After Legal Tech New York in early February, it is easy to forget that legal software includes more than eDiscovery. Today, enterprise legal management software provider Mitratech provides a good reminder.

Mitratech’s  just-published “Catching the Wave” report sizes the market for legal tech (excluding e-discovery). The survey covers legal software categories that both law firms and law departments use. To reach its findings, the company surveyed law firm and law departments, interviewed a dozen-plus industry experts, and reviewed secondary research.

I report here on some key findings and add my own editorial gloss.

Total Law Department Spend and Potential SpendThe survey finds that corporate law departments spend $1.5B annually on legal software today but that the addressable market is $6.5B. I am perfectly willing to believe that only about 25% have the software that they should. That is consistent with many a story I have heard over the years. Large law departments demanding Big Law efficiency have a great case to make. And they should make sure their own houses are in order.

Total Law Firm Spend and Potential Spend. Law firms also spend $1.5B annually on legal software, with an addressable market of $9.4B. I would have guessed that firms spend far more than law departments. I may be overly influenced by my experience with Big Law, which, by and large, seem buy almost all the software they need. I can see how that would not be true for other law firms.

Surprises in the Law Department Spend by Category. The survey goes deeper, providing spending detail on 11 categories of software, by size of department. I found several surprises here:

  • Lower Than I Expected: E-billing. Only 80% of large (40+ attorney) law departments have e-billing software. Some 15 years after its advent, I thought it would be nearly universally adopted. What explains the 20% that don’t have it?
  • Higher Than I Expected: CMS, KM, and LPM: Three categories clock higher penetrations than I expected:
    • Penetration of Software by Size of Law Department (%) Forecasted Growth
      (2015-19 CAGR, %)
      (40+ attorneys)
      (10-39 attorneys)
      Contract management software (CMS) 42 17 17
      Knowledge management (KM) software 35 22 18
      Legal project management (LPM) software 51 24 27
    • What the table does not show is that the growth rates of these three categories are 3 of the 4 fastest growing ones.
    • From my work, networking, and reading, the penetration in all three is much higher than I would have guessed. Some categories of software are far more widely licensed than used. If so, that would explain my surprise.
    • The high growth forecasted growth rates are not surprising since all three are much discussed at conferences and in media.


Implications and Conclusions. Having these data, which I do not recall seeing previously, helps us understand the market. For software vendors, it indicates where the opportunity lies. For law practice managers – at firms or departments – it indicates where the action lies. For law departments lagging the market, it can provide benchmarking to justify adequate investment.