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AI Software Market in Legal Industry - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The AI Software Market in Legal Industry was valued at USD 548. 44 Million, and it is projected to be worth USD 2587. 04 Million in 2027, registering a growth of 29. 17% over the forecast period 2022 - 2027.
New York, April 22, 2022 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "AI Software Market in Legal Industry - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" - https://www.reportlinker.com/p06271885/?utm_source=GNW
Law firms have always been at the forefront of using emerging technological advancements for productivity, efficiency enhancements, and artificial intelligence (AI) to play an integral role in supporting such initiatives. AI is becoming the next big technology for law firms. The legal sector is witnessing increased utility in its application owing to the developments and the computing capacity improvement in NLP, neural networks & chips.
Key Highlights
The legal sector has been increasingly adopting AI solutions to manage legal processes efficiently. For instance, an in-house legal department spends about 50% of their time on average reviewing contracts, even as basic as non-disclosure agreements, leading to the slow down of the business and creating unnecessary bottlenecks. AI can save countless hours by allowing lawyers to focus their review on relevant segments of each contract.
The rising demand for automation in applications like eDiscovery, contract review and management, case prediction, and compliance are boosting the market’s growth. Automation in contract management enhances a team’s ability to finalize deals, improves relationships with customers, and impacts many other areas of the organization to enable companies to realize tangible value. Non-compliance with increasing regulations, such as HIPAA, PCI DSS, GDPR, and other financial regulations, is becoming more expensive. According to Globalscape, in the financial industry alone, it costs organizations about USD 5.47 million to comply with IT regulations for data protection and nearly USD 15 million in non-compliance costs when a company considers fines, lost productivity, and revenues.
A combination of AI and law is expected to witness immense growth in the near future. AI can be used for various activities such as due diligence (to review a contract, conduct legal research, or perform electronic discovery functions to do due diligence), prediction technology (to predict the probable outcome of the cases being adjudicated before the court of law), legal analytics (to provide data points from past case laws and judgments and precedent law to be used by lawyers in their present cases), automation of documentation, Intellectual property, and electronic billing.
According to the "2020 Legal Analytics Study"conducted by LexisNexis, about 92% of the law firms are planning to increase their adoption of AI for analytics in the next 12 months. This is majorly driven by competitive pressures such as the need to excel in the business (57%) and client expectations (56%). The survey also found that about 73% of the companies are already using AI to gain competitive insights on opposing counsel, parties, and judges. About 59% and 48% of the companies are using AI to determine case assessment and case strategy, respectively.
The advancement of technology in the law field has definitely led to an evolution in the operations of legal professionals. As legal operations become increasingly automated, this has propelled legal professionals such as lawyers and paralegals to acquire proficiency in operations such as word processing, telecommunications, presenting data, and so on.
It is essential that the AI-driven machine learning robots/software are developed in such a manner that keeps the private data of the parties involved safe and secure. Since machine learning works on a huge amount of data, it becomes all the more essential that the legal framework provides protection against data misuse, confidentiality must be maintained, and a fair due process needs to be followed, with a security layer to check breach of privacy must be done.
By application, Case prediction is expected to have the largest growth rate. The recent advent of artificial intelligence (AI)-based approaches are becoming more and more popular. A legal decision system is established by automatically predicting verdicts to support lawyers based on AI.
COVID-19 resulted in many corporate legal departments and law firms purchasing AI/machine learning tools for their law libraries. Technology plays a significant role in law libraries. Artificial intelligent platforms, such as eDiscovery software, have aided a lot in battling COVID-19. Such software is developed to help litigation attorneys get more quickly to the core of a case, which has shown promise in helping medical researchers fast-track their inquiries into how to treat COVID-19.
Key Market Trends
Case Prediction is Expected to Witness a Significant Growth Rate
Predicting legal judgment is a long-standing topic in the theory and practice of law to improve judicial coherence, access to justice, and administrative efficiency. Therefore, various methods have gradually emerged, from simple computational models for predicting legal decisions to advanced analysis algorithms.
