The legaltech shift
SÉRVULO IN THE PRESS 17 Sep 2025 in Iberian Lawyer
AI tools are already reshaping everyday legal practice as law firms and startup developers bring innovation to the ground The technological revolution has become a central concern in the legal sector. The question is no longer if artificial intelligence should be adopted, but when — and how fast. There's growing consensus that technology now plays a decisive role in the success or failure of a law firm. Tools that improve efficiency, reduce costs, automate tasks, and enable predictive analytics are driving the growth of the legaltech AI market, as firms respond to rising pressure for agile, data-driven solutions.
The global legaltech market was valued at USD 2.5 billion in 2024 and is forecast to reach USD 8.5 billion by 2031, according to Market Research Intellect. Fuelled by product innovation, cross-sector application, sustainability goals and growing investor interest, the market is led by North America (over 40% share) and Europe (30%), according to Cognitive Market Research.
After spending six months observing the daily work at Sérvulo & Associados, André Dionísio, co-founder and CEO of ByTheLaw, and his team identified internal knowledge management as a key bottleneck. The company developed, then, an AI-based system that automatically organises internal legal information, reducing time spent on non-billable admin. "Knowledge is the most valuable asset for law firms", says Dionísio.
ByTheLaw estimates its tool currently saves 63 hours per user annually — a number the company believes it can multiply by up to ten in the coming years.
Challenges and perspectives
Despite growing adoption, the legaltech sector can face structural challenges. Regulatory complexity — including uncertainty around the upcoming EU AI Act — is one concern. Others include, specifically in Portugal, rigid labour frameworks, tax issues, a limited talent pool, and a lack of clarity around the national regulatory environment. "Search engines and tools used in the public sector and courts are so outdated that professionals often end up using Google", observes Dionísio. He calls for more dialogue between law and engineering. "We need hybrid profiles -engineers who understand law, and lawyers who understand tech."
ByTheLaw is developing solutions adaptable to other legal systems and sees particular opportunity in Portuguese-speaking countries such as Brazil. The goal, says Dionísio, is to work with international partners to validate their tools locally. Despite the hurdles, the outlook is optimistic. As AI capabilities evolve and become more aligned with legal work, a new wave of innovation is expected to reshape the landscape across Southern Europe.