While over a billion dollars in private equity was raised by legal tech companies in 2021, it’s still a fairly small sector compared to the broader tech market, which private equity firms have publicly backed with over $401.7 billion in 2021 alone. Still, that isn’t stopping interested investors from funding the legal tech market.

However, legal tech companies’ limited scope can narrow their ability to raise outside funds, noted Hector Guinness, a member of private equity firm Hg Capital’s New York team. “Not all investors are happy with a very focused strategy,” he said.