Law Society's lawtech analysis shows shift in funding from US West Coast to Europe and Asia
There are far too many lawtech reports and surveys sloshing around at the moment but one that you should have a look at if you haven’t already is the Law Society of England and Wales’ comparative analysis of the state of play in the UK compared with other key jurisdictions.
Published last week, The Law Society compared the level of investment, maturity and strength of the UK lawtech market across jurisdictions including Singapore, Hong Kong and the Netherlands.
Much of the data isn’t new and the key findings won’t necessarily surprise you, but it’s a useful collation and comparison of data nonetheless. The most interesting conclusion/visualisation is probably that there is a decline in finding towards tech start-up on the US West Coast and India in favour of Canada, the US East Coast and towards Northern Europe and East Asia.
Interestingly, the report finds that with 758 UK ‘AI suppliers’, 645 have a London headquarters, meaning that London has a supplier base that it double the size of Paris and Berlin combined.
The high-level main findings of the study are:
- investment in UK lawtech is likely to increase – the report finds that lawtech and proptech are ‘on the up’ and ‘ones to watch’;
- lawtech remains less mature than other fields of digital disruption, most notably Fintech (financial technology), where funding and regulatory alignment are more advanced;
- London is becoming a hub for legal technology;
- the UK is playing a significant role in lawtech on the world stage;
- the most established lawtech products in the UK are target eDiscovery and legal research.
The five main findings in more detail were:
1. Investment in UK lawtech is likely to increase. Global investments in lawtech currently stand at $926m. While the UK lawtech market is still at an embryonic stage, the value of investment in the sector shows encouraging levels of backing by venture capital firms, angel and seed investors. The level of investment in fledgling lawtech companies is likely to grow in the coming years, as law firms seek to harness lawtech to increase efficiency, reduce costs or provide a broader scope of services.
2. Lawtech remains less mature than other fields of digital disruption, most notably Fintech (financial technology), where funding and regulatory alignment are more advanced. Growth areas of lawtech include: legal analytics; legal project management; governance and compliance; and contract management. More established areas include: collaboration tools; document management; IP management; and e-billing.
3. London is becoming a hub for legal technology. Global tech investors are drawn to London for its strengths in developing the latest cutting-edge technologies, with the UK capital topping the European investment charts for funding into fast growing sectors such as artificial intelligence (AI), cybersecurity and Fintech. London ranks close to the San Francisco Bay Area in three specialist markets for AI suppliers: insurance (88% the size of the Bay Area), legal (70%), and education (48%).
4. The UK is playing a significant role in lawtech on the world stage. The closest competitors are Singapore, Hong Kong and the Netherlands. Although the UK leads in some aspects, it is lagging in others, and overall the gap between the UK and the competitor nations is not large. This means that in order to, as a minimum, retain our position, we are likely to need to invest – and more so if we aim to improve our competitive edge.
5. The most established lawtech products in the UK are target eDiscovery and legal research. Contract management is “ripe for explosion” in terms of legal services market interest (especially B2B and in-house) and as an attractive investment. We will see these individual lawtech product types merge as start-ups work together to offer blended solutions, further pushing what tech can achieve in the legal services sector.
The report contains interesting breakdowns of the UK’s nearest competitors: Singapore; Hong Kong and the Netherlands.
However the 10 ‘emerging’ lawtech scenes identified aside from London include Toronto; Belfast; Madrid; Atlanta; Tel Aviv and San Francisco (we’d say the latter two have emerged, no?)
You can access the report in full here: https://www.lawsociety.org.uk/support-services/research-trends/lawtech-comparative-analysis-of-legal-technology-in-the-uk-and-other-jurisdictions/