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“Legal Tech” combines law and technology
Legal tech refers to systems and services that use the latest technology to support operations in the legal field.
Origin of legal tech
America is a famous litigious nation. In legal proceedings, large amounts of documents need to be analyzed. Computers have been used for a long time to support legal work by lawyers and others . The scope of services has expanded with the recent development of artificial intelligence, and it has started to attract attention since the 2010s, when it is called legal tech.
Domestic legal tech market size
Legal tech is gaining momentum around the world, but how is the market size in Japan increasing? According to the Yano Research Institute, which is famous for its market research, it is predicted to reach approximately 33 billion yen in 2022, and further to approximately 35 billion yen in 2023. Our services are expanding rapidly from litigation to contract support, and we are experiencing rapid growth.
Why is legal tech attracting attention now?
Japan is currently promoting work style reform as its population declines . As part of this, legal tech is attracting attention and is gaining momentum. Let’s take a closer look below.
ITization of business
One of the ways to reform work styles is to accelerate the use of IT in various tasks. Particularly during the coronavirus pandemic, remote work is becoming the norm, and legal tech is being used to allow contract procedures to be completed at home rather than in the office. For example, there are electronic contract services that use electronic seals rather than physical seals.
The need to strengthen corporate legal departments
Additionally, the legal department itself must evolve. As business continues to accelerate, strategic contract work is becoming increasingly important. In order for legal departments to focus on higher-value work, it is necessary to improve efficiency through legal tech. By leveraging the power of AI, you can focus on negotiating strategies with your contracting parties for tasks that involve simple administrative procedures.
Types and overview of major legal tech services
There are many types of legal tech. The intended users are wide-ranging, including not only lawyers and legal departments, but also legal researchers.
electronic contract
Until now, in contract procedures, it was common practice to affix a seal on printed paper. It took a lot of time to receive the paper, stamp it, and send it again. However, with the introduction of electronic contracts, things are changing dramatically. Just by introducing this service, you can greatly reduce the costs of sending and stamping procedures.
Contract review
You can also easily review contracts. It is easier to manage the history of changes made in the past, and there are also functions that assist in showing the relationships between clauses. This simplifies the discovery of missing contract terms and the identification of clauses that are inconsistent with each other. Considering that up until now, people have been able to check things with their own eyes, you can feel that there is definite progress and effectiveness.
document management service
The usual way to manage contracts was to file the original documents and keep them on a shelf. However, now, with legal tech, it is managed digitally and search is easier. It is also possible to digitize paper contracts by OCR scanning. Furthermore, in recent years, new laws regarding contract storage obligations have been introduced, and corresponding legal tech services have also appeared.
making document
In addition to reviewing legal documents, we also have services that can help you create one from scratch. There are some that instantly generate a first draft by simply selecting a template that corresponds to various contract conditions, and others that create a document while visualizing the terms and conditions. There are also services that allow easy history management, and that automatically input and correct article numbers.
Application/Application
Many legal documents are submitted to administrative organizations. For example, documents such as patents and trademarks submitted to the patent office will be considered. All you have to do is enter the main parts, and the system will assist you with the other necessary standard parts. Speaking of patents, you may think that technical and creative writing is required, but with the development of AI, there are some that can assist by learning a huge amount of past patent writing.
legal research
Until now, when researching law, I had to search for large amounts of literature in paper books. In recent years, digital databases have been prepared to assist in such research. You can search litigation data by article or issue, which will greatly help speed up your work. There are also functions that allow for cross-sectional investigation of litigation and legal fields, making it easier to conduct comparative studies.
forensic
The word forensics originally meant the preservation, investigation, and analysis of evidence in litigation. Previously, large amounts of documentary records were collected and investigated. In recent years, legal tech has made it possible to restore emails, digital files, etc. even if they have been deleted. Furthermore, the past history can be traced even if the data has been tampered with and overwritten.
dispute resolution
Dispute resolution involves civil court proceedings, such as divorce or financial matters. These procedures are often thought to be complicated and time-consuming. However, legal tech is enabling digital services for out-of-court dispute resolution. All procedures can be completed online, making it easier to select a neutral mediator.
