LegalTech в России

LegalTech in Russia: examples of automation of work in the legal field

LegalTech (from Legal technologies) is a modern business direction that is engaged in the integration of information technologies into the field of jurisprudence. The mission of the industry is to simplify and optimize the provision and receipt of legal services using innovative software solutions.

Legal practice is perhaps the least changed area of activity over time. Mechanics were moving from steam engines to internal combustion engines. Shipbuilders from wood to metal and composite alloy. However, lawyers have remained concerned with the law.

But things are changing. In the age of the global domination of the Internet, representatives of many professions have to revise their usual work patterns and the legal sphere is no exception. It is quite possible that soon, thanks to modern technologies, jurisprudence may change beyond recognition.

A deeper look at LegalTech

It is not necessary to reduce the role of LegalTech products to purely auxiliary programs like databases or contract templates. We can safely say that jurisprudence is entering a new era. Already now there are projects that can completely replace a “live” specialist at a certain stage of work.

Downsides of LegalTech

Of course, this does not mean that lawyers have outlived themselves as a class and will soon become unnecessary. You can compare changes in the legal sphere, for example, with the automotive industry. Yes, now automatic machines are working on the conveyors and not crowds of workers like Henry Ford at the beginning of the XX century.

But we still need specialists who will set up, maintain and repair equipment and robots cannot replace people in all operations yet. Therefore, it is quite possible that with the development of technology, lawyers will also have to reconsider some priorities, acquire new skills and goals in their work.

The task of LegalTech is to make justice accessible to a wide range of ordinary people, so that it ceases to be a secret for them behind seven seals.

If this happens, some number of people working in the legal field will have to look for a new job.

Upsides of LegalTech

On the other hand, there is a large bonus. Those who previously could not afford to participate in court proceedings, because they simply did not have money for a lawyer, will be able to defend their rights in situations in which they would have given up earlier.

Violations of laws in different countries often occur because large corporations understand that a simple man in the street cannot compete with them in court. If modern technology puts an end to this, the world will only benefit.

In addition, the automation of legal processes is a serious dumping factor. Who will go to pay a “live” lawyer a conditional 1000 rubles for paper registration, if you can do the same on the website for 100?

Therefore, the appearance of products that automate the paperwork process or provide online consultations will be a serious incentive for lawyers not to raise prices for their services and treat clients more carefully.

An example of LegalTech from our company’s practice

APEXCOM ™ is a consulting company that specializes in conducting mergers and acquisitions (M&A) transactions.

At the same time, we provide legal advice to citizens, within the framework of social responsibility. It turned out that there are categories of cases for which lawyers either do not want to take on or the price of a lawyer’s services is higher than the price of the dispute itself.

For example, participation in shared-equity construction. In 90% of cases, the developer does not rent housing within the time specified in the contract. The Law 214-FZ gives the participant of shared construction the right to collect a penalty for the DDA.

However, this is only right. A person has the opportunity to claim a penalty, but in fact it is difficult for him to figure out HOW to do it. Problems begin already at the stage of calculating the price of the penalty, let alone filing a claim and participating in the trial.

Therefore, lawyers, together with IT specialists of our company, have developed an application that helps citizens to recover a penalty for DDA without contacting lawyers in an automated mode. You can enter the necessary data, the application will calculate the penalty and form an application for filing in court. The bottom line is that it is easy and simple to do. Data entry will not take more than 10 minutes.

Приложение по взысканию неустойки ДДУ

At this stage, we have already implemented a working version. You can take part in the testing and use the application absolutely free of charge and without commission. You can download it in the App Store and Google Play:

The history of LegalTech

История возникновения LegalTech

Formally, the history of the industry should be counted from 1977, when mass sales of personal computers began. Now, these cars seem like museum exhibits both in appearance and in power, however at the time it was a real breakthrough.

As well as, the LexisNexis company appears in the USA, providing clients with access to legal and business databases (the then analogue of Consultant Plus). The company still exists and is considered the largest online library in the legal and some other fields.

In the world

However, the technological capabilities of that time still did not yet allow the industry to develop widely. The rapid growth of LegalTech occurred only at the beginning of the XXI century. The shooters were again American companies — Legal Zoom and Rocket Lawyer, which provided automatic document drafting services and online legal advice.

Initially, all these programs were intended for professional lawyers or business representatives. They provided mostly background information and it was difficult for an untrained person to understand them. But since 2010, products have also been created for individuals who are far from law.

Some projects provide a certain set of services in a fully automated mode. For example, through the American LegalZoom, you can open a company and register an intellectual property right — for example, for an emblem or a brand of a product. In Russia, AMULEX systems or a Lawyer will remotely consult on legal issues, and, for example, in Germany, the same functions will be performed by Pravocard or the European Legal Service.

In recent years, LegalTech services have become more and more accessible. Any smartphone owner can appeal against an illegal, in their opinion, fine in the DoNotPay program. The George legal service of Doogue O’Brian will compose a text for a speech in court, thus they will just answer a few questions.

