The report from Raymond James shows that legal tech-focused VC and growth equity fundraisings increased quarter-on-quarter by 100% in Q1 of 25
Investment banking firm Raymond James today (8 July) released its legaltech, newlaw and legal business services insights report, which analyses investment and merger activity within the industry – and says there is material increase coming down the track.
Written by managing director Junya Iwamoto (pictured above), the report covers venture capital investments and growth; equity fundraising; and M&A activity, in terms of both recent and scheduled activity. Iwamoto has focused on the legal sector since 2012, when he guided Tikit’s then CEO David Lumsden through Tikit’s public takeover in 2013 while working at Investec.
Speaking to Legal IT Insider, Iwamoto said: “The key takeaway in the introduction is the theme of convergence. Historically, we’ve always talked about the business of law and the practise of law. We’ve always talked about software and data in separate sentences. I think the Clio’s recent acquisition of vLex very much bridged that practise of law and business of law to try and build intelligent legal tech.
“The quote that Jack Newton uses is that essentially you need a single plane of glass to be able to see not only your legal workflows and legal data, but then also to be able to distribute workflows and orchestrate workflows between a legal professional and an agent.
“These aren’t necessarily new concepts: there are lots of workflow software businesses out there that that focus on being a load balancer; allocating workflows to where they are most productive. But the combination of the practise of law and the business of law, that’s a fairly new thing.”
The report shows in diagrammatic form the rapid expansion of AI champions in the ‘practice of law’ arena (see pictures below), which continue to attract growth capital, as evidence by the rising quantum of funds raised by legaltech scaleups.
Iwamoto said: “We want to see what is going on in the venture capital world because that is a precursor of what’s going to happen in the M&A world in five to 10 year’s time. And we saw legal tech focused VC and growth equity fundraisings increased quarter-on-quarter by 100% in Q1 of 25. Whilst valuations have remained broadly stable, actually the sizes have become a bit bigger. So for me this is just startups in the legal tech world growing, and those winners are now continuing to increase their fundraisings in size.”
Raymond James’ version of the market extends to Western Europe, the Nordics, Israel, North America, Japan and Australasia. “Within those markets what we’re seeing is that activity is really driven by AI champions, and particularly the practise of law continuing to attract money,” Iwamoto said.
M&A deals have stayed fairly stable in the first half of the year but Iwamoto says that in the second-half of 25 and 26, we’ll see a material increase in the velocity of M&A deals being announced. “We’re seeing that the the pipeline is very busy for legal tech businesses,” he said.
“This concept of convergence continues,” he said. “Historically, we’ve always focused on is the end user a corporate lawyer? Are they an internal legal department counsel or are they an insolvency practitioner? We’re now thinking in terms of ‘are you a legal professional? People generally have the same pain points.”
You can read the report in full here: https://legaltechnology.com/wp-content/uploads/2025/07/1H2025-European-Legal-Tech-Services-Insight-vF.pdf