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Brazil Legal Techs ecosystem is thriving

December 7, 2018

... And is set to be one of the future global top leaders on transformation and innovation

 

Introduction

The pace of transformation and innovation is increasing in every area around the globe and in all sectors and professions. The legal practice took more time to start experiencing profound changes, but we already see an increase of solutions, technologies and more importantly, a new mindset that combined make the perfect opportunity for big and deep transformations. 

 

The main impact on the legal profession is the change on the current day-to-day business as there is a growing potential for the lawyers freeing themselves of manual, bureaucratic and repetitive tasks, and devoting more time to the complex cases that require logical reasoning and sensibility. At the same time lawyers receive support and guidance from various Legal Tech solutions that are built. Once this transformation process is in place, the lawyers will be free to develop and rely even more on their emotional intelligence. It will enable them to use their full human capacity to execute their business with expanded quality and more efficiency. It will improve their services provided to the clients and the community as a whole.

 

Brazil has a big potential market and can even be one of the global leaders on the transformation and innovation in the legal space due to many factors that will be discussed in this article.

 

Brazil Market overview

Market potential is an important item to be analyzed on any transformation and innovation effort as the bigger the market potential, more players will invest time, money and energy on bringing innovative solutions and creating companies to tackle the clients' needs or “pains” - a term frequently used on the startup world.

 

Brazil has an impressive number of legal claims (or lawsuits), we currently have more than 100 million legal claims currently been addressed on the courts, adding to this, our country has more than 1 million lawyers, the biggest number worldwide. Another important factor is that a big part of the claims is already digitized, a process that started in December 2006 with the law # 11.419, which established the basis and rules for the digitized claims. There are still challenges with the claims digitization but with the current advance, we can already see a lot of solutions that are based on the digital claims. 

Another important fact is that our country spends around 1.3% of the Gross Domestic Product (CNJ data) to maintain the judiciary system - a big number if compared with the averages of various developed and underdeveloped countries. 

 

As for restrictions, there are specific regulations by the Brazilian Bar Association (Order of Attorneys of Brazil - OAB) on lawyers advertisement and alternative legal service providers, both are not allowed in Brazil. On another side, the market is open to most of the Legal Techs that have focused on providing services to the lawyers, the law offices, the in-house legal departments, and the courts.

It is true that the amount usually spent by clients on solutions for the legal space is still low, but that is starting to change as lawyers, the law offices, the in-house legal departments are joining the transformation and innovation path and the solution providers are working to prove more value out of their offers.

 

Another important aspect is that Brazil has the biggest startup ecosystem in Latin America with some recent cases of big Venture Capital Investments, IPOs, and exits which reinforce the importance of the Brazil startups and entrepreneurship and attracts even more investments to the country.

 

The Legal Tech Market Growth

There are already established Legal Tech ventures (Legal Techs) in Brazil (for quite a long time) but in the recent years, we have seen a robust growth of new companies, with more than 15 launches in last year. We can say that a big contributor, fostering an ecosystem of growth, is the Brazilian LawTechs and LegalTechs Association. The Brazilian LawTechs and LegalTechs Association (AB2L) started on January/2017 with the aspiration of promoting and engaging the legal ecosystem and bringing information to all the entities involved with law provisioning and the practice advisory. Since its launch, we have seen a big surge of LawTechs and LegalTechs getting onboard the association and also many early-stage startups have been developed. 

 

We are also seeing an increasing amount of lawyers, law offices and in-house legal departments joining the association on a quest for innovation and technology information in order to start the transformation and innovation journey with their ventures.

According to AB2L’s latest Legal Tech radar update, we have +100 companies divided into the 12 segments. 


 

 

The radar is proven to be a very useful tool to the ecosystem both in order to inform the market (in terms of what already exists) and to potential clients  (to find specific solutions to their needs). – More information about the radar go to https://www.ab2l.org.br/radar

 

The radar segments: 

  • Legal content, education and consulting – Information portals, legislation, legal news and articles and other consulting companies providing services from information security to tax consulting.

