Global Generative AI in Law Market, By Service Provider (AI Technology Companies, Legal Technology Startups,and other ), By Firm Size (Large Law Firms, Mid-Sized Firms, and Other), By Deployment Model, By Application, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

Global Generative AI in Law Market size is expected to be worth around USD 803.5 million by 2032 from USD 65.6 million in 2022, growing at a CAGR of 29.3%, during the forecast period from 2023 to 2032.

Generative AI in law assists legal professionals in conducting research, analyzing case law, and extracting relevant information from vast amounts of legal texts. It can provide summaries, highlight key points, & offer insights to support legal decision-making. The market is driven by continuous technological advancements in AI, machine learning, natural language processing (NLP), and other fields. As AI algorithms and models improve, generative AI systems become more sophisticated, capable of understanding complex legal texts and generating high-quality legal content.

Driving Factors

Enhanced Efficiency and Cost Savings

Generative AI can automate time-consuming and repetitive tasks, such as contract review, legal document drafting, and due diligence. By streamlining these processes, AI technology can significantly improve efficiency, reduce human error, and save costs for law firms and legal departments.

Document Analysis and Review

Generative AI models can analyze and review large volumes of legal documents, including contracts, court cases, and legal precedents. These models can extract relevant information, identify patterns, and provide insights, enhancing the efficiency of legal research and due diligence processes. This technology can help lawyers quickly identify relevant cases, precedents, and legal arguments, improving the quality and speed of their work.

Restraining Factors

Regulatory and Legal Challenges

The legal industry is highly regulated, and the use of generative AI raises concerns regarding data privacy, confidentiality, and compliance with legal and ethical standards. Adapting existing regulations to accommodate the use of generative AI in law can be complex and time-consuming. Regulatory uncertainties and potential legal challenges can slow down the widespread adoption of generative AI in the legal sector.

Cost and Implementation Challenges

Implementing generative AI systems in the legal sector can be costly and require significant investments in infrastructure, computational resources, and expertise. Law firms and legal departments may face financial constraints in adopting and integrating generative AI technology into their existing workflows. The costs associated with training, maintaining, and updating AI models and retraining legal professionals to use the technology effectively can act as a restraining factor for its widespread adoption.

COVID-19 Impact Analysis

Accelerated Digital Transformation

The pandemic accelerated digital transformation efforts across various industries, including the legal sector. Law firms and legal professionals realized the importance of adopting innovative technologies to adapt to the changing business landscape. Generative AI in law emerged as a solution that could automate repetitive tasks, enhance efficiency, and deliver legal services remotely, prompting increased investment and interest in the technology.

Budgetary Constraints

The economic downturn caused by the pandemic led to budgetary constraints for many law firms and legal departments. As a result, investments in new technologies, including generative AI, may have been deprioritized or delayed. Organizations had to carefully evaluate the cost-benefit ratio and allocate resources accordingly, which could have affected the pace of adoption and implementation of generative AI in law.

By Service Provider Analysis

The AI Technology Companies Segment Accounted for the Largest Revenue Share in Global Generative AI in Law Market in 2022.

Based on the service provider, the market is segmented into AI technology companies, legal technology startups, law firms with In-house AI capabilities, and AI consulting and implementation services. Among these, AI technology companies are expected to be the most lucrative in the global generative AI in law market.

AI technology companies specialize in developing and providing AI solutions, including generative AI, to various industries, including the legal sector. These companies invest heavily in research and development to create cutting-edge generative AI technologies tailored to legal applications. They often have dedicated teams focused on legal AI and collaborate with law firms and legal professionals to understand their needs and develop innovative solutions.

While AI technology companies play a significant role in driving advancements in generative AI for the legal market, their dominance may depend on factors such as the breadth of their product offerings, market reach, and competitiveness.

By Firm Size Analysis

The Large Law Firms Segment Accounted for the Largest Revenue Share in Global Generative AI in Law Market in 2022.

Based on firm size, the market is segmented into large law firms, mid-sized law firms, and small law firms & solo practitioners. Among these, Large Law Firms are expected to be the most lucrative in the global generative AI in law market.

Large law firms often have the financial resources and infrastructure to invest in advanced technologies, including generative AI. These firms typically have higher volumes of legal work, complex cases, and greater client demands, making them more inclined to adopt generative AI solutions.

Large law firms can leverage generative AI across various areas, such as document review, legal research, contract analysis, and predictive analytics. They often have dedicated teams or departments focused on technology adoption, allowing for quicker implementation and integration of generative AI systems.

By Deployment Model Analysis

The On-Premises Segment Accounted for the Largest Revenue Share in Global Generative AI in Law Market in 2022.

Based on the deployment model, the market for generative AI in law is segmented into on-premises and cloud-based. Among these, the on-premises segment is dominant in the deployment model segment in generative AI in the law market, with a market share of 59%.

On-premises deployment gives organizations full control over their data, which is crucial in the legal sector, where data privacy and client confidentiality are paramount. Organizations can implement robust security measures and ensure compliance with data protection regulations by keeping the data within their own premises.