There are separate services for checking the reliability of business partners, calculating tax deductions or obtaining an electronic signature. Work on automation of standard legal and business services is in full swing at an increasing pace. The USA is leading in this race. In Europe, the LegalTech segment is still relatively poorly developed, with the exception, perhaps, of Belgium and France. These and some other countries have rather complex legislation, which encourages the introduction of technologies that simplify legal processes.

LegalTech in Russia

In the Russian Federation, the integration of LegalTech products into the legal sphere, according to experts, does not exceed 15% yet. Basically, this is the automation of processes related to the court. This trend started quite recently and, oddly enough, you need to thank the notorious coronavirus for it.

On April 08, 2020, the decree of the Presidium of the Supreme Court of the Russian Federation No. 821 was issued. The normative act suspended the personal reception of citizens in judicial instances and at the same time recommended accepting documents remotely. Thanks to the introduced practice, more than 3 million lawsuits were filed electronically in 2020. 400 thousand meetings were held via video link.

By 2024, it is planned to launch the Justice Online superservice on the Gosuslugi portal. The program will allow you to conduct litigation in a completely remote mode.

It will be possible to file a claim online, pay the state fee directly on the website, remotely participate in the meeting and receive a decision in electronic form.

The rest of the Russian sphere of LegalTech is represented mainly by databases — Garant, Consultant Plus, etc. The reason for the “braking” is that now services of this kind in the Russian Federation are provided mainly by small companies. They are afraid to “swing” at serious projects and are engaged in minor tasks. Also, the owners of small firms that make up the bulk of the clientele do not often need legal services and are not ready to invest serious finances.

Conditions for LegalTech in Russia

Still, it is not necessary to represent Russia as a symbol of dense backwardness. There are prospects for large-scale development of digital technologies in the country. There are three serious prerequisites for this:

  • Russian legislation (unlike European legislation) does not provide for mandatory licensing for the provision of legal services. That is, the possible circle of founders of such enterprises is significantly expanding — it is not even necessary to have a specialized education;
  • Russian business is still interested in automating work processes. Suffice it to say that CRM systems in the last decade have become widespread not only among large companies, but also in small trading firms;
  • The state, in turn, is also interested in the spread of digital technologies. Nevertheless, not only nanotechnologies are made in Skolkovo. In recent years, several fairly large startups in the field of LegalTech have emerged from there — Dbrain, Pravoved.Ru, “Online Patent”, DestraLegal.

These projects are actively attracting investments, not only Russian, but also European. Which indicates the serious attitude of the West to domestic developments.

The most successful projects of LegalTech USA

проекты LegalTech США

As in many high-tech industries, the United States holds the palm in LegalTech. The volume of the American market of legal projects is about 450 billion dollars (for comparison, in Russia — 2 billion). Some of the most successful products created in the USA are described below.

Clio

This is a kind of cloud CRM, focused on organizing the work of small law firms. The startup, launched in 2008, attracted $275 million in investments. The system allows you to store data, upload document templates, issue invoices and much more.

The project is very popular — it is used by about 150 thousand companies in 90 countries of the world. Moreover, the program is also integrated into the system of training lawyers in many educational institutions. For their graduates, Clio will soon be as familiar as 1C for accountants.

eDiscovery

In order to successfully appear in court, it is necessary to competently collect and formalize the evidence base. Otherwise, any lawyer will easily ruin the case. eDiscovery helps to prevent this. Launched in 2012, the startup received more than $133 million from investors.

The service is based in Texas. It is designed to manage data during the collection and examination of evidence in preparation for the trial. As part of the program, clients can collect, analyze and exchange various information — audio, video, text files.

Icertis

The service is designed for cloud contract management. The majority of clients are companies that sell corporate software. In such transactions, a lot of various approvals and changes usually take place before the contract is closed. In manual mode, it is difficult to keep track of all this, especially if the company is successful and has many customers.

The Icertis platform allows you to store corporate contracts in the cloud and manage them using artificial intelligence and blockchain technology. According to customer reviews, the program is simple and easy to use.

Fastcase

This is a real veteran of the LegalTech market — the company was founded back in the 90s of the XX century. The product is designed for legal research and competes on an equal footing with the leading programs in this field — Westlaw and LexisNexis.

Recently, the company acquired the Judicata project, specializing in data processing and structuring. Fastcase generally tries to “keep its nose in the wind” and actively acquires young promising startups. No wonder the number of users of the product will soon exceed one million.

LegalZoom

A powerful company with a capitalization of about $ 5 billion. The platform provides a wide range of online services for both businesses and individuals – from the opening of a company to the divorce procedure of spouses.

Founded in 2001, in 2012 LegalZoom extended its influence to the UK by entering into a joint work agreement with the law firm QualitySolicitors. In the USA alone, the project boasts more than 4 million customers, and the volume of investments in the company exceeds $ 800 million.

Some well-known Russian LegalTech projects

История возникновения LegalTech

Despite the not very high level of development of LegalTech so far, Russia also boasts quite large products. some of them have also appeared quite a long time ago.

