713% Growth: Legal Tech Set An Investment Record In 2018
The year 2018 brought many problems to business, ranging from a significant loss of confidence in social networks because of Facebook user data leaks to the collapse of the global stock and cryptocurrency market. However, last year was very successful for legal tech and set a new record for investment in the industry.
In the last few years, the growth dynamics of investments in legal tech companies were not high. Investors were eyeing a fairly young business area and refrained from large transactions. In 2016, $224 million was invested in the industry; in 2017, $233 million was invested. As you can see, gradually the total number of transactions decreased, and the average amount of one transaction increased. But in 2018, there happened to be explosive growth and the total amount of investment became greater than ever before.
Among other things, this is due to the relevance of e-Discovery as one of the most popular destinations in the whole legal tech industry. There is a curious connection between the geography and the field of activity of companies that have attracted investments of more than $1 million. Among more than 30 such companies, only two are not based in common law countries (the United States or one of the countries of the Commonwealth of Nations). Among other things, this is due to the relevance of e-Discovery as one of the most popular destinations in the whole legal tech industry. In a nutshell, it is an electronic service for finding relevant information about lawsuits and investigations. The need for e-Discovery use varies depending on the legal tradition of the state. In common law countries, e-Discovery does provide great help to lawyers, saving them time and improving the accuracy of finding suitable court cases. However, in other legal systems, e-Discovery cannot be widely used and develops with difficulty.
The situation is different with another leading branch of legal technology: legal research. This is the only area that overtakes e-Discovery in the number of companies that deal with it. First of all, this is due to the indisputable benefits for all, because research on legal documents is more or less present in the business activities of each state, regardless of whether it belongs to a particular legal system.
The least popular areas in legal tech in 2018 are e-Billing and intellectual property, where machine learning is widely used. These areas are presented by three companies on each side. In 2018, only one of them has raised investments, a company which is developing an IP-solution.
Courtesy: 713% Growth: Legal Tech Set An Investment Record In 2018