Global Legal AI Software Market - 2023-2030

Global Legal AI Software Market - 2023-2030

Global Legal AI Software Market reached US$ 0.5 billion in 2022 and is expected to reach US$ 3.7 billion by 2030, growing with a CAGR of 28.7% during the forecast period 2023-2030.

Legal documents, contracts, case law and regulatory documents are merely a few of the numerous kinds of data that the legal sector produces and this data can be processed and analyzed by legal AI software effectively, making it a useful tool for law offices and legal departments. Legal AI software automates many manual and time-consuming tasks, such as contract review and legal research and this leads to increased efficiency and significant cost savings for legal professionals.

For instance, on 25 April 2023, Luminance, a leader in legal process automation, partnered with NexaConnex, a brand of Nexa Law, to integrate Luminance's AI technology into the NexaConnex legal service offering. NexaConnex, a fast-growing legal services provider in UK, supports mid-market law firms in various sectors. The partnership was initiated when NexaConnex used Luminance's AI to streamline a complex and time-sensitive disclosure exercise for one of its law firm clients, resulting in significant time savings.

Asia-Pacific is among the growing regions in the global Legal AI Software market covering more than 2/5th of the market and the region is experiencing significant economic growth and increased cross-border business activities and this has led to a higher volume of legal work, including contract management, due diligence and compliance, driving the demand for AI solutions to streamline these processes.

Dynamics

Growing Demand for Automation

Automation of routine tasks and processes allows legal professionals to focus on higher-value tasks, such as legal analysis and strategy development and this leads to increased efficiency and productivity within law firms and legal departments. Automation helps reduce operational costs by minimizing the need for manual labor in tasks like document review, contract analysis and legal research, this cost reduction is appealing to legal organizations seeking to optimize their budgets.

According to GlobalSCAPE, Inc. and Ponemon studies the cost of disregarding data privacy regulations has significantly increased in recent years. Average annual expenditures for non-compliance for organizations are US$ 14.82 million, which is 2.71 times more expensive than keeping compliance. The amount of sensitive or confidential information handled by each industry affects the differences in compliance costs that range from US$ 7.7 million on average annually for media organizations to over US$ 30.9 million for financial services companies.

Collaboration Between Companies Boosts the Market

Legal cases and issues are becoming more complex, requiring multidisciplinary expertise. Many law firms and legal departments now operate on a global scale, serving clients and managing cases in multiple jurisdictions. Collaboration tools facilitate communication and information sharing among teams located in different regions, helping them work efficiently across borders.

For instance, on 19 October 2022, Siskind Susser, P.C. is partnering with a legal software company to launch a new cloud-based AI case management technology aimed at aiding immigration processes. Visalaw.Ai, founded by lawyers and innovation professionals at the immigration law firm Siskind Susser, P.C., has entered into a collaboration agreement with Fastcase, a legal technology and data company, to assist its NextChapter company in developing a state-of-the-art immigration case management and document automation system.

Advancements in Machine Learning and Big Data Analytics Boosts the Market

AI software in the legal field benefits from advancements in machine learning algorithms and these algorithms learn from vast varieties of datasets of legal cases, contracts and other documents to make predictions and assist lawyers in their work. Legal AI software can harness the power of big data analytics to uncover patterns, trends and insights within legal documents and case histories, this technology helps lawyers make data-driven decisions.

For instance, on 9 August 2023, Gunderson Dettmer, an international law firm with a focus on technology clients launched its proprietary internal generative AI chat app called ChatGD and this move makes Gunderson Dettmer the first US-based firm to develop an internal tool using generative AI technology. ChatGD is an AI application that allows attorneys to query and manipulate documents securely using OpenAI's models through Microsoft Azure.

Inaccurate Results

Legal AI is not yet capable of completely automating complex legal tasks. It can assist with document review, legal research and contract analysis, but human oversight and judgment are still essential, particularly in cases involving novel legal issues. The quality and quantity of the data used to train legal AI are extremely important. Results may be inaccurate or prejudiced if the training data is biased lacking or out of date.

Legal AI may struggle with understanding the broader context or nuances of legal documents and cases, which are often critical in legal decision-making. AI lacks the creativity and intuition that human lawyers possess, making it less effective in tasks requiring creative problem-solving or strategic legal thinking. The use of AI in the legal field raises ethical concerns, especially regarding privacy, bias and transparency. AI algorithms may inadvertently perpetuate biases present in historical legal data.

Segment Analysis

The global legal AI software market is segmented based on component, deployment type, application, end-user and region.

Legal AI Software Provides Services that Automates Tasks

As laws and regulations become more intricate, legal professionals require advanced tools to manage and interpret vast volumes of legal information efficiently. Legal AI software provides the means to process this complexity. Legal AI can automate routine and time-consuming tasks, such as document review and contract analysis and this automation reduces operational costs and allows legal professionals to focus on higher-value tasks.

For instance, on 8 May 2023, Law Bot Pro is a groundbreaking app developed by a law student, Mandaar Mukesh Giri, aimed at providing easy and accessible legal information to the public. The app features an intelligent chatbot that answers legal questions in plain language, making legal knowledge more understandable. The app's chatbot is designed to simplify legal information, making it accessible to individuals with varying levels of legal knowledge.