PLATFORMA

The company was founded at the end of 2016 by lawyer I. Tsvetkova. The activity of the service is connected with judicial financing. This is a mechanism in which a third party (investor) sponsors the plaintiff during the proceedings. Of course, this is most often done when the payment of any material compensation appears in the process.

As already mentioned, often the plaintiff does not have enough money for proper legal support of the case — then the investor is connected. For their help, they are entitled to a certain share of the funds sued — of course, only if they win. Therefore, judicial investments are a rather risky type of business. After all, even the most venerable lawyer will never 100% say exactly how the case will end.

PLATFORMA searches for investors for “needy” plaintiffs, and also acts as an intermediary. So far, this is the only service of its kind on the Russian market, although such a mechanism is very popular in the West. In 2017, the company received $10 million in investments from the California venture fund Y Combinator.

VisaBot

VisaBot was created in 2016 by entrepreneurs A. Zinoviev and A. Goldman. Before that in 2015 they created an online service LegalSpace, with which it was possible to find a lawyer anywhere in the world. The project quickly brought businessmen 8 million rubles, after which they moved to California, where they created VisaBot.

The service is intended for immigrants to the United States. He helps to issue a green card or extend a work visa. American investors from Silicon Valley have invested more than 500 thousand dollars in the project. By 2018, about 105 thousand people had used the bot’s services.

Recently it became known about the sale of Visabout to DoNotPay owner Joshua Browder. The former owner of the product, Artem Goldman, said that he and his partner intend to continue to deal with bots, but already as investors.

Pravo.ru

This service can rightfully be called an “old-timer” of Russian LegalTech. It was founded in 2008 by Alexey Pelevin, the owner of the Park design studio. The company works in several directions:

  • The legal reference resource is a free automated analogue of the Consultant-Plus and Guarantor programs. Unlike the mentioned products, robots collect information for the system and upload it to the portal, converting it into a readable format if necessary. Already in mid-2018, the system had almost 66 million documents;
  • electronic legal proceedings. The company has been cooperating with the SAC of the Russian Federation since the beginning of 2010. In addition to maintenance and optimization of arbitration courts’ websites Pravo.ru developed and implemented a File of arbitration cases, as well as its mobile version;
  • services for specialists. The company has released several paid programs for professional lawyers based on its information and reference system – Casebook, Caselook and Casepro. The products provide various information about legal entities, allow you to work with judicial practice and help organize the activities of legal departments.

Recently, the company, together with Sberbank, launched Bankro.TECH, an online service for conducting bankruptcy procedures.

Doczilla

Document designer created by Kirill Buryakov, co-owner of Lex Borealis law firm. Born out of a desire to simplify routine work in your own company, the project went online in 2018 and gained wide popularity.

A document (e.g. a delivery contract) is generated automatically by answering the checklist questions. It remains only to fill in the details and other empty fields. You can also fully integrate Doczilla into the system that the company works with. Then the program will find all the necessary information by itself.

The platform has been awarded the Skolkovo Foundation Award, among its clients are Sberbank, MTS, Russian Post, Rosatom, etc. In the near future, it is planned to launch the program on Western markets.

Prospects for the development of the LegalTech industry

Перспективы развития отрасли LegalTech

As previously mentioned,  one of the most “inflexible” areas of activity is the legal sphere. Therefore, it is not surprising that the market for innovations in the legal sphere is not growing at such a rapid pace as in finance or, for example, accounting.

According to analysts’ forecasts, the LegalTech market is expected to grow by only 6% in the next 5 years.

Nevertheless, the total amount of investments in legal startups in the first half of 2021 alone is $1.8 billion. This is a record indicator, which indicates positive dynamics in the industry.

It is impossible not to mention the coronavirus pandemic, which gave a powerful impetus to the development of online technologies, including the legal field. In regard to, investors’ interest in LegalTech projects has also increased dramatically.

According to research, at the moment 14 companies from the UK, USA and China have become unicorns, i.e. their capitalization has exceeded $ 1 billion. American companies continue to hold the palm in terms of investment attractiveness.

Experts outlined the main directions of development of the industry in the coming years:

  • changes in legislative acts are happening rapidly and it is challenging to track them. This should encourage the development of solutions for the management and systematization of legal information;
  • expanding the use of artificial intelligence and forecasting technologies;
  • mass migration of companies to the cloud sphere;
  • the introduction of a risk-based approach in management, the desire to prevent possible problems;
  • close attention to the protection of personal data.

As can be seen from the above list, the field of LegalTech has a lot to develop. In general, so far more than 80% of consumers of the industry’s products are businesses, however government agencies are also showing interest. Officials need automation of document flow, specialized software for inspections, as well as verification of the reliability of suppliers.

From the investors point of view , the current most attractive solutions for automating work with contracts. There are growing requests to refuse to store scanned copies of signed contracts in PDF and switch to machine-readable formats that allow for various analytics. Additionally, contract designers and applications for electronic document signing are also popular.

Разрабатываем Стратегии для собственников бизнеса в целях оптимизации группы компаний, решения нестандартных задач и продажи активов. Оказываем услуги по сопровождению сделок M&A, управлению непрофильными активами и проектами в целом.

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