By Application Analysis

The Document Review Segment Accounted for the Largest Revenue Share in Global Generative AI in Law Market in 2022.

Based on application, the market is segmented into document review, legal research, contract analysis, prediction of legal outcomes, and other applications. Among these applications, the document review is expected to be the most lucrative in the global generative AI-in-law market. Generative AI has been widely adopted for document review tasks in the legal field.

These tasks involve analyzing and extracting relevant information from large volumes of legal documents, such as contracts, court cases, and legal precedents. By automating document review, generative AI improves efficiency and accuracy, enabling legal professionals to streamline their workflows and focus on higher-value tasks.

Key Market Segments

Based on the Service Provider

• AI Technology Companies
• Legal Technology Startups
• Law Firms with In-house AI Capabilities
• AI Consulting and Implementation Services

Based on Firm Size

• Large Law Firms
• Mid-Sized Law Firms
• Small Law Firms and Solo Practitioners

Based on the Deployment Model

• On-premise
• Cloud

Based on Application

• Document Review
• Legal Research
• Contract Analysis
• Prediction of Legal Outcomes
• Other Applications

Growth Opportunity

Automation of Legal Processes

Generative AI can automate time-consuming and repetitive legal tasks like document review, contract analysis, and legal research. This automation can significantly improve efficiency, reduce manual errors, and free up valuable time for legal professionals to focus on higher-value activities. The ability to automate these processes offers substantial growth potential for generative AI in the legal sector.

Ethical and Fair Use of AI in Law

The growth of generative AI in law is closely tied to addressing ethical concerns and ensuring fairness and transparency in AI systems. As technology evolves, there will be a need for ethical guidelines, regulations, and best practices to guide the responsible use of generative AI in the legal sector. Developing frameworks that address bias, privacy, explainability, and accountability can foster trust and drive the sustainable growth of generative AI in law.

Latest Trends

Cloud-Based Solutions and APIs

Cloud-based generative AI platforms and APIs are becoming more accessible and user-friendly. These platforms provide pre-trained models and tools that can be easily integrated into legal workflows, allowing legal professionals to leverage generative AI capabilities without extensive technical expertise. Cloud-based solutions offer scalability, cost-efficiency, and accessibility, enabling wider adoption of generative AI in the legal industry.

Privacy-Preserving Generative AI

Data privacy is a critical consideration in the law. Privacy-preserving generative AI techniques are gaining attention to ensure that sensitive legal information remains confidential while leveraging AI capabilities. Technologies such as federated learning and secure multi-party computation allow generative AI models to be trained on distributed data without sharing the raw data, enhancing privacy and confidentiality in legal AI applications.

Regional Analysis

North America Accounted for the Largest Revenue Share in Generative AI in Law Market in 2022.

North America is dominating the market for global generative AI in law. The region has a robust legal industry, a thriving tech ecosystem, and a favorable regulatory environment for AI. Many large law firms, legal technology startups, and AI technology companies are based in the United States, driving innovation and advancements in generative AI for legal applications.

The region also hosts prestigious AI research institutions and hosts leading AI conferences, fostering collaboration and knowledge exchange. Europe is witnessing significant growth in generative AI adoption in law, driven by countries such as the United Kingdom, Germany, and France. The European legal industry is known for its emphasis on privacy, data protection, and ethical considerations.

The region has implemented regulations like the General Data Protection Regulation (GDPR), which influence the development and use of generative AI systems. European legal technology startups and research institutions are actively exploring generative AI applications in legal research, contract analysis, and compliance.

Key Regions

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Key Players Analysis

Generative AI in law is a rapidly evolving field with various players and emerging startups offering innovative solutions. Some of the key factors that may influence market share in the generative AI in law market include the capabilities and performance of the solutions offered, customer satisfaction, partnerships and collaborations with law firms or legal technology companies, pricing models, and the ability to adapt to evolving legal requirements and regulations.

Market Key Players

• IBM Corporation
• Open Text Corporation
• Thomson Reuters Corporation
• Veritone Inc.
• ROSS Intelligence Inc.
• Luminance Technology Ltd.
• LexisNexis Group Inc.
• Neota Logic Inc.
• Kira Inc.
• Casetext Inc.
• Other Market Players

Recent Development

• In 2021, AI startup Casetext has raised USD 68 million in funding from VCs which are interested in applications of generative AI in law.
• In March 2023, Thomson Reuters introduced Westlaw Edge, a legal research platform using artificial intelligence (AI) to create interactive visualizations of legal data. Users can utilize Westlaw Edge to explore complex legal concepts or identify patterns within legal data.
• In April 2023, OpenText Corporation announced it has acquired Luminance, a provider of AI contract review software. Their generative AI can automatically identify and flag potential risks within contracts.
• In May 2023, IBM Corporation recently unveiled their Watson Legal Assistant, an artificial intelligence (AI) tool used for creating legal documents such as contracts, wills, and trusts. This AI tool can assist legal practitioners by helping to draft these legal documents quickly and accurately.

Report Scope