Law firms are purchasing even more products and platforms to help their attorneys manage cases, keep track of time and stay sharp, according to the market research firm Outsell.
The total market for “legal and regulatory solutions” grew 3.8 percent to hit $21.2 billion in 2014, the latest statistics compiled by Outsell. It includes all products and platforms that lawyers purchase, including tools for legal research, news, workflow, practice management and book publishing but not including eDiscovery. Its estimates are created by analysts who look at public information and also contact companies for more information.
“I think it’s been a year where legal information providers and legal solution providers have seen the benefit of the last five years of investing in new tools and new technologies and that is now is coming into fruition,” said Hugh Logue, a U.K.-based analyst for Outsell who focuses on the legal market.
In one example, AppFolio, parent company of the cloud-based case management software MyCase held an intial public offering on the Nasdaq in June, starting at $12.15, and was trading at $17.58 as of Thursday morning.
Overall, the $21.2 billion legal solutions’ market represent a sliver of the $766.5 billion market for information, but it is predicted to grow at a rate of 5.7 percent between 2015 and 2018 and eventually reach $26.1 billion in 2018.
To create its estimate, Outsell has dozens of analysts who create a database with revenue estimates for thousands of companies based on publicly available information. It also contacts companies for information.
There are also new technologies being developed by companies that could have unknown impacts on the market. The Canadian start up ROSS Intelligence is using IBM’s Watson technology to create a legal research tool that has greater artificial intelligence capacity than existing tools but it has not yet been released. It could make lawyers more efficient and depress some of the market size or drive additional growth, Logue said.
The report notes that continued legal education training is declining in the U.S. and U.K. markets, but it is actually increasing in France and Sweden and other countries such as Singapore. This means that there are new programs, equivalent to the mandatory CLE programs in the U.S., which provide entry points for companies to market their products to lawyers in those regions.
Looking regionally, between 2012 to 2014, spending in the Asia-Pacific region grew the fastest at 5.7 percent, signalling the growing legal sector in this part of the world. Europe, the Middle East and Africa grew at 3.4 percent and the U.S. grew at 3 percent.
However, the U.S. still accounted for the largest slice of the overall market, where $9.5 billion was spent in 2014 on legal and regulatory solutions. The EMEA accounted for 36 percent of the market, and Asia Pacific had 12 percent.