Legal tech companies raised about $1.83 billion in the first quarter, up from about $1 billion in the same period last year, according to a Law360 Pulse analysis of readily available public data, including prior Law360 coverage, company statements, U.S. Securities and Exchange Commission filings, social media posts from companies or their leaders and reports from Crunchbase and other trade publications.
This also represents the most money raised in any first quarter going back to 2021.
By comparison, Crunchbase News reported that all global venture capital funding increased by about 17% year-over-year in the first quarter.
"The momentum in legal tech will continue as the sector is vast, and the needs are broad, diversified and largely unmet," Zent said. "As someone who has been engaged in this space for decades, it's exciting to see the future of the industry being written in real time, based on the intersection of capital and innovation."
Legal tech funding deals totaled 61 during the first quarter, down slightly from 66 last year. There were nine capital raises in legal tech this year that did not disclose their funding totals. In the first quarter of 2024, there were 20 such capital raises.
A big reason for the higher funding total in 2025's first quarter is that five later-stage startups raised mega investments in Series C, Series D and in the secondary market. These mega capital raises totaled $750 million. There were no such late-stage funding rounds in last year's first quarter.
The number of early-stage pre-seed and seed rounds nearly equaled those during the same period in 2024.
Debt financing in the first quarter hit $575.5 million, down from about $678 million last year.
Since 2021, most increases in funding have occurred during a decrease in consolidation among legal tech companies due to the abundance of venture capital. That wasn't the case in the first quarter, as funding and consolidation grew. The number of mergers and acquisitions in the quarter was 45, up slightly from 41 last year.
Deep Dive
Legal information providers were the category with the most funding in the quarter, thanks entirely to the €500 million ($544 million) Eurobond for Wolters Kluwer.
Governance, risk and compliance software companies that serve legal professionals raised about $370 million in the first quarter. That included a $300 million secondary market transaction for human resources platform Deel and a $48 million investment for legal and compliance platform Norm Ai.
Legal artificial intelligence assistants had another surging quarter of investments, with about $322 million in funding. Leading the way was the startup Harvey, which raised a $300 million Series D and reached a valuation of $3 billion.
Contract software companies secured about $172 million in the first quarter. That included a $75 million Series C for Luminance and a $54 million Series B for SpotDraft.
Startups with tools designed for in-house legal operations raised about $167 million in the quarter. Eudia, an AI platform for in-house legal teams, led the group with a $105 million Series A funding round.
Plaintiff law firm tool Eve added a $47 million Series A deal during the quarter.
The category of access to justice was also a top recipient of funding, thanks to the $45 million Series A round for the justice technology company JustPoint.
Other top categories that received funding in the quarter included patent platforms, financial legal services, estate planning, data management and practice management.
Across the globe, the United States was the top country in the period, with legal tech companies raising about $1 billion. Companies in the Netherlands, the U.K., India, Spain, France, Singapore and Canada also raised funds.
Who's Calling The Shots?
Over 150 investors backed legal tech companies in the first quarter of 2025. Five investors backed multiple companies in the period: Y Combinator, General Catalyst, Fuel Ventures, Sequoia Capital and The LegalTech Fund.
Among the 45 mergers and acquisitions in the quarter, three companies made multiple deals: court reporting company Veritext, legal networking organization L Suite and language solutions provider TransPerfect.
Litigation support and service providers acquired four companies in the quarter, while e-discovery and contract software companies each made two acquisitions. Three case management companies were acquired or merged in the quarter.
There were two instances of law firms acquiring tech organizations. Boutique law firm ZwillGen PLLC acquired lawyers, data scientists and technology from Luminos.Law LLP. In BigLaw, Cleary Gottlieb Steen & Hamilton LLP acquired the generative AI developer Springbok AI.
"I believe we are going to see more activity like this as law firms use AI technology to shore up internal workflows as well as using AI functions to extend their reach with clients and customers," Edward Bukstel, CEO of the legal tech company Giupedi, told Law360 Pulse. "Buying the actual legal technology allows the law firms to monetize the fact that AIs tend to get smarter with use."
Bukstel said law firms will also create goodwill for potential clients by offering AI features.
Methodology: Law360 Pulse surveyed public documents dated Jan. 1, 2025, to Mar. 31, 2025, including company statements, U.S. Securities and Exchange Commission filings, social media posts from companies or their leaders, Crunchbase data, and reports from other trade publications. Deal dates are logged by the date of the announcement or SEC filing date.
--Additional reporting by Matt Perez. Editing by Marygrace Anderson and Drashti Mehta.
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