We talk to startups and investors, you get the value.
When writing this article, I actively used legaltech.org.ua - the main resource about LegalTech in Ukraine. Highly recommended!
There is one precious thing in our world we rarely think about until we encounter it face to face. We are talking about justice (and the juridical industry in general as a guarantor of justice in our modern world) which is taken as granted. And with it, it is a large market in the digital world, which is also known as LegalTech. Today, we will try to pull back the mysterious curtain on the legal-hacker community and have a look at what is on the market now. Also, you’ll have a chance to think about market development directions, especially, in the time of the COVID-19 pandemic.
We talk to startups and investors, you get the value.
First, We need to define what LegalTech is and what is not. Wiki gives us a hint that legal technology (or LegalTech) is software and technology that are used to provide legal services. Companies that provide LegalTech services are usually startups that want to disrupt the existing conservative market (talking about conservativeness, lawyers can bet with bankers, we wrote about them in our previous article about FinTech in Ukraine).
Traditionally, LegalTech startups are divided into several directions:
Book-keeping (at the interface of FinTech);
Workflow automation (taking into account document custody);
Providing legal support.
More complicated tasks may include analysis or document preparation, analysis of judicial practices or legislation. And finally, at the highest level, we can get a “living” self-regulatory legal system that can improve itself (hello, Matrix!).
So now, when we know what might be happening in the LegalTech community, let’s have a look at what the situation is in Ukraine.
First of all, it cannot go unmentioned, that the legal hacker community in Kyiv appeared in Summer 2017, and in three years, it has become active enough (for instance, Kyiv telegram-community Kyiv Legal hackers has more than 750 people subscribed as of this writing).
Secondly, Denys Gurskiy has significantly influenced the development of LegalTech in Ukraine by lobbying the law about open data in Ukraine on October, 21 in 2015 as well as Incubator 1991, which develops open data projects taking into account the law segment.
Last but not least goes the fact that some large juridical companies in Ukraine have understood the necessity of digitalization that has led to the creation of many individual LegalTech projects, which we’ll get back to a bit later.
According to the LegalTech project catalogue on legaltech.org.ua, there are nearly 50 projects at the Ukrainian market. We will introduce the most famous of the list.
First of all, we have to introduce AXDRAFT, not only because it’s the first in the alphabet but also because of the fact that in 3 years (the project was founded in 2017), it managed to gather a large user database. There are more than 1,500 subscribed users on the project’s Facebook page. With this project, Zaremba brothers passed through Y Combinator, and in Spring 2019 they attracted $1,1 million investments at the Seed stage, having the valuation of more than $10 million. The main value of the product is the draft creation of juridical documents 7–10 times faster than a human would do (and with no mistakes).
Second place takes OpenDataBot. The project was created in 2016 and now it is presented as a service that resists raidership, as it can report about changes in Unified State Register of Legal Entities and Individual Entrepreneurs. Since Ukraine has launched the active reform process, it is possible to track changes in governmental enterprises for free, and this gives an enormous aggregation of information about them. Although the capabilities of the service are not limited to this — you can find information about the company, private individual, car and even a court decision. More than 20 thousand people have subscribed for Facebook OpenDataBot, which shows a huge interest in this product.
YouControl is quite a similar project to the previous one, it gives businesses a possibility to track contractors and changes in a registry. In fact, you can get a history profile of both your and contractors companies automatically in a few seconds. It is one of the first LegalTech projects in Ukraine and the oldest project in this article — the development process started in 2013 and YouControl company was registered in 2014. According to the information from the official website, more than 100 000 people use the service daily, and in general, there more than 5 000 000 history profiles were created, and this is definitely incredible!
OpenLex is another interesting project, which is a crowdfunding platform for financing court processes (those who faced the situation know that you can spend all money in the world on your lawyer). Even though the project was founded in 2016, the development is rather slow, there are only a few hundred people subscribed on their Facebook page but I’m sure that such projects can easily disrupt the market of juridical services in Ukraine.
And as we’ve already started talking about the justice system, then “Court on a palm” cannot go unmentioned; It helps to analyze and visualize court decisions, work with different registries in one place. Perhaps, this is one of the few projects that try to solve medium complexity problems and don’t focus on simple solutions.
Another one “star” of Ukrainian LegalTech market is PatentBot, which was founded in 2017 and managed to become famous not only in Ukraine but on the international level too. The service allows registering patents all around the world (in Ukraine, UE, CIS, the USA, on Near East and China) being at home (and it started doing this long before Covid-19 “locked” people at home).
Finally, let’s discuss events in the LegalTech market in Ukraine as there are plenty of them.
OpenData Challenge, which is organised several years in a row by Incubator 1991, received support from the Ministry of Digital Transformation of Ukraine this year. The event managed to approve itself in 2017 and then, the winner was “Court on a palm”, which was mentioned above. In 2020, the prize-fund amounted to UAH 3.5 million (more than €100 thousand), for projects at the Seed and Pre-seed stages, which applies to OpenData Challenge, the financial support gives a possibility to start actively working on the product and develop it.
Legal Startup Crash Test (LSCT) is regularly holding meetings where you can pitch your project idea, get feedback and what is more important — get the contact network. On March, 18, the 26th LSCT was held in the online format, and the dates of the future events you can find on their Facebook page.
The annual Aequo Legal Tech Challenge is an example of how one of the leading juridical companies becomes the game-changer in the field. The winner gets the prize of $15 000 and a possibility to receive comprehensive mentor support not only from lawyers but also regarding technical issues, marketing and sales.
As for now, we can surely state that LegalTech development in Ukraine is at the initial stage but still there are “stars” in the market but in general, it all goes around workflow automation or generation of document templates (one of the last projects in this segment, we know about is quickdog.site)
And with this, practically, only one project analyzes court decisions. However, there are no mentions about legislation or other law documentation analysis, which can be already realized using machine learning technology. And we can only dream about Judge Dredd or Minority report concepts in our world. Nevertheless, we have to pay attention to the Celestial Empire with their social rating but this is a topic for another discussion.