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The next step after Fintech: Legaltech

Aline Arbesú's picture
Published: 04/07/18 - Country: Mexico

This new niche of business opportunities through which companies use technology platforms to provide all kinds of financial services, has positioned itself in recent dates, providing users with services that operate in varied markets, in an agile, efficient and "friendly" way. , whether to the user of the financial system directly or indirectly by designing solutions to companies that offer them: Fintech is, without a doubt, to the world of financial services what Legaltech promises to be to the legal world.

In the same way that Fintech is defined, Legaltech has a compound meaning that translates into the use of technology applied to Legal Sciences and that, like this counterpart use of technology in the financial area, supposes a disruption in the understanding we have of technology up to now and its relationship with Law. Thus, in the same way, the use of the internet, smartphones and the efficient use of algorithms have explored the user's need to have simple, simple and friendly experiences.

The above is best understood when discussing the use of financial platforms, however, its application is not so clear in a field that is distinguished by documentary formalism. In Mexico, there are valuable approaches in the use of information technologies to improve procedures in the delivery of justice, such as the online trial, currently in force and in use by the Federal Court of Administrative Justice, a precursor institution in the use of of these tools. However, the challenges arise when we continue to require autograph signatures to determine the procedure of claims against all types of institutions.

It is worth mentioning, however, that even though the Fintech boom has not yet reached its peak, the Legaltech sector is definitely in an exponential growth and development, having its biggest boom in the United States and in Spain, countries with the highest number of start-ups in the area.

But what is Legaltech then? According to Ester Ribas, "These are legal services where the technical part is combined with the legal part, and are developed under a completely technological base, such as cloud environments, artificial intelligence for the help of mechanical tasks, etc."

However, although the definition seems simplistic, we can not ignore that, like Fintech, Legaltech completely defies the provision of legal services, being equally disruptive and having to face the same challenges. So far, they have done so in the form of applications designed to streamline and expedite the administration of files, clients, invoiced hours, terms, libraries, etc., of law firms, have also been generated to locate specialized legal services by area, requests for quotes or make online claims for deficiency in the provision of services. Imagine, for example, a platform designed to present online claims to the PROFECO, in which the user from your mobile device, can prepare, send and track their files.

Another clear example of the scope that Legaltech can have is the number of starups that have begun to develop procedures of this nature, such is the case of Wevorce.com, dedicated to online mediation in divorce proceedings.

Created by Michelle Crosby, based in the United States, this platform provides a relaxed, uncomplicated and even friendly procedure, and is not that just what every user wants, particularly in sensitive topics such as divorce ?. This being so, online divorce service is offered, through only 5 steps and at an extremely low cost to the normal lawyer's fee per consultation. Of course, according to Michelle, the "divorce market" moves around "40 million euros" in the legal sector.

It is so incredible that it seems to those of us who develop professionally in the sector, there are currently start-ups for the management of intellectual property (IPNexus), in software development for customer management by gathering the necessary information from them that lawyers may require (PlainLegal), to manage the quality and safety inspections of companies regardless of their size, as well as non-profit organizations to manage due legal compliance (Mewe), to discover, analyze and compare patents through of portfolios and new technologies (PatentVector), to allow users to create, sign and send legally, binding agreements in seconds (Shake), to mention just a few.

For example, IBM has created an artificial intelligence system, managed by Ross Intelligence (perhaps referring to the character Mike Ross, of the North American series "Suits", a lawyer who enjoyed a privileged photographic memory?), Which analyzes thousands of jurisprudential criteria to be able to give solutions to specific questions in record time. However, it is important to consider that there are other legal services that could hardly be offered through a platform: contentious procedures, anti-monopoly procedures, certain governmental procedures, negotiations, etc. In addition to the above, it is a reality that the use of internet through cell phones has exceeded the use of the internet through the laptop or desktop, so that mobile applications are now extremely attractive in the market.

In April 2017 - with which you can see that these types of platforms have already started - the Legal Industry Forum 2017 was held in Zurich, where, among others, issues related to innovation and legal design were discussed. , big data, digital platforms, Artificial Intelligence and its application in the legal field, the legal "marketplaces", the automation of legal documents up to concepts such as "intelligent contracts" and the new legal vision that must exist from the legal formation in the classrooms

It is essential to accept that there is no professional area that is not influenced, disrupted, modified in any way by technology, so in a niche in which there is still debate on issues related to basic concepts such as the absolute validity or otherwise of a digital signature or autograph-digital, it is necessary to reflect on the issues that should be discussed in the following years on the growth of Legaltech.

The main thing is undoubtedly to understand that the profitability of the firms of lawyers has decreased derived in principle by the high supply of the same and the competition that exists in the market and the fact that companies increasingly allocate less economic resources to the contracting of them, not seeing them as operating costs. So you have to get creative and technology has shown today to improve efficiency at a lower cost.

As long as the law firms focus their efforts on the client, the result of the innovations will be favorable for them, since the objective is to offer a superior experience as a user to the one to which they are accustomed. Now nobody can say that this is not what the success of other platforms lies in, what they offer are experiences in the use of their services.

In summary, the Legaltech theme gives much in terms of investment, innovation and vision of legal services to futures. There are undoubtedly the firms that start to consider platforms such as those mentioned as an example in the provision of their services, which may impose the rules of the game and have the highest market penetration in a niche as profitable as financial services because at the end of the day, all those potential clients need, whether they want to recognize it or not, a lawyer, so why not put it in the comfort of your cell phone at a "click" away?

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Aline Arbesú's picture

Mrs. Arbesú has almost two decades of legal experience in advising in corporate matters, to either national and international companies, with broad experience in mergers and acquisition, legal framework and incorporations, as well as tax related issues, administrative law, corporate compliance, prevention of fraud, etc.

She also has experience dealing with IT matters, licensing, software development and implemmentation, franchising and commercial endeavors.