"There was nothing typical about the past year. The only constant was change. Legal technology announcements rolled out nonstop, making it nearly impossible to stay on top of all the updates. Investment from venture capital and private equity firms was record-breaking. Artificial intelligence advanced faster than any of the technologies that preceded it, and the number of new legal tech AI startups launched in 2025 was so high that it felt like a game of whack-a-mole."
"Others continued the trend of phasing out server-based offerings in favor of cloud-based platforms. Meanwhile, law students, frustrated by their school's lack of AI guidance, took matters into their own hands. Ethics committees issued updated AI guidance, individual judges crafted specific rules for technology use in their courtrooms, and AI tools continued to hallucinate, to the consternation of judges and lawyers alike. All the while, a profession far more comfortable with tradition and precedent than constant change struggled to keep up."
"Year over year, investment in the legal technology space has grown exponentially. Last year's largest funding round, Harvey's $100 million, was dwarfed by multiple large investments in 2025. Once again, Harvey led the way, raising a total of $760 million across three funding rounds, the most recent of which was a $160 million Series F announced earlier this month. Other notable investments included Clio's $500 million raise in November; Filevine's $400 million in September; and EvenUp's $150 million Series E round in November."
Legal technology experienced nonstop product announcements, rapid AI advancement, and record investment, with major funding rounds and acquisitions accelerating AI capabilities. Trusted companies rolled generative AI features into products while others shifted from server-based to cloud platforms. Law students created their own AI guidance amid insufficient institutional direction. Ethics committees updated AI guidance and individual judges established courtroom technology rules. AI tools continued to produce hallucinations, creating concern among judges and lawyers. The profession, grounded in tradition and precedent, faced difficulty keeping pace with fast-changing technology, regulatory responses, and a surge of new legal-tech startups.
Read at ABA Journal
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