Geographical Penetration

Automation of Repetitive Tasks Boosts the Market

North America is dominating the global Legal AI Software market and the region has a vast and complex legal landscape, with a high volume of legal cases, contracts and regulatory compliance requirements. Legal AI software helps law firms and legal departments manage this workload more efficiently. Law firms in North America are under pressure to reduce costs while maintaining the quality of their legal services. Legal AI solutions automate repetitive tasks, allowing legal professionals to focus on higher-value work.

For instance, on 21 June 2023, Aderant, a provider of legal business management solutions, introduced MADDI, an AI-powered virtual associate designed to automate routine tasks and provide actionable insights in the legal industry. MADDI is pre-trained on Aderant applications, making it easier for law firms to adopt and ensuring quick time-to-value. MADDI's continuous learning capabilities are expected to drive firm-wide growth and optimization.

Competitive Landscape

The major global players in the market include International Business Machines, Thomson Reuters Corporation Reuters Corporation, Open Text Corporation India Private Limited, Neota Logic Inc., Cognitiv+, Casetext, Inc., Klarity Intelligence, Inc., CaseMine, Kira Inc. and Reed Elsevier Inc..

COVID-19 Impact Analysis

The pandemic forced law firms and legal departments to expedite their digital transformation efforts. Remote work and the need for efficient, accessible legal services led to a greater adoption of AI-powered legal solutions. Legal professionals needed tools that could facilitate remote collaboration, document sharing and secure communication. Legal AI software with collaboration features became essential.

The pandemic generated an increase in legal workloads due to contract disputes, regulatory changes and legal issues related to the crisis. Legal AI software helped manage these additional demands. Many businesses faced financial challenges during the pandemic, making cost control a priority. Legal AI software helped reduce legal operational costs through automation. Legal AI tools ensured the continuity of legal services, enabling lawyers to work on cases and projects despite lockdowns and disruptions.

The pandemic emphasized the importance of data privacy and security as remote work increased the vulnerability of sensitive legal information. Legal AI solutions had to enhance security measures. Legal AI software had to adapt to changing legal needs, such as handling force majeure clauses in contracts or addressing new regulatory requirements related to the pandemic.

AI Impact

AI-powered legal software can automate time-consuming tasks like document review, legal research and contract analysis and this significantly reduces the time and effort required for these activities, allowing legal professionals to focus on more strategic and value-added tasks. Automation of legal processes leads to cost savings for law firms and legal departments. AI leads to perform tasks 24/7 without the need for breaks or overtime, making it a cost-effective solution.

AI algorithms analyze a large volume of legal data with a high degree of accuracy and this reduces the risk of errors and ensures that legal documents and contracts are reviewed thoroughly. AI can extract valuable insights from legal data, helping lawyers and organizations make informed decisions. It can identify patterns, trends and anomalies in legal documents, which can be crucial in litigation, compliance and risk management.

For instance, on 7 September 2023, Microsoft introduced a Copilot Copyright Commitment to address concerns raised by customers regarding potential intellectual property (IP) infringement claims when using its AI-powered Copilot services and this commitment assures customers that they can use Microsoft's Copilot services and the generated output without worrying about copyright claims.

Russia- Ukraine War Impact

The conflict may lead to increased geopolitical uncertainty, affecting international business transactions and trade agreements. Legal AI software can quickly adapt to changing regulations and trade policies will be in higher demand. The war may result in contractual disputes, invoking force majeure clauses and necessitating legal review and arbitration. Legal AI tools capable of analyzing force majeure clauses and providing relevant case law and guidance will be valuable.

As sanctions and export control regulations evolve organizations will need Legal AI software to ensure compliance and these tools can help in identifying sanctioned entities, tracking regulatory changes and managing compliance risks. Companies operating in affected regions may face intellectual property challenges. Legal AI solutions that assist in patent, trademark and copyright protection will be crucial.

By Component
• Services
• Solution

By Deployment Type
• On-Premise
• Cloud

By Application
• Legal Research
• Contract Review and Management
• E-Billing
• Case Prediction
• Others

By End-User
• Law Firms
• Corporate Legal Departments

By Region
• North America

U.S.

Canada

Mexico
• Europe

Germany

UK

France

Italy

Russia

Rest of Europe
• South America

Brazil

Argentina

Rest of South America
• Asia-Pacific

China

India

Japan

Australia

Rest of Asia-Pacific
• Middle East and Africa

Key Developments
• In March 2023, PricewaterhouseCoopers International Limited (PwC) is collaborating with tech startup Harvey to introduce an artificial intelligence (AI) chatbot service for its 4,000 lawyers across 100+ countries. The AI assistant, integrated through a 12-month contract, aims to assist PwC lawyers in tasks such as contract analysis, regulatory compliance, due diligence and other legal advisory services.
• In May 2023, Reed Elsevier Inc. launched Lexis+ AI in beta, utilizing generative AI to transform the legal research and document drafting process. The solution guides users in drafting legal documents or client emails by creating a first draft and allowing users to modify language and tone using prompts. Lexis+ AI has been developed with a focus on privacy and follows RELX responsible AI principles.
• In July 2023, Berlin-based startup Legal OS, backed by Google, has publicly launched its generative AI platform designed for in-house legal teams. The platform offers business teams, such as sales and marketing, a legal assistant that can operate within their existing workflows.t aims to provide in-house teams with on-demand legal expertise, enabling immediate support for tasks like contract negotiation and review through chat interfaces embedded in communication tools, email or browsers.

Why Purchase the Report?
• To visualize the global legal AI software market segmentation based on component, deployment type, application, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of legal AI software market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global legal AI software market report would provide approximately 69 tables, 66 figures and 190 Pages.

Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies