8+ Opportunities to Capitalize on The Legal Tech Boom

It takes a lot of apps to run a business these days. In 2023, the average company used 80 SaaS apps in their operations… talk about a tech STACK.

One category that’s having a growth spurt: Legal tools.

With 35% year-over-year customer growth and ~$30B in market size, legal tech is dominating the global workplace. Driving the trend are contract management apps like Ironclad, and legal jack-of-all-trades like LegalZoom.

And then AI entered the chat…

Source: Google Trends, six-month rolling average

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Notable money moves this year include Luminance’s $40m round and Robin AI’s $26m Series B raise.

If we broaden our definition of “legal tech” to include tools that help with any legal processes — filing, contracts, business formation, and compliance — the trend is even clearer.

Vanta, a data compliance software, had a whopping 338% YoY customer growth. Its competitor Drata also saw an impressive 90% YoY growth. Both are doing $100m+ in ARR.

These tools are in demand because they take care of the messy legal shenanigans that most business builders aren’t too keen to dive into.

Tapping into this need, there are still plenty of opportunities to build. Here are three ways you can approach it:

1. Think Small

Legal tech companies make a big chunk of their revenues from enterprise contracts. Good for them.

But small businesses and mom-and-pop shops need legal guidance, too. The problem? They don’t have a big tech budget.

So keep it simple by unbundling complex legal tech into smaller, budget-friendly products:

⭐️ Review site for legal apps: Compare prices, features, and help SMB owners find the most affordable options. Then you can charge extra for access to Loom video tutorials on how to get the most outta these tools, or upsell by connecting entrepreneurs with vetted lawyers and consulting services.

📑 Themed legal templates: Create pre-made templates like “tax season bundle,” “solopreneur bundle,” or “licensing bundle.” Every business has unique legal requirements, so put your templates into a database categorized by industry.

💬 Compliance reminders: Design a simple tool that sends out text reminders for important dates and policy updates, so business owners won’t miss a beat. Market it in a cute and friendly way to ease the anxiety around compliance.

2. Focus on Talent

Legal services jobs are at a near-record high, as law firms and businesses vie for talent.

But the wide adoption of AI in legal tech means that future legal professionals might look very different from today.

Source: Reuters

Opportunities to capitalize on this growing need for new talent:

• More students are applying to law schools in 2024, but it remains a costly path. Provide apps or services to help law students manage their credit, find loans with lower rates, or apply for scholarships.

• Create bootcamps and certification programs for legal tech specialists, a job category that grew 200% in demand this year. Focus on skills like modernizing law firm operations, compliance, or even fine-tuning large language models to perform legal tasks.

Source: Trends AI guide

3. Explore Other Niches

The LLC formation service market is a fast-growing subcategory in legal tech, with established players like LegalZoom making millions in revenue, and newer disruptors like Doola attracting fresh capital.

But why limit that technology to LLCs? You can take the “X in a box” idea and apply it to more niche use cases, such as:

• Helping lawyers establish their own practice for the first time, and zoom in on newer fields of law like IP, cannabis, or short-term vacation rentals;
• Helping baby boomers who need to transfer their wealth to offsprings figure out taxes;
• Helping immigrants and digital nomads who are in the process of applying for visas and/or citizenship in different countries (like GreenCard Hero).

In the next few years, we’ll see even faster adoption of legal tech, and more variations of it. The space is ripe for innovation, and the ball’s in your court.

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