New figures show lawtech funding surges with £116.6m raised by 27 UK-founded firms
The UK’s lawtech sector is on track for its strongest year on record, with investment levels in the first half of 2025 nearly matching the total raised across the whole of the previous year. According to new data from the LawtechUK Investment Snapshot, 27 UK-founded lawtech companies secured £116.6 million in funding between 1 January and 30 June 2025.
That figure represents a major leap for the sector, which attracted £139.6 million in the entirety of 2024 from 30 firms. The report identifies 2025 as a “breakout year” for legal innovation in the UK, with a surge in both funding and the number of active start-ups. The average deal size climbed to £4.3 million, underscoring what analysts describe as growing investor confidence in scalable legal solutions.
LawtechUK, the government-backed initiative supporting the digital transformation of legal services, said the latest figures show “record visibility and growth across the sector”. The snapshot found that investor appetite is expanding rapidly, particularly for tools that reduce administrative burdens, automate workflows and enhance risk management.
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The report highlights three main investment areas: document and contract management (20%), risk and compliance (17%), and matter management (14%). Together, these segments accounted for more than half of all deal activity, reflecting the legal industry’s growing demand for digital systems that streamline complex processes.
The UK’s lawtech ecosystem has also continued to expand in size. The number of active lawtech businesses has grown from 270 in 2024 to 295 in 2025, signalling sustained innovation and a steady flow of new entrants. Start-ups in this field now range from AI-powered document automation providers and compliance monitoring tools to virtual legal assistants and data-driven risk analytics platforms.
While London remains the dominant hub for legal technology investment—hosting 68% of all deals—its share of total investment value has fallen to 53% (£63 million). The report interprets this as a sign that regional lawtechs are achieving larger-scale funding rounds than in previous years. Scotland has emerged as the second most active innovation hub, followed by the North West and the Midlands, marking what the report describes as a “broadening of the national innovation landscape.”
Christina Blacklaws, chair of the LawtechUK panel, said the figures demonstrate both the resilience and growing maturity of the UK’s lawtech market. “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,” she said. “I’m so proud that LawtechUK has had a real impact in driving this achievement, and I’m confident the sector will continue to grow significantly.”
The report also reflects wider trends in artificial intelligence adoption within the UK’s legal profession. Earlier research found that eight in ten of the UK’s top 20 law firms have now deployed third-party AI tools, while nearly half have either built their own systems or collaborated on customised models. More than 50% of firms provide AI training to their lawyers, and six major firms have gone further by investing in AI start-ups or launching internal innovation incubators to accelerate in-house technology development.
Industry analysts say the combination of robust start-up activity, investor engagement and major law firm adoption signals that the UK has solidified its status as a global leader in legal technology innovation. If the current pace continues, total lawtech investment in 2025 is expected to surpass £200 million, setting a new benchmark for the sector’s commercial and technological potential.