The guide for LegalTech-startups: where to go, what directions to develop and what to consider

on projects in the field of e-commerce, FoodTech, HealthTech and IT services for households. One of the directions of fund are services for the Legal market. In August, 2017 company invested $1 million in Russian marketpleys legal services "Pravoved.Ru", and in March, 2018 of AddVenture together with the partner of Target Global of Fintech Opportunities Fund enclosed in the Pravoved.Ru service 60 million more rubles.

Legal technologies are included also in focus of investments Fund "Skolkovo". In February, 2018 in 11 cities Russian Federation was started by annual Open Innovations Startup Tour organized by fund. Participating in actions of round startups could pass in a semi-final competitions Startup Village and receive 2 million rubles on development the project. The jury of Startup Tour 2018 considered for participation in competition projects in the field of cybersafety, FinTech, Mobile technologies, Internet of things, AR/VR and LegalTech.

— the largest conference on technologies LegalTech to Russian Federation. The program of action includes performances of startups and the discussions devoted to new technologies in legaltekhe. In 2017 speakers of Skolkovo LegalTech told about prospects Technologies blokcheyna and smart contracts, and also opportunities Artificial intelligence and Big Data.

the Moscow Legal Tech Conference in 2018 took place in legal work. This year participants of conference will be addressed by 20 speakers from 5 countries. Experts will discuss innovations in LegalTech, new professions, cybersafety, legal ops, Technologies blokcheyna, Data Science. Action takes place with official support of European Legal Technology Association (ELTA).

B 2018 the Legal Geek team (the largest LegalTech-community in the world) and Nextlaw Labs (a first-ever LegalTech-incubator) for the first time as one of six platforms of the world round chose by

Moscow. Participants of pitches in Moscow became 14 Russian projects, and the victory in competition was gained "Jurist" and "Turbokontrakt". In October both companies will present the Russian LegalTech-market at conference in London. Thus the best projects will be able to attract investments and to bring the business to the international market.

of Legaltekh-startapy to Russian Federation also supports the international association of lawyers, developers, investors and businessmen of Legal Hackers. The global community uniting 102 cities and 59 branches worldwide, helps the Russian companies to create innovative solutions in the field of LegalTech. Organizers of community will see off branch iventy, provide workplaces for startups, organize competitions and tournaments.

In 2017 the Moscow Legal Hackers acted as the organizer the first in Russian Federation LegalTech-hakatona.

What LegalTech-projects interest investors

the Founder of service on financing trials Platforma Tsvetkova Irina notes that investors in LegalTech first of all interest the projects connected with technologies by Artificial intelligence which will be able to relieve lawyers of routine work. Besides, according to the expert, high potential represents today use a chat boats , the decisions, allowing to transfer paper documents to an electronic look and to analyze the obtained data, and also Technologies blokcheyna which in the future will be able to replace, in particular, traditional system of a notariate.

the Founder of Autonomous Non-Commercial Organization Pravorobotov Kulikov Nikita says that new projects in LegalTech should be started today in the largest segments of the market representing the greatest potential. The expert carries the automated registers, creation of new CRM and ERP systems which consider specific requirements of companies in LegalTech, decisions for standardization of workplaces of lawyers with development of ID of the lawyer (by analogy to ID of doctors in policlinics), systems for creation of standard documents, marketpleysy legal services and systems of automation of work of judicial authorities and participants of court sessions to number of such directions.

Director of the LegalTech center Fund "Skolkovo" Pronin Anton. Photo: Sk.ru .

according to the director of acceleration of legal technologies Fund "Skolkovo" Pronin Anton, investors in LegalTech first of all attract today the projects connected with use Machine training for processing of big legally significant data and cognitive technologies of Artificial intelligence. The expert notes that great opportunities now have technologies, allowing to process big document files and to use in legal practice key information from them. New intellectual systems are capable to allocate so-called "intentions" on which it is possible to distribute all documents on names of contractors, on a surname and a subject of the contract, and also can check each document on compliance to certain conditions (compliance).
Other perspective direction in legaltekhe Pronin Anton considers by br decisions which will help to automate operations in audit and thus will offer practical recommendations both to auditors, and their clients. Besides the expert sees high potential in development services of judicial financings by means of which claimants can look for investors for financings obviously perspective lawsuits. However that this market started working quicker, in new decisions modern tools of analytics and the modeling, including technologies processings of Big Data have to be introduced. Under such circumstances financing lawsuits by anything will not differ from investments in portfolios of actions, bonds and in share funds. Diversifying a package of investments in lawsuits, it is possible to reduce also financial risks investors, Pronin Anton explains.

