Global Generative AI in Legal Market By Deployment Model (Cloud-based and On-premises), By Application (Document Review, Legal Research, and Other), By End-User (Law Firms, In-House Legal Department Corporation, and Other End-Users), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

Global Generative AI in legal Market size is expected to be worth around USD 675.1 Mn by 2032 from USD 49.8 Mn in 2022, growing at a CAGR of 30.7% during the forecast period from 2023 to 2032.

Request Covid - 19 Impact

In the field of legal, generative AI has the potential to have a significant impact on a number of areas, from research and document drafting to contract analysis and legal outcome prediction. Legal research and analysis is one of the main uses of generative AI in the legal industry. Massive legal documents, including legislation, regulations, case law, and legal articles, can be processed by AI-powered platforms to extract pertinent information and offer insights. This can save time and effort for legal experts, allowing them to concentrate more on analysis and strategy.

Legal document drafting can also be done using generative AI. By analyzing existing legal documents, AI systems can generate templates and suggestions for contracts, agreements, and other legal texts. This can streamline the drafting process, enhance consistency, and minimize errors. Furthermore, generative AI has the potential to assist in contract analysis and review. AI algorithms can analyze and extract key provisions, identify potential risks, and highlight anomalies or inconsistencies in contracts. This can help lawyers in due diligence processes, contract negotiations, and risk assessment.

Driving Factors

Growing Volume of Legal Industry Data

Massive amounts of data, such as statutes, contracts, rules, legal opinions, and case law,  are produced and handled by the legal sector. Legal professionals can gain insightful information and make informed judgments by using generative AI, which can handle and analyze this enormous amount of data more quickly and effectively than humans.

Growing Productivity and Advanced Data Analysis

Legal research, contract drafting, and document review are just a few of the repetitive and time-consuming operations in the legal industry that can be automated by generative AI. Lawyers can focus on higher-value work and increase productivity by automating these operations to save a lot of time and money. Massive volumes of legal data can be analyzed by generative AI algorithms, which can then draw out important conclusions that human analysts would miss. To help lawyers achieve deeper understanding and make wiser decisions, this involves seeing patterns, trends, and relationships within legal texts.

Scalability and Availability of Data

More work can be handled by AI technologies than by a human. This can be especially helpful in situations like e-discovery, when lawyers may need to examine a lot of electronic material. There is a tonne of information in the legal profession, including case law, statutes, legal opinions, and more. The legal sector is a strong prospect for the usage of AI since this data may be utilized to train AI systems.

Restraining Factors

Ethical and Legal Concerns

Concerns about morality and the law are brought up by generative AI, particularly in the context of accountability and responsibility. There are concerns about the openness, interpretability, and potential biases present in the training data, as well as the outcomes produced by AI. These ethical ramifications must be carefully considered by the legal profession, and AI system compliance must be guaranteed.

Data Security and Privacy

The legal industry handles extremely private and sensitive information. For the protection of client information, the attorney-client privilege, and to ensure confidentiality, the adoption of generative AI requires strong data privacy and security measures. To ensure trust and regulatory compliance, it is important to handle the risks related to data breaches and unauthorized access to AI systems.

COVID-19 Impact Analysis

The legal industry has had a larger demand for digital collaboration solutions as social seclusion strategies and distant work has been the norm during the pandemic. As lawyers look for ways to work productively from various locations, the need for generative AI solutions that enable remote collaboration has skyrocketed. Examples include virtual document collaboration platforms and AI-powered research tools. Especially in areas like contract violations, employment conflicts, and bankruptcy, the pandemic has led to an increase in litigation and disputes.

This has increased demand for generative AI-powered e-discovery solutions and legal analytics tools. With the use of these technologies, it is possible to quickly sort through massive amounts of electronic data, find pertinent information, and gain insights that can be used for case analysis and strategy building.

The epidemic has sped up efforts at digital transformation in a variety of sectors, including the legal one. Legal departments and firms are being forced to adopt digital technologies in order to maintain company continuity and accommodate remote working.

Tools for generative AI have been sought after as part of this journey toward digital transformation because they have the ability to automate processes, improve productivity, and streamline workflows. When deploying generative AI solutions in the legal sector, compliance frameworks like data protection legislation, industry-specific rules, and ethical principles should be taken into account.

By Deployment Model Analysis

The on-premises Segment Accounted for the Largest Revenue Share in Generative AI in Legal Market in 2022.

Based on the deployment model, the market for generative ai in legal 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 legal market, with a market share of 57%.

The use of generative AI in legal situations must adhere to all applicable laws and rules governing data privacy, intellectual property rights, and ethical issues. This is vital to keep in mind. For instance, if the AI system creates legal papers, they must follow legal requirements and be approved by legal professionals.

Additional data security, data storage, and regulatory compliance issues might arise as a result of this. It is advised for businesses to speak with legal professionals who focus on AI and keep up with the changing legal environment related to AI technology to maintain compliance.

