Lawtech funding boom fuels UK startups

When it comes to Artificial Intelligence (AI), the UK is pulling ahead in one specific seb-sector: legal technology. Also known as lawtech, the area is proving to be a magnet for money, as startups roll out increasingly cutting-edge solutions to win funding.

According to LawtechUK, a Ministry of Justice-funded initiative, 30 lawtechs raised £140m in 2024, which is 10% more than they did in 2023. There are currently 376 lawtechs active in the UK, as reported by the LawtechUK Ecosystem Tracker. Most operate out of London.

Lawtech is a low-cost alternative to hiring expensive legal teams, which means startups and SMEs stand to benefit most from its expansion. The trend could also serve to drive positive change within law firms themselves.

Funding boom for lawtech

Data from LawtechUK finds that, since 1990, UK lawtech has collectively attracted £1.7bn in investment. In recent years, though, scale-up has accelerated, triggered by the whirlwind evolution of AI from experimental chatbot, to an integral part of modern business operations.

Last month, London-based Luminance raised $75m (roughly £60m) in Series C funding. In October, AI legal assistant Genie AI pocketed around £13.3m.

At the start of this year, we also named Robin AI runner-up in our 2025 Startups 100 Index. Robin’s patented large language model (LLM) can review contracts in seconds. Adding to the pool of AI funding, it’s also earned around $36.5m in just two years.

More could be on the way. In recognition of Brits’ burgeoning “global advantage” in lawtech, the Government this week announced a further £1.5m funding boost for the sector.

The UK already has the largest legal services market in Europe. Courts and Legal Services Minister, Sarah Sackman KC MP, described lawtech as “a powerhouse for the UK economy”, adding “Lawtech is making legal services faster, more efficient, and more accessible.”

How is lawtech changing legal services?

The marriage of AI technology and the UK legal sector may cause anxiety within the legal sector. Research has shown that many employees are wary about how automotive platforms affect their job security. 11% of UK workers already report having lost their job to AI.

However, the partnership could also benefit the wider industry and its work culture, thanks to its potential to promote healthier work practices for legal professionals.

The legal sector is known to have much higher working hours than average, with many workers feeling pressured to work overtime to meet the demands and expectations of their roles. In a recent Startups poll, 13% of senior leaders in professional service firms said overtime is necessary for their operations.

As the majority of lawtech startups are focused on automating fiddly admin processes, such as contract reviewing, this would free up time for legal teams and help them to disconnect.

In fact, this is one of the main reasons that Robin AI was launched. CEO and co-founder, Richard Robinson, says he started the business to find a “new purpose”, following four sleepless nights working at a Magic Circle law firm.

“Robin is completely aligned with the incentives of in-house legal teams”, says Robinson. “They want to keep costs down while maximising the work they get through, and AI supervised by human legal professionals helps them hit those goals.”

UK at AI action stations

The Government’s latest round of funding aligns with its AI Opportunities Action Plan, unveiled back in January. This backing, alongside startup innovation, has helped to propel the UK into being a global challenger in legal tech.

The US has the lion’s share of the market. Across the pond, the legal technology market is expected to register a CAGR of 10.2% from 2025 to 2030.

But if UK firms embrace this tech, they could carve out a niche to make legal services more accessible and efficient, modernise the sector, and gain an upper hand in the AI race.