LawTalk victory puts Korean legal tech firms on the map

[Courtesy of LawTalk]

Legal service platform LawTalk has found a path towards normalization with the recent decision by the Ministry of Justice to revoke disciplinary actions against lawyers who joined the platform. The ministry’s decision to cancel penalties for these lawyers is seen as the final piece in the puzzle to bring LawTalk back on track, and it has received a positive response from the lawyers who hope to return to active participation in the platform, according to Law&Company’s chief executive Kim Bon-hwan.

In a recent interview with Maeil Business Newspaper, Kim shared his vision for the future, saying, “We aim to become Korea’s first ‘legal-tech unicorn’ and compete on equal footing with global legal-tech companies, moving beyond the domestic market.”

The Ministry of Justice recently received applications from 123 lawyers who had faced disciplinary action from the Korean Bar Association (KBA) while using LawTalk. The ministry determined there were no grounds for disciplinary action for 120 of them, and the remaining three received warnings. Notably, warnings are not considered disciplinary penalties under the lawyer’s code, effectively canceling disciplinary actions against all the lawyers.

“We plan to increase our lawyer membership from the current 2,200 to around 3,000 by the end of this year, adding 12 percent every month. We are focusing all our efforts to achieve this goal as quickly as possible.”

Law&Company saw a significant drop in its lawyer membership, which had once hit 4,000, due to conflicts arising from amendments to the KBA’s advertising regulations regarding the use of legal service platforms in May 2021. The company aims to restore its membership to about 80 percent within two to three months.

After an eight-year battle between Law&Company and the KBA, the ministry’s decision to lift the penalties raised expectations that the long-suppressed legal-tech industry will finally become active. The decision is also the official recognition of a platform connecting legal service providers and consumers as a marketplace.

“The ministry’s decision signifies the government’s acknowledgment of the value and necessity of the legal-tech industry, and its commitment to playing a role in establishing guidelines and as a mediator,” Gu Tae-eon, co-chairman of Legal-Tech Industry Council, said at Korea Startup Forum. “With this reduction of uncertainties, the possibility of a second or third LawTalk crisis is significantly diminished and we can expect accelerated investments as well as the launch of new services in the entire legal-tech industry.”

In a recent development, Nexus AI, another Korean legal-tech startup, which specializes in developing artificial intelligence (AI) services for legal matters, announced that it had secured 2 billion won ($1.49 million) in seed funding from Primer Sazze Partners and Hana Ventures. The company plans to provide legal consultation services for the public and tools for legal professionals. Starting in early 2024, it will offer services including case searches, legal document summaries and generation, and judgment predictions.

According to a report from research firm Tracxn, there are over 7,000 legal-tech companies worldwide as of September 2023. Among them, there are nine legal-tech unicorns, with the United States leading the way with 2,917 companies, followed by India (713), the United Kingdom (621), Canada (349), and Germany (230). In contrast, there are only 31 South Korean legal-tech companies participating in the Legal-Tech Industry Council under the Korea Startup Forum. This indicates that the industry is still in its early stages, but it also underscores the potential for significant growth.

Key Korean legal-tech companies include Law&Company, which operates LawTalk and the legal information search service Bigcase, MODUSIGN, which provides electronic contract services, LBOX, offering case search services, Amicus Lex, operating automated legal document creation services, and AILingGo, which translates legal materials into English. Law&Company and MODUSIGN are the only two startups that have attracted over 10 billion won in cumulative investment.