First came fintech. Now it’s the turn of lawtech. Balderton Capital’s Sivesh Sukumar has declared that this is no longer “a notoriously unexciting category” and it’s time “to take legal tech seriously”. Although the raw ingredients for success have always been there — the City, Britain’s legal expertise, where it ranks second globally and the UK’s leading position in artificial intelligence, where it ranks third — it is the acceleration of generative AI that has really moved the dial.

Rowena Rix, head of innovation and AI for Dentons UK, Ireland and Middle East, who monitors the market, says she has seen more legal tech M&A activity in the past six months than in the previous 20 years.

The law has always felt ripe for automation and many have tried, with mixed success. Until now, the challenge has been that reams of text and unstructured data are not easy to manipulate, compared with fintech where you are dealing with numbers that fit more neatly into a spreadsheet. Yet the surge in the capabilities of large language models, which power generative AI, are perfect for understanding and searching legal tomes.

The legal sector feels like it is finally being shaken up in the way banking has been over the past decade. There have been a number of significant investments made in British companies using technology to revolutionise the profession. At the height of the funding frenzy in 2021, 39 British legal tech companies raised £179.1 million. According to PitchBook, the capital market database, so far this year 13 have raised £100.5 million.

Rix sees a trend of Big Tech putting money into the sector, such as into Definely, backed by Microsoft and Google, a legal tech company that raised $7 million led by Octopus Ventures in May. Delivered as a Microsoft Word plugin, it claims to save lawyers up to 45 minutes a day, helping them draft and proofread documents more quickly. Lawhive raised $12 million in April, led by Google Ventures. It has created an AI lawyer, Lawrence, which the company says passed the Solicitors Qualifying Examination with a score of 74 per cent.

Talent from the City’s top firms has played a significant role, as a generation of smart lawyers has emerged questioning the status quo. Tim Follett, 40, a former Slaughter and May lawyer, founded StructureFlow, which raised $6 million in May. He said his cohort looked around and wanted to fix “archaic ways of working, things that hadn’t changed for decades, lots of manual and repetitive work, late nights and high stress”. He said: “We realised that the solutions needed to be ‘home grown’ and people like us — who were passionate and cared about the profession — had an opportunity to take matters into our own hands.”

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RobinAI perfectly exemplifies the UK’s melting pot of expertise. It was co-founded in London by Richard Robinson, 34, a Clifford Chance lawyer, and Dr James Clough, 33, an expert in machine learning and AI formerly at Imperial College London. The business uses generative AI to draft and negotiate contracts and search for information.

Clough said the interest in legal tech had gone from “nought to 100” in the past few months: “Suddenly you have unlocked the ability to automate legal work and now everyone is scrambling to catch this low-hanging fruit.” The company raised $26 million in January, led by Temasek, Singapore’s state-owned investor.

The law firms themselves are putting money behind individual ventures and running accelerator programmes such as Slaughter and May’s Collaborate and A&O Shearman’s Fuse. They are also investing in chatbots for their work, most notably Harvey.

Government numbers show that of the 356 legal tech companies operating in Britain, 254 are UK-founded and they have secured investment of more than £1.38 billion.

The elephant in the room, as more work gets automated, is will it sound the death knell for the traditional model of billing clients in six-minute chunks? One senior lawyer said “billable hours” were already starting to be phased out and, at this rate, could be dead in months rather than years.