How LegalTech startups are employing technology for effective justice delivery

The deep-rooted mistrust in the speed and efficiency of justice delivery in India is not without reason. Over 1 million or 20% of the total cases in the High Courts of India have been pending for 10 years or longer, with some pending for even more than 20 years.

The COVID-19 pandemic exacerbated these challenges, with the number of pending disputes increasing from 36.8 million in March 2020 to 38.1 million in April 2021.

To address this, the Indian judiciary has taken multiple steps including upgradation of e-courts infrastructure, virtual hearings, e-filing etc. In addition to State-led efforts, we believe that LegalTech startups leveraging emerging technology to solve for the diverse stakeholders - legal service providers, citizens and businesses, and regulators - have a significant role to play in improving access to justice.

Intensive research interviews with LegalTech experts, startup founders, and representatives from service providers and regulators showed eight high-potential opportunity areas for entrepreneurs to build LegalTech solutions.

Online Dispute Resolution

Access to swift and cost-efficient dispute resolution is a huge challenge in India. Online Dispute Resolution (ODR) startups leverage flexible dispute resolution mechanisms such as negotiation, mediation and arbitration, and the power of technology, to reduce the time frame and transaction costs of human-interfaced dispute resolution. While the direct impact will be on disputes that never reach the courts (between 25% to 49% of disputes), over time it will also be able to reduce court pendency. Over 75 enterprises have already started using ODR to resolve their disputes. In addition, policymakers have also recognized its potential and are working to create an enabling policy environment for the sector.

Marketplaces

The legal services market in India suffers from two crucial challenges. One, citizens and businesses find it hard to find legal representation and advice suited to their needs (e.g., location, case type) and price point. Two, lawyers find it hard to attract a steady stream of disputes. Legal marketplaces correct for these two challenges by connecting legal professionals to clients, often at a fixed price point, thus solving access problems for both demand and supply sides. In addition, these platforms also provide do-it-yourself legal services (eg. DocsCreator) as well as basic legal information (eg. Lawtendo).

Contract Management

Legal teams often deal with time-consuming contract drafting and vetting for a significant number of contracts requiring customisation. Contract management solutions provide automated creation and execution of commercial and private contracts. Simultaneously, startups also provide services in this domain to reduce the time and resources a business has to spend on their contract vetting needs.

Compliance Management

The average company in India has to meet 25,537 compliances spread across multiple departments of the Central government, requiring the enterprises to individually keep track. Add to that state-level compliance and those for individual citizens, this presents a big market for entrepreneurs to build GRC (Governance, Risk and Compliance) solutions. These platforms and services cater to an individual’s or an organisation's comprehensive compliance needs, and enable businesses to file, monitor and track all their compliance needs (e.g., ComplyBook). These platforms also notify businesses of any new compliance requirements arising due to regulatory changes.

Case Management

Lawyers often deal with large client datasets and complex processes, while also tracking simultaneous case proceedings and hearings manually. This makes the clients solely dependent on lawyers for such updates. Startups building case management solutions can make life easier for both lawyers and clients by facilitating real-time tracking of all case information including lead generation, client onboarding to case preparation, calendar options and automated updates to clients.

Practice Management

As lawyers and law firms often find it challenging to operate auxiliary activities such as Human Resources (HR) and payroll tools, client database integration, invoicing tools etc, startups provide these value-added solutions for operational aspects of a legal practice.

Research and Analytics

Lawyers often spend a third of their working hours on research which is largely manual, thus reducing their ability to service multiple clients at the same time. Startups provide analytical tools on archives of case decisions and proceedings, which are used by service providers for preparation, arguments and predictions. Citizens involved in litigation can also use this data to educate themselves about similar past cases and judgements.

Intellectual Property (IP) Management:

IPs in India often require regular renewals, maintenance and monitoring to ensure enforceability, thus making it a continuous effort. IP management solutions cover services such as registrations and management (eg. Trademark Bazaar), and protection (eg. IPHawk) of IPs such as patents, trademarks, copyrights etc.

This wide range of solutions allows startups to explore multiple revenue models such as subscription-based pricing, time-based pricing, fixed amount as percentage of total dispute value, hybrid pricing models etc. Apart from the ones mentioned above, there are other upcoming areas such as case prediction, succession management, open source legal intelligence platforms, and performance evaluation integration on marketplace platforms, which are expected to become more viable for startups in the next five years. As startups continue to use and build from the currently publicly available data sets, we can also foresee favourable regulatory changes for startups to build solutions for the judiciary.

Shailaja Shukla is Associate, Insights at CIIE.CO.