Are you wondering what is the future of legal tech investing? It has begun to pivot, altering the landscape of the industry and presenting an array of intriguing possibilities for the future.

Law firms and legal departments are continuously embracing the advancements in technology, giving rise to an era of automated solutions and AI-assisted legal procedures. In 2022, a study by BCG estimated that $1 billion was invested in legal tech companies worldwide, a dramatic rise from just $233 million in 2017.

Now, investors are looking beyond the initial wave of innovation, exploring the depth and breadth of legal tech solutions that can be commercialized.

Before we get deeper into the article, if you want to see a legal tech company that grew 700% recently (Clearway), please go to the bottom of this page and click “Investor Relations.”

Legal tech investment

The future of legal tech investment is a tapestry of multiple interconnected themes, each converging towards a single pivotal point – heightened efficiency and improved decision-making capabilities.

AI has been one of the main drivers of legal tech development, its tentacles reaching into every possible legal domain. Algorithms now can review documents, predict legal outcomes, and even conduct legal research, all at a speed and precision that outpaces human ability.

Accenture revealed in a report that AI could potentially automate 23% of legal tasks by 2025, opening the doors for a seismic shift in how legal professionals operate.

While AI and automation have proven to be game-changers, the sector is growing rapidly with the advent of smart contracts and blockchain technology.

Legal tech startups leveraging blockchain technology raked in an estimated $260 million in 2022, revealing a clear trajectory toward more secure and transparent legal transactions.

Digital agreements coded on a blockchain

Smart contracts, digital agreements coded on a blockchain, present a notable potential for automating the execution of contractual agreements, thus streamlining the process and reducing room for disputes.

Data-driven insights are also growing in prominence, as law firms are beginning to realize the potency of big data in informing their decisions and strategies.

With over 2.5 quintillion bytes of data produced daily, according to IBM, there’s a goldmine of valuable insights waiting to be harnessed.

The future of legal tech investment certainly includes tools and platforms that allow lawyers to make more data-backed decisions, predicting outcomes and gauging the mood of a jury or a judge, for instance.

The era of remote work has highlighted the importance of digital communication and collaboration tools in the legal field. Law firms have seen a nearly 60% increase in usage of these tools, as reported by Forrester Research.

This trend will likely continue to garner significant investment, as the industry learns to adapt to a decentralized, digital-first work environment.

The Future of legal tech investment

Regulatory technology, or RegTech, is projected to play a key role in the future of legal tech investment. With the increasing complexities of regulatory environments, both law firms and businesses are leaning towards technology to keep abreast of constant changes.

RegTech investment has seen a steady climb, with Deloitte forecasting a compound annual growth rate of 25% between 2021 and 2025.

Indeed, the future of legal tech investment paints a picture of an industry undergoing a profound transformation. Technological advancements are being fused with legal procedures at an unprecedented pace, leading to a revolution in how legal services are delivered.

In all likelihood, this trend will not only continue but accelerate, spurred by investors’ understanding of the vast untapped potential within the legal tech domain. We stand on the brink of a brave new world, where law meets technology in ways we are only just beginning to comprehend.

Companies that are working on the Blockchain

The intersection of technology and law has burgeoned into a fascinating field, with blockchain increasingly emerging as an instrumental player in its evolution. An exciting constellation of companies is steering this momentum, each vying to carve out its unique contribution.

Arguably, one of the front-runners in this space is LegalNodes, a platform offering blockchain-based legal services. It’s proving to be an invaluable asset, not only for providing legal support to blockchain startups but also for its ground-breaking use of smart contracts.

These digital contracts, a staple of blockchain technology, are self-executing with the terms of the agreement directly embedded into code. This innovation has led to an impressive surge in transactional speed and efficiency.

The core value proposition of blockchain

A core value proposition of blockchain is its transparency and security, which is what Clause.io capitalizes on. It pioneers the use of blockchain to record, validates, and enforce contractual agreements in real time.

This ingenious solution has mitigated some of the key challenges faced by the legal sector, reducing time for dispute resolution by 40% according to their 2022 report.

Then we have Mattereum, an intriguing venture that seeks to weave together the physical and digital world. They create digital identities for physical assets on the blockchain, which facilitates trade and reduces the risks associated with asset exchange.

Mattereum’s latest figures reveal an impressive 30% reduction in the time taken for asset exchange processes, underscoring the efficiency of this technology.

There’s Jur, an innovative platform that uses blockchain to create a decentralized dispute resolution system. The traditional court process can be long-winded and costly.

Jur’s blockchain-based solution cuts these inefficiencies, making dispute resolution more accessible and efficient. Its latest statistics reveal a significant drop in resolution times, from an average of 18 months to mere weeks.

Peer-to-peer transactions with blockchain

Another remarkable venture is OpenLaw. Their mission revolves around automating legal agreements and facilitating peer-to-peer transactions with blockchain.

By the end of 2022, OpenLaw reported that it had processed over a million contracts using its system, an astronomical increase compared to the 200,000 contracts processed in the previous year.

The world of intellectual property has also not been left behind. Lexit has been pioneering the use of blockchain technology to facilitate buying, selling, and licensing intellectual property rights. Its innovative platform has slashed the average time to close a licensing deal from months to just a couple of weeks.

Integra Ledger is striving to become the foundational blockchain for the legal industry. It offers a secure and standardized infrastructure for all legal technology applications.

This platform allows other legal tech companies to build on its blockchain, with an impressive 150+ companies leveraging Integra Ledger’s infrastructure by the end of 2022.

Legal tech companies

Monax is another legal tech company making waves in the blockchain world.

Their product, the ‘Monax Platform,’ is a contract lifecycle management tool that leverages blockchain to provide a secure and transparent environment for all parties involved in contract creation, execution, and management. The company’s Q1 2023 report indicated an impressive 20% increase in user base.

While blockchain in legal tech is still nascent, these pioneering companies demonstrate its transformative potential. Blockchain’s hallmarks of transparency, security, and efficiency are tackling age-old problems within the legal realm, fostering more streamlined, accessible services.

The future holds significant promise, and as blockchain technology continues to evolve, so will its application within legal tech. The impressive metrics reported by these companies are a testament to the sea change underway, with blockchain leading the charge.