The recent advent of artificial intelligence (AI)-based approaches are becoming more and more popular. A legal decision system is established by automatically predicting verdicts to support lawyers based on AI.
A legal automation system, called an AI lawyer, was invented to predict a decision in the United States. Since then, constant efforts have been made to improve its accuracy. It reads a considerable number of judgment documents, analyzes the content based on unique algorithms, and makes decisions to determine the case automatically.
Due to the significant increase in the number of proceedings in recent years, it has become more complex and time-consuming for lawyers to make a correct verdict in legal decisions.
As the number and diversification of online privacy breaches are expected to increase, developing automated predictive models for legal decision-making can significantly reduce the effort of legal professionals and businesses.
North America is Expected to Hold a Major Share
North America is projected to hold the highest market share, owing to the rising adoption of cutting-edge technologies, such as AI. Furthermore, the region has a strong foothold of vendors that provide AI software and platforms for the legal industry. Some of them include OpenText Corporation, IBM Corporation, Ross Intelligence Inc., Veritone Inc., and Neota Logic Inc.
North America recorded some of the most significant legal, technological startup investments in recent years. Onit, a US-based company that provides enterprise workflow solutions for legal and contract management, won a strategic investment of USD 200 million. In addition, Canada-based cloud legal management company Clio won a USD 250 million Series D funding round. This was one of the largest investments in a legal technology company and a Canadian technology company.
The development of AI-based legal software in the region is supported by the provision of business incubators and innovation labs. Established law firms, ALSPs (such as Thomson Reuters), Big Four, and financial companies (such as Barclays) partnered or established their own incubators to support the growth of legal technology. These incubators have access to the advice, expertise, and often investment that innovative companies need to succeed in the market and provide space to support legal tech startups and scale-up development.
AI is helping lawyers improve their productivity, which is positively boosting the market’s growth in the region. The region witnessed a growing number of acquisitions and partnerships. For instance, in March 2022, Epiq, a global technology-enabled services company for the legal industry and businesses, acquired Fireman & Company, a management consulting firm for the legal industry. With this acquisition, Epiq will be able to offer a wide range of knowledge management and data management expertise, providing Epiq with an expanded suite of strategic legal advisory services and technology solutions for its clients.
Competitive Landscape
The AI software market in the legal industry has limited market penetration, which presents a huge opportunity for the existing players as well as the outsiders willing to enter the market space. However, the existing market players have a considerable head-start over new entrants in the market. The high prospects and the growing investments, as well as supporting initiatives, are expected further to increase the competition among the existing market players.
The market is emerging, and over the forecast period, the market competition is expected to be intense owing to the entry of new players. Vendors are offering solutions and platforms for different applications as per end-user industries’ needs. The companies are adopting numerous organic and inorganic growth strategies, such as solution enhancements, partnerships, agreements, mergers, and acquisitions, to further expand their presence in the global legal AI software market.
Mar 2022 - HaystackID, a professional E-Discovery service company that supports law firms and corporate legal departments, deepened its partnership with Reveal, another E-Discovery software provider using AI. HaystackID, a long-time Brainspace provider, leverages Reveal’s end-to-end cloud-based AI platform for processing, early case assessment, document review, research, production capabilities, and a customizable API-enabled back-end with visual analytics.
Jan 2022 - LinkSquares, an AI-powered provider of contract lifecycle management and analytics tools, announced the AI ??capabilities of its pre-signing technology, LinkSquares Finalize. LinkSquares Finalize’s AI-powered contract reviews allow general counsel and legal teams to automate reviews, reveal important information from contracts, accelerate transactions, minimize risk, and reduce manual processes. By extending LinkSquares’ AI capabilities from Analyze, LinkSquares’ post-signature tool, to Finalize, the company aims to provide the first end-to-end AI-powered contract lifecycle management platform.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report: https://www.reportlinker.com/p06271885/?utm_source=GNW
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