Digital identity, artificial intelligence, process automation and cloud storage are just a handful of a host of technologies that make offering increasingly efficient legal services possible. Legaltech innovation, one of the 2023 trends spotted by BBVA Spark, is driving the industry’s digital transformation and modernisation.
The image of a law firm filled floor to ceiling with stacks of files or the perception that legal proceedings are bogged down by bureaucracy could soon fade from the collective imagination. Innovation in the growing legaltech market is changing the rules of the game.
Legaltech entrepreneurship is driving the industry’s modernisation and accessibility for both providers (B2B) and consumers (B2C) of legal services. With a host of applications that run the gamut from process automation and the streamlining of data management and legal documents to procedure digitisation, the sector’s startups are providing value in the form of optimisation, savings and increased productivity.
In Spain, 400+ companies constitute the legaltech ecosystem. According to Gartner, legaltech managed to attract a record investment of venture capital worldwide in 2022, topping a billion dollars for the first time. Not only that, but the legaltech market had a turnover of more than $28 billion in 2022 and could potentially generate revenues of more than $35 billion by 2025.
Legaltech startups play a vital role in the industry’s digital transformation by providing innovative tools to legal professionals and users. The innovations that dominate the market include software solutions that streamline the management of processes for lawyers and law firms.
Enter Capboard.io and its solution, which moves cap tables, used to keep track of a company’s equity (shareholder stakes) to the cloud. Its SaaS platform enhances the experience of company founders, lawyers, investors and employees, offering visibility and automating processes that until now were relegated to an Excel document.
“There hasn’t been much of a change in the way law firms have worked in the last 15 years, since they started using tools like Microsoft Office”, says Pol Gomá, co-founder and CEO of Capboard. However, he notes that “legal staff is now much more open to innovation”. The company was selected to participate in the seventh edition of the legaltech accelerator Cuatrecasas Acelera, one of the leading meeting points between traditional and innovative legal operators. “It’s helped us to understand how a law firm of this size works and to take a step forward in the legal aspect of our solution”, says Gomá.
Also hitting the market are tools to generate contracts, like Legaliboo; legal marketplaces where people can search for legal representation, such as elAbogado; and online legal services like the groundbreaking Reclamador. This company, which boasts a team of experts in law and technology, offers online services geared towards handling claims filed with airlines, banks and administrations. “We’ve been a digital legal services company from day one”, says CEO and founder Pablo Rabanal. “We were born as a legaltech company, leveraging technology and most of all a very strong service design”.
The startup, which celebrated its tenth anniversary in 2022, has successfully resolved more than 100,000 cases and has already collected more than €225 million from companies and institutions. “Technology means you can make small claims profitable that weren’t profitable before”, explains Rabanal. “We’re normalising the digital consumption of a legal service”.
Tools for collecting and generating secure digital evidence, such as digital signatures and identifiers, are also gaining ground. This is what Signaturit, which aspires to become the leading European electronic signature solution after merging with Universign and Ivnosys, is banking on. This type of tool has become particularly relevant in the post-coronavirus era, as BBVA Spark explored with Signaturit in an edition of the InnovaHome Festival. “Digital identity and electronic signatures have evolved dramatically in recent years. The pandemic served as a catalyst for a process that has no turning back”, sums up the Signaturit Group’s CEO, Sergio Ruiz.
For Ruiz, legaltech innovation is a transformational player at the business level. “It no longer depends on the legal department, but on the strategy of the entire company, and it’s the governance division that fosters it to make the company grow”, he explains. “The modernisation of the legal business is driving the economy”.
Legal practice cannot ignore the disruptive process of digital transformation that all industries and sectors are experiencing. In defining new legal processes and services, five key concepts chart the way to the future:
To respond to the challenge of authentication, legaltech startups and legislators are working together to develop solutions such as qualified electronic signature validation or e-wallets, an initiative promoted Europe-wide, which will generate “business attributes, power, representation or belonging to a group to operate directly with agile digital identities” adds the president of Signaturit.
Legal services are a cross-cutting concern for all companies, and legaltech innovation can help more than just law firms to become more competitive and efficient. An enhanced user experience, fraud-proof security and process optimisation are just some of the arguments in favour of a disruptive technology with a very solid defence.