I spent quite some time researching and talking to different lawyers and legal firms to explore the problems faced by law firms. After few months into the research, I was able to get a good idea on the current scenario of the legal tech industry. In order to aid people who might be inclined towards the field, I decided to jot down my conclusions and research. I would advise the reader to bear in mind that this research is focused purely on the legal tech side, with a special emphasis on the Indian ecosystem.
I you google, you are bound to find many existing startups in the legal tech field, however I would still go out on a limb to say that as of 2019 the field is not yet saturated, there is a lot of scope to gain a monopoly or capture the market in both the b2b and b2c market.
The legal tech field is mainly divided in the following categories:-
- Document Automation
- Practice Management
- Legal Research
- Legal Education
I will go through each of the categories in detail and provide examples of some of the best startups working in that particular field along with their funding and LinkedIn pages wherever possible.
Startups that help connect the customers with the legal firms or practitioners fall into this category. This is one of the most prominent fields with a lot of small and medium sized startups working towards their individual solutions. The B2C framework helps match the customer with the relevant legal firm.
Each lawyer needs to make a profile on the website/app and the startups take a percentage of the fee after a customer has successfully purchased the services of the lawyer. Few of the startups in this field use review based systems to help increase the credibility of the lawyer.
The startups in this category serve to both customers and firms mainly comprising of small businesses and startups.
LegalRaasta: Founded in 2015, the startup helps startups and small business owners to solve problems pertaining to legal compliance. The startup raised $1 million in angel funding.
VakilSearch : This startup caters to both individuals and businesses for their respective legal requirements. After winning the Ritz Entrepreneurship award in 2015, Vakilsearch has drawn investors’ attention and has raised Rs`16 crore in funding — Rs. 6 crore in February 2015 from Kalaari Capital and Rs.11 crore in March 2016 from Kalaari and Dr Agarwal’s Group.
Lawyered : Taking an interesting approach to connect people with lawyers ‘relevant’ to their needs, Lawyered was founded in 2015. They provide cost effective, high quality and accessible solutions. The customers also get free proposals and advice for their requirements from various firms and lawyers.
Few startups are working to automate the tasks that lawyers face on a daily basis: such as document reviewing, updating documents and contracts, and defining templates for various types of contracts etc. Majority of the legal tech solutions focus on this area, primarily in the US where we can find a lot of tech startups using Machine Learning solutions to parse, classify, and review the documents in an autonomous manner.
This particular category is further divided into two different types of solutions :-
i) Review process automation :
Drafting a document takes several iterations. The document is usually passed between lawyers primarily in two different styles: interchange of documents within a firm and exchange of documents between two opposing firms. Each of the above process requires a candidate to proof read the documents and provide the previous candidate with the changes and fixes.
This process is time consuming and no system for version control system is popularly used. The lawyers, most of the time, manually go through each point in the document multiple times and use their emailing services,(aren’t we all guilty of using gmail as a version control tool :P), as a method for revision and version control.
The startups solutions in this field use Natural Language Processing techniques to identify the crucial lines/points that a candidate needs to go through instead of the entire document and use an GUI to present the points in a highlighted manner to the candidate. They also provide a version control system to help the lawyers in easily reverting to previous documents or identifying the changes made in the newer versions. Many startups have gone far enough to provide OCR for scanned documents, converting them into editable files and using document classification methods to provide a standard structure for each type of the document.
Few of the emerging legal tech startups working on this field are :-
Lawgeex : Lawgeex help legal teams automate the review and approval of day-to-day business contracts. There solutions aim to reduce the legal bottleneck, and help to focus legal’s time on more strategic tasks. Founded in 2014, they have in 2018 raised $12M for its AI-powered contract review technology bringing their total funding to $21.5M .
Vaultedge : An indian startup founded in 2015 has showcased their first version of the contract review automation system. Vaultedge uses artificial intelligence (AI) and machine learning to understand Contracts the way a lawyer does. They claim that by analyzing contracts and highlighting risks they save approximately 70% of time lawyers spend in contract reviews.
Other startups in this field are Leverton, ThoughtRiver, Lawgeex, Luminance.
ii) Template customization :
There are a number of categories in which the legal field documents are classified into. Each type of document corresponds to a different set of rules, compliance and contracts. Recently, a lot of templates for each category are used by the lawyers, making it easier for the lawyers to create the required documents. This save them both time and effort that they would be required to spend otherwise.
This type of solution can be used not only by lawyers or legal firms but also by individuals who might want to DIY their own contracts. A persona could easily download the required templates such as rent agreements or NDAs etc and fill the relevant information in the documents. A few of the tech startups have worked on questionnaire for each type of document which would make it easier for an individual to fill out a form. Also, chatbots are being used for the Q/A style of template customization.
Emerging startups in this field are :
Prose : It is an advanced LawTech software that lets the user create legal documents by providing drafts and templates for user’s specific needs.
Rocket Lawyer : Founded in 2008, Rocket lawyer has been in the market long enough to diversify their services in many of the categories. In addition to providing legal templates to practitioners and other businesses, Rocket Lawyer also provides legal help and connects people to lawyers. They also provide cloud infrastructure to securely store or access legal documents.
There are relatively fewer startups working in the field of practice management. The main innovation areas is allowing the lawyers the flexibility to work from anywhere and anytime. Solutions provided by the startups focus on capturing time of calls with clients, time spent on input, edit, approve or delete of records etc. The lawyer can choose their fee per activity, generate invoice automatically and securely send it to the client online. Apart from the above focus areas, there are multiple additional features such as full case life cycle support, easy integrations for existing enterprise solutions and automatic conflict of interest check.
