UK start-up businesses in the embryonic 'lawtech' sector have received £16m in backing from investors over the past 18 months, according to a report published today. Nearly half of these businesses were started by lawyers.
However, according to the authors of Movers and Shakers: UK Lawtech Startups, the legal technology field is smaller than would be expected given the size of the legal services market. The report, by business information publisher Thomson Reuters and Legal Geek, described as 'the UK’s largest lawtech community', contrasts the lawtech sector with its financial services equivalent 'fintech'. This attracted more than £600m in investment last year.
'The UK has become a global leader in fintech, but people do not often talk about lawtech in the same way,' said Jimmy Vestbirk, Legal Geek's founder. 'However, the UK has a progressive regulator for law firms, access to capital, tax incentives for angel investors and a world-leading legal profession. There is also a huge tech talent pool, particularly in artificial intelligence, so what better place for lawtech to thrive.'
According to the report, 45% of the lawtech start-ups were founded by former lawyers, making up the largest group of founders. The next largest group, 18%, had a finance or business background, while 12% were software developers. The fourth largest category had a background in journalism.
Start-ups range from businesses exploiting leading-edge artificial intelligence to websites organising crowdfunding of cases. Examples of investments cited in the report include:
- £2.1m in venture capital funding for CheckRecipient, a cybersecurity tool which prevents emails being sent to the wrong recipient
- £1.6m in seed capital for CrowdJustice, a litigation crowdfunding platform
- £800,000 in angel investment for ThoughtRiver, a machine learning/risk visualisation tool
Nearly all - 87% - of lawtech start-ups in the UK are aimed at the business market, with only 13% targeting consumers directly.