of Feature of the market in Tsvetkov's Russian Federation

Tsvetkova Irina says that a common problem for all Russian startups in a segment of LegalTech there is rather small market size. to United States of America it is the share of legal services of about $450 billion while to Russia the volume of this market makes only $2 billion. The difference almost by 250 times, emphasizes the expert. However the Russian market is yet saturated with new decisions, so, competition level here not the so high.

according to the executive director LLC "Online patent" Akinshina Aline, one of the main problems Russian legaltekha are low interest of participants of the market to technological products.

"Users did not get used yet that they are advised by robots and demands make out digital systems. The trust to the live person remains traditionally to higher in spite of the fact that electronic legal tools can be more reliable and more exact, than consultation of the expert which qualification the user" cannot obviously estimate. the Executive director LLC "Online patent" Akinshina Aline

Kulikov Nikita a key barrier to developments LegalTech to Russian Federation calls br unavailability of government institutions to automation of legal processes. And it is a question not so much of automation of functions of departments, and how many of automation of processes of interaction of companies and citizens with government bodies. to Development this process in particular stirs lack of technical compatibility of used decisions. According to the expert, a segment of business-to-government (B2G) in the Russian market LegalTech mean an electronic notariate and technologically advanced judicial proceedings — everything that will allow to reduce terms of procedures without loss of the importance and "hardware weight" documents.

thus one of the main reasons which are slowing down development of a segment of B2G in Russian Federation, still have the imperfect legislation. Without modification of current laws it will be extremely difficult to introduce such practice in work of the state organizations, Kulikov Nikita considers.

Pronin Anton notes that the potential of monetizations the Russian market LegalTech at the moment rather low. Low demand for legal services compels legaltekh-startups to look for constantly additional niches and sources of financings. Thus opened today there is a question of term of return of investments.

Besides, the businessmen starting legaltekh-startups to Russian Federation, but guided by a foreign market, have to consider that they will face abroad the high competition. And companies which seek to enter the foreign markets, but perfect the MVP in the Russian conditions, have to be ready to that in foreign markets their product will be not always demanded. Pronin Anton explains such features with a considerable difference between foreign and Russian legal practice, both legislative, and procedural.
Tsvetkova Irina also reminds br to LegalTech-startups of conservatism of lawyers — has to pass some time while you will become the in this environment. Thus the expert advises not to be focused only on development as, in her opinion, new products in legaltekhe often are developed by the programmers who absolutely not are not knowing real needs of clients and specifics legal businesses.

the Founder of service Tsvetkova Irina says that products in the market of legal services first of all have to proceed from requirements of the market. Judicial financing arose in the countries where expenses on legal services are highest and not all clients are able to afford long trials, having thus every chance to collect solid compensations. On the other hand, there are investors who are ready to put in court costs in exchange for percent from awarded compensation.

Tsvetkova Irina explains that to Russian Federation this service is not less demanded, but that about it only start learning, companies were required time and investments on advance of a new type of services and demand formation. The founder of service says that the main problem at the moment when Platforma entered the market, was that they became the first similar service to Russian Federation. The Russian consumers almost knew nothing about judicial financing. Therefore startup had to form the market from scratch practically: to tell how service works, to describe examples, to discuss advantages and shortcomings of products, to conduct researches, to participate in conferences and forums, to work with mass media and to meet authorities.
Authors of another new to the Russian market of legal services product became founders of the Online Patent service. The project began work in 2013 and was started almost from scratch with idea to create "electronic patent office" which has to solve on Internet all main objectives connected with registration of patents and trademarks.

according to the executive director of companies Akinshina Aline, today "Online the Patent" enters in top-5 the Russian companies, registering trademarks. Now the project continues to develop and brings to the market new products. Recently company started the new direction — a platform for management of trademarks. The decision has to make management of trademarks much more simply and quicker. Today connection to a platform are expected by more than 1 thousand trademarks entering portfolios of large Russian owners. Until the end of the year company plans to start also online service on check of the registered domains.