LONDON — Investment into UK start-ups focused on the legal technology sector (known as lawtech in the UK) has reached £16m, reveals Movers and Shakers: UK Lawtech Startups, a new report by Thomson Reuters and Legal Geek, the UK’s largest legal tech community.
The report, which tracks and analyzes fast-growing start-ups in the legal technology space across the UK, says that while the market is still at an embryonic stage, the value of investment in the sector shows encouraging levels of backing by venture capital firms, angel investors and players in the legal services market.
The report also points out that the level of investment in fledgling legal tech companies is likely to grow in the coming years, considering that many players in the UK legal services market are looking to invest in and harness the latest technology to increase efficiency, reduce costs or provide a broader scope of services.
Among the findings of the report, is a visual map that plots the start-up scene based on the iconic London Underground map. First created in 2016, the map provides an overview of the latest start-ups and uses different “Tube” lines to indicate the various categories or market segments that legal tech start-ups are targeting.
“The prospects for the lawtech start-up community are very exciting and lawyers are increasingly aware of the efficiencies these start-ups can bring to the market,” said Samantha Steer, Director for Large and Medium Law Firms at the Legal UK & Ireland business for Thomson Reuters. “The real challenge is to understand where the innovation is happening and just how disruptive these emerging start-ups might become.”
Download a copy of the Movers and Shakers: UK Lawtech Startups Report here.
Most of Legal Tech Start-Ups Aimed at B2B Market
Thomson Reuters and Legal Geek say that 87% of legal tech start-ups in the UK are aimed at the B2B market, with only 13% targeting consumers directly. The research shows that of the UK’s 64 leading lawtech startups, 56 are aimed at business customers, such as law firms, large corporations, small- and medium-sized enterprises, and barristers.
Of the 13 lawtech startups that target consumers directly, the most common services provided are in the ‘marketplace’ sector – using online platforms to connect lawyers with clients – and to increase access to justice.
Almost Half of Legal Tech Start-Ups Founded by Ex-Lawyers
According to the report, 45% of the lawtech start-ups were founded by former lawyers, making up the largest group of founders. This compares with 12% of founders who are from a finance or business background, and software developers, who make up 8% of lawtech start-up founders. The report also showed that 15% of the lawtech start-ups featured in the research were founded by women.
Additionally, practice management was the focus of 27% of the lawtech start-ups that target the B2B market; and 22% are focused on contracts, including legal documents as a service, contract management and contract analysis through Artificial Intelligence.
“Law firms need to catch up with the fact that these new roles are coming; technology is going to enable those new roles, and what skills lawyers [will] need in the future,” said Jimmy Vestbirk, founder of Legal Geek. The new report is the latest output of what has become an important collaboration between Thomson Reuters and Legal Geek. Other efforts include Legal Geek conferences and meetups.