Portempus, Lex24, Thread.legal, Signatu are few of the startups working on a a few interesting solutions pertaining to this category.
Lex24 : Lex24 claims to be the modern platform to effectively manage and grow legal practice. The startup allows you to create invoices, track the billable time for each case, and effectively on board new clients.
Research in legal field is one of the most time/effort intensive tasks. If you go to any lawyers office, especially in India, you would be surprised just by the sheer volume of books that they possess. Along with the bare acts, the lawyers, in order to keep themselves updated, subscribe to numerous magazines, supreme court judgements and case summaries. Law firms have their own in house collection of database, which is updated weekly/monthly. Apart from the books, which are dominantly used for references, the modern day lawyer has to subscribe to blogs, and newsletters to keep himself on toes with regards to latest amendments and judgements.
The average time a lawyer takes for the research on his case can vary from 10 days to 30 days, depending on the experience, type of case and the jurisdiction it corresponds to. In order to reduce the research time, many of the startups are working on solutions to increase the relevancy of the data that is presented to a lawyer given a particular case. Using AI based technologies, and leveraging the state-of-the-art machine learning models, a lot of online databases are dominant in the market. The emerging startups tend to focus on intuitive search query methods, increasing relevancy of context based searching, automated summaries of legal cases and optimizing the cost of each of their services.
In India, quite a few startups have picked up their pace to expand their databases, however, many startups in the US are already raising funds to tailor the search queries according to the practitioners needs. The lag in the Indian ecosystem is partially because of the lack of digital copies in the Indian courts. Indian legal system has yet to advance to a digital age which would in turn help the users utilize the advancements achieved in the technology sector.
Manupatra: One of the biggest sharks in the indian legal system, Manupatra started its operations in 2000, and launched its flagship product, the online database www.manupatra.com in August 2001. Manupatra has one of the largest online databases and affordable subscription fees.
SCC Online : SCC stands for supreme court cases. SCC online is another shark which caters to a greater market than manupatra, mainly due to their very low subscription fees. The company not only provides online legal research tools but also provides summaries and short descriptions for all supreme court cases. SCC Online also has a subscription based model for magazines, digests and books accounting for weekly,monthly and yearly cases. The platform is used by student, practitioners, law firms and research organizations.
ROSSIntelligence : Founded in 2014, ROSSIntelligence aims to bring cutting edge AI technology solutions to the real world. They have recently raised Series A funding of about $8 millions, bringing their total funding to $13+ millions. ROSSIntelligence aims to develop a research tool which will show results to the user based on the question posed in the form of a query. ROSS, their first product, is a digital attorney which understands natural language legal questions and aims to provide relevant answers instantaneously.
Due to the nature of the studies in the legal field, there is yet to see any breakthrough in this category. Using video lectures, tutorials and interactive video sessions is something which not only startups or coaching centers but also universities are trying adopt.
However, there is definitely an increase in the number of case competitions or mock trial competitions held by a third party in a university. These third party companies come up with a lot of interesting events and competitions which provides students with a really fun and interactive learning opportunity.
Lawsikho (HQ Delhi) : An online platform for legal tutorials on everyday legal issues faced by common people. It uses technology to provide access to legal knowledge and connect with the lawyers.
Quimbee : Started in 2007 by Matt Sellers, Quimbee is now the best learning platforms with users ranging to tens of thousands. Definitely a veteran company in the field of legal education, Quimbee provides a full suite of services at very affordable prices. Their contents are produced by professional legal writers, and they also have the e-learning platform on iOS and android devices.
An emerging field in the legal tech industry is Legal Analytics. Legal analytics is the discovery, interpretation or communication of valuable and actionable insights in legal data. The primary focus area of the startups in legal analytics field are :
1. Insights on litigation : Data on past cases of the opposing counsel, parties, judges and other participants in litigation so practitioners can develop more effective case strategies and predict potential outcomes. This helps the practitioners to make better decisions such as analysis on whether or not to settle a dispute, and if so, when. Analytics can also help practitioners determine the specific strengths and weakness of opposing counsel and opposing parties, and review their behaviors and outcomes in similar cases.
2. Insights on transaction : This data is especially helpful for practitioners in mergers and acquisitions. Lawyers using analytics can review similar deals and agreements and strengthen their negotiating position in transactions by bench marking from the past cases. They can also run transaction searches for insight on current market practice and deal precedents that cover the complete spectrum of transaction-related topics, including capital markets and corporate governance, corporate and M&A, and employee benefits and executive compensation. Analytics can help identify pending legislative action that may impact the target of acquisition.
3. Regulatory analytics: It helps legal professionals track rapidly changing regulatory developments, make data-based determinations about compliance risk and predict whether specific legislation will pass.
In India not many startups are currently working in this sector which is mainly due to the lack of a proper digital infrastructure to carry out the analysis. However, one such startup in Canada, “Loom Analytics” is steadily becoming one of the prominent player in the sector of legal analytics.
Loom Analytics : Mona Datt, 38, is the co-founder and president at Loom Analytics, which launched in June, 2016. Loom Analytics aims to organize the level of access of the huge amount of legal data that makes it possible to get a big picture and bird’s eye view of a particular area of law.
Apart from the above categories, there are a lot of other problems that companies are trying to solve. The field is filled with a lot of startups, however, very few of them are able to survive past the 3 year and the 5 year benchmarks. This observation could be correlated to the mix of legal and tech expertise required for a successful solution in this field and to be honest you will not be able to find any more diametrically opposite fields.
I hope this article has helped the reader to get a better understanding of the legal tech field. In case of any questions, please feel free to reach out or comment below :)