Advantages of introducing legal tech
As mentioned above, many services have been developed and introduced. The underlying benefits are as follows:
Document work can be made more efficient
Paper work that used to be done using printed paper will become easier with AI. Going digital will make it easier to search, automatically check and suggest corrections, and make tasks that were previously necessary more efficient. In addition, until now it has been extremely difficult to process huge amounts of legal data manually, but AI can now perform big data analysis. For example, tens of thousands of lawsuit data and patents can be automatically processed. You can also analyze it to find new suggestions.
Can save time and cost
Legal tech has enabled legal work that used to take a lot of time to be completed in a shorter period of time. As a result, labor costs can be reduced as well as printing costs. Furthermore, there is no longer a need to go out to the National Diet Library, for example. In this way, legal practitioners are freed to focus on higher-level, value-added work. It will also increase productivity per person for legal personnel, contributing to the promotion of work style reform.
Moving from paper to digital makes information more easily accessible to everyone. One of the major benefits is that you can manage versions and check who made changes to documents and when within your organization. If one person is responsible for the work, it may become difficult to manage progress, and work know-how may not be shared. These issues will become easier to solve by centralizing information through legal tech.
Disadvantages of introducing legal tech
Legal Tech is a relatively new service, and there are disadvantages that you should be aware of. The main ones are listed below.
There are some cases where electronic contracts are not accepted.
Current legal tech does not support all types of contracts. It is recommended that you organize the contracts you currently handle in your legal work and carefully check their relationship with the scope of service coverage. Related laws regarding electronic contracts have been improving over the years, but they are still not perfect.
It is also important to note that electronic contracts cannot be concluded unless the other party has also introduced the same type of service. It would be a good idea to check with your business clients about the legal tech they use.
Responsibility in the event of trouble is unclear
Legal Tech only provides support for legal work and is not responsible for the work itself. For example, in the case of a contract review service, the service only provides revision suggestions, and the responsibility for the success or failure of the contract and any disadvantages that arise lies with the person. Furthermore, even with centralized cloud management, the possibility of a sudden server outage cannot be denied, so it may be necessary to take appropriate measures to address the disadvantages, such as building a backup system.
Key points when introducing legal tech
So far I have talked about the advantages and disadvantages. Next, we will touch on the points to focus on when actually considering implementation.
Clarification of purpose
Let’s carefully consider the issues we want to solve by introducing legal tech. Just because a service is trendy, it is unlikely that you will actually get any results from using it. It is recommended that you carefully interview the people currently engaged in the work and identify any issues that need to be resolved organizationally. At the same time, carefully analyze whether the legal tech you are considering addresses your specific issues.
Get a free trial
It is not recommended to introduce a paid service without actually trying it. Many legal tech services offer free trials. While you can use the full functionality, many of them have restrictions on the number of accounts and usage period. We recommend that you consider in advance which problem you would like to try solving, contact the service vendor to confirm, and then run a free trial.
Phased introduction
Even if you decide to introduce it, avoid purchasing a large number of accounts or using a full-featured version from the beginning. We recommend solving the business problems one by one, starting with the most important. It is best to start with a small number of accounts in a specific department, measure the effectiveness, and gradually expand the organization.
The future of legal tech
Legal tech will continue to develop as work style reforms and telework are promoted. Users are expected to expand not only to lawyers and legal departments, but also to the general public in civil trials and non-judicial disputes. As technology development, including artificial intelligence, advances and the number of vendors increases, competition advances, and opportunities to try out free trials will increase.
In other words, an attractive future awaits legal tech. As vendors’ stock prices are expected to rise, user convenience is also expected to improve.
summary
In this article, we have extensively touched on legal tech. In addition to litigation support, we offer a wide range of services such as contract review and contract management, and we expect further development in the future. Some of them also have free trials, so lawyers and people in the legal department, who are the main intended users, should try them out while comparing them.
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