Sackman: Benefits of lawtech to be felt nationwide
Investment in UK legal tech has surged to a record level this year, with £117m raised by 27 companies in the first six months – close to the total for the whole of 2024, according to LawtechUK.
With the average legal tech deal hitting £4.3m, the first half of this year accounted for 83.5% of last year’s total of £140m from 30 companies, with the sector “on track for strong year-on-year growth if the pace continues”.
“Add in eight acquisitions in H1 2025, and it’s clear that investor appetite for legal innovation and scalable solutions is accelerating fast.”
B2B continued to dominate the legal tech market, accounting for just over 70% of all activity; B2C legal tech products accounted for only 17%, with ‘hybrid offerings’ at 11%.
LawtechUK – the government-backed body to promote the sector – said documents and contracts (20%), risk (17%), and matter management (14%) were “leading the charge” in funding, “signalling strong investor appetite for solutions that streamline legal workflows, manage compliance, and address risk”.
Acquisitions were “spread more evenly across categories, suggesting consolidation is happening across the ecosystem rather than being concentrated in one niche”.
London continued to dominate legal tech activity with 68% of deals, but only 53% of investment value.
Figures for the first LawtechUK Investment Snapshot came from its ecosystem tracker, which maps 400 UK-founded startups and international players active here.
Female-founded legal tech firms represented a quarter of those raising funds in the first half of 2025, with the overall share of female-founded companies rising slightly from 17% in 2024 to 19% in 2025.
“Notably, more than 40% of female-founded lawtechs that raised in H1 are connected to a LawtechUK programme, highlighting the value of structured support in levelling the playing field.”
Nearly half of the UK legal tech firms that secured investment during the first half of this year were alumni of the various LawtechUK support schemes.
Justice minister Sarah Sackman KC said the sector continued to go “from strength to strength”.
She went on: “We are committed to continue working with both legal professionals and innovators across the sector to ensure the economic and social benefits of lawtech are felt nationwide and the UK remains at the cutting edge.”
Christina Blacklaws, chair of the LawtechUK panel, added: “It’s both exciting and inspiring to see that the spectacular success in 2024 has already been eclipsed, with the first half of 2025 showing huge growth in the lawtech sector.”
LawtechUK is trying to push greater investment into B2C innovation. In a separate report, Transforming Consumer Legal Services, it noted that the consumer market was estimated in 2024 at £19bn, creating fertile ground for technological innovation and market disruption.
On investment, it advised startups to address concerns over scalability by “demonstrating a clear path to scaling”, for example “focusing on niche markets initially to build a working proof of concept”.
To encourage consumer awareness, they should consider outreach strategies such as partnerships with community organisations, public service campaigns, and digital marketing campaigns to reach their target audiences.
When it came to the not-for-profit sector, researchers said: “Although charities have recognised the potential of technology tools like chatbots and online forms to provide free legal advice, these may not be appropriate for users who seek human interaction and compassion.
“The spectrum of consumer needs highlights the importance of balancing technological solutions with human-centred services delivered by charities.”
The report went on: “While the UK market for consumer legal services presents substantial opportunities for technological transformation, realising this potential will require fundamental shifts in the culture of legal service delivery.
“Such systemic change may call for embedding greater awareness of legal issues and building more transparency in how legal services are performed and benchmarked.”