Investment in UK legal tech rose to record levels in 2025, with backing for companies specialising in artificial intelligence (AI) “surging”, according to figures published today by LawtechUK.
The newly published figures from the Ministry of Justice backed initiative, which provides funding and incubation for law tech start-ups, suggest a 35% increase in legal technology companies, to the tune of £188.8 million. Against a backdrop of market nerves in AI, the numbers suggest growing confidence in the technology’s use in legal services, Christina Blacklaws, chair of LawtechUK’s advisory panel, said.
“Throughout 2025, investors were quietly reaching their own verdict,” she explained.
“The companies that attracted capital were building the specialist knowledge, structured data and professional oversight that any AI system needs to work reliably in legal practice. When a generic AI platform enters the market, the demand for tools that can make it work safely and reliably doesn’t diminish; it grows.”
Research from LexisNexis indicates the proportion of UK lawyers using AI at work has risen from around one in ten in 2023 to 61% today. The same research also notes fewer than one in five respondents said AI is “fully embedded” in their firm’s strategy and operations.
Document management and interrogate, contracts and risk management dominated investment in both halves of the year, LawtechUK said, accounting for 30% and 25% of overall investment in the second half the year respectively.
Investors are consistently backing tools that address the day-to-day realities of legal practice, the company added, rather than chasing the next AI breakthrough. The sentiment was shared in separate research which showed more than half of respondents to a recent survey said they use AI tools to produce legal work faster, with junior lawyers saying they are increasingly using AI for tasks including legal research, first drafts and document review.
LawtechUK was founded in 2023 and is currently operated by Legal Geek. To date it has directly supported more than 176 startups and in 2025 the incubator saw 19 firms amongst its community raise £35.07 million in funding; an average of nearly £2 million per round, representing around 20% of total law tech funding. Female-founded companies represented 35% of those raising funds in the second half of 2025, rising from 17% across the whole of 2024.
The results show a real appetite for technology which doesn’t seek to replace the role of the lawyer, but rather augment it, said Beth Fellner, LawtechUK programme lead for Legal Geek. “The breadth of investment we are seeing, from Scotland to the Midlands, shows this is genuinely a nations and regions success story,” she explained.
“The final 2025 figures confirm what serious investors understood throughout the year, that the real opportunity in legal tech lies not in replacing legal expertise but in supporting it. The companies attracting capital are those that combine AI capabilities with specialist knowledge and the professional oversight that clients and courts rightly expect.”