  • Taxtech – Platforms that provide solutions and technologies to the general government taxes. 

  • Compliance – Solutions that offer a set of disciplines to make the companies comply with the set of disciplines, government legal norms, legislation and enterprise policies. 

  • AI for the Public sector – Solutions that use Artificial Intelligence for the public sector.

  • Document management and automation – Legal document automation software and contract lifecycle management solutions.

  • RegTech – Solutions to solve problems generated by the regulatory requirements.

  • Public data extraction and monitoring – extraction, monitoring and management of public legal information, such as cases publications, claims, legislation, and other documents. 

  • Do it yourself – Self-service legal solutions

  • Management of law offices and the in-house legal departments – solutions to the information and claim management for the law offices and the in-house legal departments. 

  • Professionals network – Networks to connect legal related professionals, which make it possible for people and companies to find lawyers around Brazil.

  • Analytics e Jurimetrics – Jurimetrics and data compilation and analysis platforms 

  • Online Dispute Resolution – companies dedicated to the online dispute resolution trough alternate ways to the legal court claims as mediation, arbitrage and deals negotiation.   

  • Exposure to the market and the ecosystem is key.

 

Another important success factor for Legal Techs is the ability to show their solutions in the legal ecosystem and to acquire leads from legal entrepreneurs, lawyers,  law offices,  in-house legal departments, and judges. They become more interested in change and transformation and they notice that successful innovation is the result of the joint collaboration. 

A Nice example is a legal Hackathon.  With more than 4 ventures, in 2 different cities, Brazil plays a serious role in the Global Legal Hackathon. 

 

We are also assisting many in-house legal departments to organize LegalTechs Demodays (or Pitch days).

Legal Techs and the legal departments are asked to specify their “pains” and have an open conversation about innovation and technology. 

 

Another interesting venture is our Silicon Valley mission. Key in these missions is to explore the ecosystem, establish a partnership, improve networking and bring together new ideas have been done with very good successful results. Discussion groups also play an important part in transparency. Many discussion groups are been created, under the guidance of the AB2L association, with vast themes as ODR, Blockchain, AI, Data Protection, Compliance, IOT and so on and, many articles have been published on the local media which are highly contributing to the information sharing and mindset change. AB2L local chapters are set per city and local activities such as information generation and consolidating, local ecosystem mapping and networking events are underway. Also, events at the major universities contribute to the awareness of a new reality for legal students. Major events are organized around the country as for example the StartSe Lawtech Conference with more than 1500 attendees, 80 booths presenting transformational solutions and +30 top-notch speakers. StartSe LawTech event

 

Conclusion and the way forward  

Brazil is managing to bring the entire legal ecosystem together, and due to its huge internal market has a big potential to become one of the global leaders. Nowadays some of the most forward-looking lawyers, law offices, in-house legal departments, and courts are on a transformational journey - each finding and establishing their specific ways and plans. 

Another confirmation that Brazil is on the right track is the tweet from Mr. Richard Susskind. With all of this happening in the Brazillian legal ecosystem we are delighted to be able to play an active role in participating and leading the legal transformation and we are sure that is no better time for those who are interested in this transformation to join us on this wonderful quest.

About the author

Leonardo Toco is a legal technologist focused on transformation, innovation, execution, and entrepreneurship.

 

Strongly engaged in the Brazilian and international legal ecosystems. He is COO of the Brazilian LawTechs and LegalTechs Association (AB2L). He is an experienced speaker and writer with multiple recent presentations taught on key ecosystem events and has multiple articles published in specialized media as Jota.info and StartSe. 

He is a Partner at two LawTechs: LDSOFT - the Brazilian leader on Intellectual Property case management and search & legal business automation solutions based on SaaS and RBO – focused on financial management for the law offices and the in-house legal departments. 

Leonardo is Co-founder at the juntospelo, a Rio movement that aims to transform Rio de Janeiro into a key innovation hub. 

 

You can contact Leonardo at:

Email: LToco@LDsoft.com.br

Linkedin: https://www.linkedin.com/in/leonardotoco/ 

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