By Application Analysis

The Document Review Segment Holds a Significant Share of the Application Segment in the Generative AI in Legal Market.

Based on application, the market is divided into document review, legal research, contract analysis, prediction of legal outcomes, and others. Among these, the document review segment is dominant in the application segment in generative ai in legal market, with a market share of 32%.

Legal documents like contracts, agreements, and legal briefs can all be generated automatically using generative artificial intelligence. The AI model may produce draughts and templates that legal experts can review and modify by being trained on current documents and legal terminology. By examining a sizable amount of case law, statutes, and legal documents, generative AI can help in legal research.

To assist legal professionals in their case analysis and decision-making processes, it can be used to extract pertinent information, spot patterns, and provide summaries or recommendations. Legal outcomes, such as case outcomes, settlement sums, or the possibility of winning a lawsuit, can be predicted using generative AI. The AI model can offer insights to assist in decision-making and strategy formulation by analyzing previous data and patterns.

 By End-User Analysis

Law Firms Hold a Significant Share in the End-User Segment of Generative AI in Legal Market.

Based on end-user, the market is divided into law firms, in-house legal department corporations, government legal departments, and others. Among these, the law firms segment dominates the market with a revenue share of 37% in the forecasted period.

To improve customer services, increase productivity, and streamline operations, law firms can embrace generative AI technologies. Law companies can spend less time, money, and resources overall by automating routine processes like document generation and contract review. In-house legal departments within organizations can profit from generative AI.

They can use it to manage contracts, handle legal paperwork, carry out compliance duties, and offer legal advice to other organizational departments. This makes it possible for internal legal departments to manage their workloads more skillfully and successfully.

Generative AI systems that aid in legal research and analysis can be useful to researchers, law librarians, and paralegals. They can use these technologies to complement their research efforts by gathering pertinent data, summarizing legal papers, and spotting trends and precedents.

Generative AI in Legal Market Segments

Based on Deployment Model

• Cloud-based
• On-premises

Based on Application

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

Based on End-User

• Law Firms
• In-House Legal Department Corporation
• Government Legal Departments
• Other End-Users

Growth Opportunity

Contract Drafting, Analysis and Review

The process of drafting contracts can be automated and streamlined using generative AI. To create customized draughts, AI-powered technologies can analyze pre-existing contracts and legal templates, which helps to reduce errors and inconsistencies. Additionally, by identifying potential risks, ambiguities, and non-compliance issues, these technologies may evaluate and analyze contracts.

This improves accuracy, efficiency, and the standard of contract documents. The review of legal documents, including due diligence and discovery procedures, can be aided by generative AI. AI algorithms can analyze documents, find pertinent data, and classify them according to their substance, relevance, and importance. This can considerably shorten the time it takes to evaluate documents, save money, and increase the precision with which important information is identified.

Regulatory Compliance and Risk Management

Legal practitioners can benefit from the use of generative AI to monitor and ensure adherence to intricate and changing legislation. Platforms with AI capabilities can monitor legislative changes, assess their effects, and offer advice on necessary compliance measures. This aids organizations and legal departments in managing risks, avoiding legal hazards, and remaining current with evolving legal requirements.

Latest Trends

Automated Contract Analysis and Generation:

Automating contract analysis and generation is one of the most often used applications of generative AI in the legal industry. In a fraction of the time it would take a human, AI systems can examine existing contracts for compliance, potential risks, and more. Additionally, based on a set of input criteria, they can build new contracts.

Legal Research Automation and Predictive Analytics

Legal research is rapidly being automated with the use of AI. This entails parsing legal texts and cases using natural language processing (NLP) tools to uncover pertinent precedents and summarise findings. The results of legal cases can likewise be predicted using generative AI using historical data. This could help lawyers to build a stronger case or advise their clients on the likely outcomes.

Regional Analysis

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

North America is the leading region in the global generative AI in legal market. Owing to the presence of top research institutes and technical enterprises, North America has been at the forefront of technological innovation. Modern AI technologies, such as generative AI, can be developed in this setting and then used in the legal field. Because of the scale and complexity of the legal market in this region, there is a need and opportunity for AI-powered solutions that can improve client services by streamlining procedures and boosting efficiency.

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

Market Share & Key Players Analysis

The market for generative AI in legal is highly competitive, with a few established players and new entrants competing for market share. These players offer a range of AI & machine learning solutions that can be used to enhance the efficiency of legal processes and provide a better customer experience. For Example, IBM Corporation is one of the leading players in the market for generative AI in legal, with a significant market share.

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 Developments

• In September 2021, Adobe MAX disclosed its strategy for creating creator-centric Generative AI products adopting the principles of the Content Authenticity Initiative and investing in fresh research to enable creatives' ownership over their look and work. This revolutionary technology is thought to hasten the process by which artists generate ideas and pursue original ideas.

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