Generative AI in Legal Market to Expand at a CAGR of 30.7%, Driven by Demand for Automation


North America leads the global generative AI in legal market, capturing a substantial 35% market share. The region’s technological advancements, lead by prominent research institutions and technology giants, position it as a hub for developing state-of-the-art AI technologies for the legal industry.

New York, June 13, 2023 (GLOBE NEWSWIRE) — According to MarketResearch.Biz, the Generative AI in Legal Market size is projected to surpass around USD 675.1 Million by 2032, and it is poised to reach a CAGR of 30.7% from 2023 to 2032. The global generative AI in legal market accounted for USD 49.8 Million in 2022.

In the realm of law, generative AI has the potential to have a substantial impact on a variety of fields, from contract analysis and legal outcome prediction to research and document drafting. One of the key applications of generative AI in legal sector is legal research and analysis. AI-powered platforms can process huge legal texts, including statutes, rules, case law, and legal articles, to extract relevant data and provide insights. For legal professionals, this can result in time and effort savings, allowing them to focus 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.


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Key Takeaway

  • By deployment model, the on-premises segment has dominated the market, accounting for the most prominent global revenue of 57% in 2022.
  • By application, the document review segment has dominated the market, accounting for the most prominent global revenue of 32% in 2022.
  • By end-user, the law firms segment generated the largest revenue share of 37% in 2022.
  • In 2022, North America dominated the market with the highest revenue share of 35%.
  • The Asia Pacific region is expected to grow at a significant CAGR from 2023 to 2032.

Factors Affecting the Growth of the Generative AI in Legal Market

  • Technological Advancement: Advances in generative AI technology, such as machine learning algorithms and natural language processing (NLP) models, support the industry expansion. These technologies become increasingly valuable for legal applications as their accuracy, effectiveness, and capacities increase, spurring acceptance and market expansion.
  • Increasing Demand for Automation: To improve efficiency, save costs, and streamline operations, the legal sector is embracing automation. The ability of generative AI to automate processes like legal document generation, contract analysis, and legal research will help legal practitioners save time and resources, which will raise demand for generative AI solutions.

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Top Trends

Regenerative AI applications in the legal market have witnessed several notable trends over the past year. Natural Language Processing (NLP) algorithms have become more sophisticated, enabling AI systems to understand and interpret legal texts such as statutes, case law decisions and contracts with ease. This development enables more accurate analysis and efficient retrieval of legal information. Another trend involves AI tools designed to facilitate legal writing such as contract drafting or brief generation. These tools not only save time but also improve document quality and consistency. Furthermore, AI-powered dispute resolution platforms offer efficient and cost-effective alternatives to traditional litigation.

Market Growth

Generative AI usage in the legal sector has demonstrated substantial development potential. The ability of generative AI technologies to automate and enhance many legal processes is becoming more widely acknowledged, leading to increased efficiency, accuracy, and cost savings. 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.

Regional Analysis

With a market share of 35%, North America is the industry leader for generative AI in the legal sector globally. North America has been at the forefront of technology innovation due to the presence of leading research institutions and technology businesses. This environment can be used to build contemporary AI technologies that can later be applied to the legal sector, such as generative AI. There is a demand and opportunity for AI-powered solutions that can enhance client services by streamlining processes and increasing efficiency due to the size and complexity of the legal sector in this region.

Competitive Landscape

There are a few well-established competitors and recent newcomers vying for market share in the extremely competitive market for generative AI in the legal sector. These firms provide a variety of AI and ML solutions that can be used to improve the effectiveness of legal procedures and the consumer experience. For instance, with a sizable market share, IBM Corporation is one of the industry’s top players in the field of generative AI in law.

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Scope of the Report

Report Attribute Details
Market Value (2022) US$ 49.8 Mn
Market Size (2032) US$ 675.1 Mn
CAGR (from 2023 to 2032) 30.7%
North America Revenue Share 35%
Historic Period 2016 to 2022
Base Year 2022
Forecast Year 2023 to 2032

Market Drivers

One of the most popular uses of generative AI in the legal sector is automating contract analysis and generation. AI systems can analyze current contracts for compliance, potential dangers, and more in a fraction of the time it would take a human. Additionally, users can create new contracts using a set of input criteria. With the use of AI, legal research is being mechanized quickly. To discover relevant precedents and summarise conclusions, this includes parsing legal documents and cases using natural language processing (NLP) technologies. The outcomes of legal proceedings can also be anticipated using generative AI and past data. This can aid solicitors in making a stronger argument or in advising clients about likely outcomes.

Market Restraints

Generative AI presents many potential benefits in legal markets; however, its use must still comply with ethical and regulatory considerations when used as part of legal processes. Particularly concerning are ethical considerations related to using AI for legal processes that raises questions over accountability and transparency with AI-generated outcomes which may have an effect on legal proceedings. Furthermore, strict confidentiality requirements within legal fields raises privacy/security issues when implementing generative AI systems, necessitating careful consideration when developing these systems as well as robust safeguards to ensure their adherence with legal/ethical standards when using AI technologies in legal processes.

Market Opportunities

Generative AI presents many opportunities in the legal market. Automating routine tasks such as document review, contract analysis and legal research can significantly increase efficiency while simultaneously cutting costs for law firms and legal departments. AI chatbots can also be leveraged to quickly provide answers to frequently asked questions while freeing up human resources for more complex matters. Furthermore, predictive generative AI provides invaluable assistance with legal strategy development and risk assessments allowing legal professionals to focus on high-value tasks, increasing productivity while simultaneously increasing client satisfaction.

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Report Segmentation

Deployment Model Insight

With a market share of 57%, the on-premises sector dominates the generative artificial intelligence deployment model segment in the legal industry. Legal applications of generative AI must abide by all relevant laws and regulations controlling data privacy, intellectual property rights, and moral principles. It’s important to remember this. For instance, if an AI system produces legal documents, the documents must adhere to legal standards and be certified for use by legal practitioners. This could lead to additional problems with data security, data storage, and regulatory compliance.

Application Insight

With a 32% market share, the document review category leads the generative artificial intelligence in the legal market. Using generative AI in legal documents including contracts, agreements, and legal briefs can all be produced automatically. By being trained on contemporary papers and legal jargon, the AI model may generate draughts and templates that legal experts may review and alter.

End-User Insight

With a revenue share of 37% over the anticipated period, this segment of the market is dominated by law firms. Law companies can use generative AI technologies to enhance client services, boost productivity, and streamline processes. By automating typical tasks like document generation and contract review, law firms can save time, money, and resources overall.

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Market Segmentation

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

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

  • 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 of the Generative AI in legal Market

  • 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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