UK legaltech sector sitting on untapped £22bn annual market opportunity, report finds
LawtechUK study says serving SMEs and consumers alone could be worth up to £11.4bn a year
The UK legal technology sector has a potential £22bn annual market opportunity, according to a new report from LawtechUK.
The study – Shaping the Future of Law – shows that serving unmet demand from small and medium-sized businesses (SMEs) and consumers could be worth up to £11.4bn in annual revenues, while also enabling £8.6bn in cost savings for SMEs every year. In addition, legal businesses in the UK could generate £1.7bn in annual productivity gains through the use of legaltech.
Jenifer Swallow, LawtechUK director at Tech Nation: “The law is critical in all our lives and businesses and it should be easy to engage with and affordable and effective for everyone. Lawtech is how we make that happen. The sector is seeing incredible growth – with lawtech start-ups and scale-ups growing at 101% over the last three years and adoption levels increasing during Covid-19 across our courts, legal businesses and in-house legal teams.”
The UK's roughly 200 legaltech start-ups and scale-ups had attracted £674m in investment by December last year, with its growth rate outpacing the fintech, climate tech and healthtech sectors, the report stated. UK legaltech businesses could attract £2.2bn in investment every year by 2026, contributing 12,500 jobs to the economy over the same period.
The report showed that the fastest growth is coming from regulatory compliance-related legaltech, an area growing more than two-fold between 2018 and 2020. Legaltech aimed at the consumer and SME category grew by 74% over that period, with legal document creation, management and review tech growing by 24%.
LawtechUK – a government-backed initiative within Tech Nation, a UK tech entrepreneur network – is calling for greater collaboration across the legal industry to capitalise on the growth opportunity.
Swallow added: “Building on this growth, working collaboratively across the sector, we can realise the full strategic opportunity of lawtech on an accelerated timeline and deliver results no one organisation could achieve alone – for the benefit of regular people, businesses, the UK economy and the wider global ecosystem. The £22bn market opportunity of lawtech evidenced in this report only scratches the surface of the true impact we can have through digital transformation in law.”
Canadian legaltech provider Clio became the world’s first legal practice management unicorn earlier this year when a Series E funding round saw its value jump to $1.6bn. Clio said at the time that the funds would be used to increase its UK and Ireland-based workforce by 40% this year, with a focus on its product and engineering teams.