Are legal solutions becoming a commodity? What if you could solve a legal problem through your mobile phone?
Author: Marti Manent is an entrepreneur, Co-Director of the Master in Legaltech and founder and CEO of Derecho.com (legal services online provider) and founder and CEO of elAbogado.com
In 1997, I realized technology would transform the way we do business, and that legal services were going to change along with it. I concluded my law degree that same year and created my first website, both provided some interesting information about the law and legal resources. Not long after, I received an email from the government of Kuwait—from the Kuwait Investment Office—asking me to provide services to them regarding an M&A transaction.
This was the beginning of my twenty-year-plus journey into entrepreneurship in the legal sector. Now, I am the CEO of Derecho.com, a LegalTech company with over 350,000 customers, and elAbogado the leading marketplace for lawyers in Spain and Mexico, which I balance with my other responsibilities as Academic Co-Director of the Master in Legaltech Director of the Legal Bridge to Silicon Valley Executive Program, and professor at IE Law School in Madrid.
Taking an entrepreneurial route
It’s an exciting time to be a legal entrepreneur. The sector is finally beginning to leverage AI, blockchain, and other innovative tech solutions to provide a new and improved type of legal service. But that’s not to say it’s all been smooth sailing. One of the first mistakes we made was not conducting a simple A/B test to check if the service fit the market needs. It turned out that people were asking for another service, not the one we were working hard on. So, we decided to leave the service that we were initially working on behind, to focus on what the market was demanding—and this was the turning point when we started to grow.
This remains my main piece of advice to all budding entrepreneurs: if you have an idea, you need to verify it as soon as possible. If you realize it doesn’t work, forget about it and try another one. You need to listen. Besides that, it’s about getting things done. I only made a business plan once we had a big investor. Developing a comprehensive business plan early on is not a good idea because you don’t know what will happen in the future. Make some numbers to get an idea of how much money you need, how you intend to spend that money, and how you are going to get money from the customers—but that’s it. Also, check every week how much money is remaining in your bank account. One of the common mistakes people make at the initial stages of a project is that they stay in their confort zone, stick to planning and research, and don´t face reality.
If you have an idea, you need to verify it as soon as possible. If you realize it doesn’t work, forget about it and try another one.
Reimagining the legal market
As for the legal market, I see it as an industry in its own right; and it has some problems. Firstly, professionals in this industry do not work well with technology. On top of that, we lawyers tend to think that the legal industry is only for us, and that is not true. Many business professionals and entrepreneurs are entering the legal industry and providing services, gaining a large share of the legal market and leaving lawyers with a relatively small part.
For example, many jurisdictions have public notaries to legalize certain types of documents. I don’t think they add any value. You can do that using a digital signature with a digital identity, which is not only easier, but also cheaper, and probably more secure. This will be a mayor change in the industry, as many companies, banks, and insurance companies are already providing documents or agreements online with a digital signature. As a result, many lawyers and notaries have started losing their jobs. What can we learn from this? Legal services that don’t add value and are not considered a legal requirement will disappear or will be done by a cheaper and more effective provider.
An eye on the future
Lawyers who embrace new technology are those that are going to thrive. There has been recent talks of the “Uberization” of the legal industry, and this is a mayor shift in the industry. Marketplaces like “elabogado”, while not entirely like Uber (Uber decides who is going to be the driver, whereas with our service the user chooses the lawyer), take the same direction because the user sees legal services as a commodity.
Legal services that don’t add value and are not considered a legal requirement will disappear or will be done by a cheaper and more effective provider.
If you are looking for a lawyer, and you are between 20 and 35, you will likely want to solve the legal problem online through your mobile phone. This is a huge opportunity for Legaltech companies and many are taking this direction.
Looking ahead, I think a mixture of new skills and innovative technology will define the future of the legal industry. The state of the art in Legaltech is incorporating machine learning solutions and artificial intelligence to help us make decisions, as well as DIY mobile services or blockchain registered transactions or documents. At elAbogado.com, for example, we have managed more than half a million cases online but without having 500,000 lawyers to serve those clients. We use our own algorithms based on machine learning technology called LIQS® (Lead Instant Qualifier System) to identify whether it is a civil or criminal case, or if it is a fiscal or tax problem. In 95% of cases, our technology identifies the issue correctly and understands if there is a real legal problem or just a small question.
Developing the right skills
However, technology isn´t everything. We need lawyers who are able to respond to this shift in the industry and in order to do so future law professionals must explore a set of skills that this new legal industry needs. The first is management and business skills: OKR, Lean, Agile are all management methodologies that we must learn as professionals of the legal industry.
The second is to learn about what lawyers can do with technology, a crucial skill to understand the capacities and how to manage that tool.
The third skill future lawyers need is to be more customer-oriented and think about what clients need. Many of my colleagues believe the law is more important but I see it as a commodity. Today you can find a legal solution almost everywhere you want. It’s not about knowing the answer, it’s about understanding how you provide the service.
As the world changes, legal solutions are becoming a commodity. If we look beyond the horizon, people will see it like water: different bottles but the same content. It’s up to us, as innovative lawyers, to provide the best package.
Author: Marti Manent is an entrepreneur, Co-Director of the Master in Legaltech and founder and CEO of Derecho.com (legal services online provider) and founder and CEO of elAbogado.com, the largest law firm directory in Spanish. He has also served as Legal compliance lawyer for several companies and is specialized in e-commerce, startups, digital content, data protection, and intellectual property.
Note: The views expressed by the author of this paper are completely personal and do not represent the position of any affiliated institution.