Science which will educate new undergraduates in the “terrain at the boundaries of their two disciplines”.


Download your copy of ‘Legaltech Startup Report 2019—A Maturing Market‘.


The European legaltech scene is also booming. Barcelona-headquartered Red Points holds the title of highest-funded legaltech company in Europe, with a ~£30m Series C round in 2019 taking its total funding to over £50m. Several European countries have thriving legaltech communities. On the Legal Geek startup map approximately 150 EU-based startups are featured. The total number is clearly much greater than this and we aim to increase our coverage of the European market over time.

Analysis of the investment in UK legaltech shows a concentration among a small number of providers. To date, 75 percent of all funding can be attributed to just ten companies out of the 55 for which we have been able to gather data. Furthermore, 80 percent of all funding has been raised in the last three years. This very recent rise in investment interest is in no small part attributable to the increasing relevance of using tech to deliver legal services and the appetite within the legal services market to deliver change through the use of technology. It does, however, draw a picture of a tech industry in which it is challenging to succeed.

Our research shows that 35 percent of all companies on the Legal Geek startup map focus on the consumer market—the supply of legal services direct to individuals and businesses. Within this category, ‘Marketplaces’ is the most common type of solution—online portals or platforms for finding and engaging a lawyer or legal firm. Given the difficulty consumers often face accessing reasonably priced and adequate legal support it is reasonable that this has been identified as a need in the market. Under the ‘consumer’ category, ‘Legal documents as a service’, comes a close second in popularity. Relating to the provision of templates for documents and contracts, this type of solution does not require overly complex tech development and as such may have a lower barrier to entry, but crucially solves a significant and ongoing need for a wide variety of consumers.

The ‘Documents and contracts’ category is by far the most common focus for solutions aimed at legal professionals. Capabilities are centred around document automation, document analysis and contract lifecycle management. Advances in natural language processing and machine learning have manifested in solutions which reduce the time taken to perform mundane tasks to minutes rather than hours or days; a highly compelling proposition, albeit one that raises the question of how fee structures may need to adapt in response.

Some of the most successful companies on the map, judged by funding alone, are those with their roots in an incubator or lab. The opportunity to test and refine concepts, technologies and ideas at the coalface of legal service delivery appears to be key in developing market-leading solutions which resonate with customers. The number of incubators and labs in the UK continues to grow, with the most recent, ‘ColLABorate’, launched by Slaughter and May in April of this year.

Legaltech startups in the UK and Europe have made strong inroads into shaping the nature of legal service delivery; all signs suggest that this trajectory is set to continue, and we are excited to see what the future holds.

Download your copy of ‘Legaltech Startup Report 2019—A Maturing Market‘.


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