What is LegalTech? Explaining the types of services, benefits, and how to use them.

The term "legal tech" refers to IT services and tools that increase the efficiency of legal work. In recent years, remote work, paperless work, and work style reforms have led to an increase in the number of various services and tools, and the area covered by "legal tech" has become wider. In this article, we will introduce the background to the growing demand for legal tech, the benefits and cautions of introducing legal tech, as well as the types of legal tech services and tools and recommended usage scenarios.

What is LegalTech?

Legal tech is a term that combines the words "law" (Legal) and "technology" (Technology). It can also refer to attempts to improve the convenience of business operations by utilizing IT technology in legal-related work, as well as to such tools and services. Why is legal technology attracting attention now?

Background and Market Size of Legal Technology

Legal technology is not a new term, but the recent spread of remote work and reforms in work styles are probably the main reasons why it is attracting attention. With the decline in the working-age population and long working hours, many workplaces are under pressure to operate more efficiently with fewer personnel. In legal work as well, there is a growing momentum to solve problems by utilizing legal technology.

In addition, with the spread of remote work after the Corona Disaster, many companies are rapidly promoting remote work in administrative operations, including legal-related work. Against this backdrop, the legal technology market in Japan is on an ever-expanding trend.

In 2019, Yano Research Institute conducted a study on the legal tech market, which predicted that the domestic legal tech market size was 22.8 billion yen in 2018, and that it would continue to grow year by year to reach 35 billion yen by 2023.
(See: Yano Research Institute https://www.yano.co.jp/press-release/show/press_id/2224 )

AI-based legal tech services

Work related to documents, which tends to increase in legal work, requires manual work such as filing and scanning, and the process of stamping and mailing papers also takes time and effort. The use of IT and artificial intelligence (AI) is essential to improve the efficiency and productivity of work that can be performed by a limited number of personnel. Automating repetitive tasks and other operations can also help reduce labor costs.

Advantages of Introducing Legal Technologies

Legal technology offers benefits such as increased business efficiency and reduced labor costs. Let's take a look at some of the specific benefits of introducing legal technology, such as improving the efficiency of legal work and data management.

Streamlining legal work such as drafting contracts and handling lawsuits

The birthplace of legal technology is the United States. In litigation in the U.S., where the disclosure of data as evidence is considered important, the handling of electronic data has increased due to the recent shift to IT. This is the reason why IT has advanced in the field of law. In addition to litigation support work, legal contract drafting has also become more efficient with the spread of legal technology.

Management and collection of vast amounts of data can be done quickly and securely.

Documents can be managed online. This eliminates the need for space to store paper documents and improves the speed at which you can reach the information you need from the vast amount of data because it is highly searchable. With the right SaaS service, you don't have to worry about security because your data is managed in a secure cloud environment.

Disadvantages of LegalTech

While much attention has been paid to the advantages of legal tech, there are also some disadvantages and points to be aware of.

Some types of contracts and business partners cannot be contracted electronically.

Some types of contracts are required by law to be made on paper. For example, "terms and conditions of investment trust contracts" and "delivery documents for specified commercial transactions such as door-to-door sales," etc. Depending on the industry, the introduction of legal technology may result in the confusion between paper and electronic contracts and make them more complicated. Since IT literacy varies by industry and business partners, it is necessary to check the situation of the partner company when introducing LegalTech.

Management in compliance with the Electronic Bookkeeping Law is necessary.

When introducing legal technology-related tools, it is important to be aware of the Electronic Bookkeeping Act, which stipulates rules and requirements for the preservation of electronic books. The method, format, and location of storage must meet these requirements.

What types of legal tech are being introduced in Japan?

There are various types of legal technology, but many of them are related to improving the efficiency of contracting procedures and various document management. The following is a brief introduction of each type of legal technology.

Electronic Contract Service｜Contracts can be concluded in the cloud

Electronic contracting service is a service that allows contracts to be completed in the cloud. There is no need to create paper contracts, and everything can be completed digitally, including the creation, electronic signature, and sending of the contract. From contract creation to storage and management, everything can be done in one go, and organization and classification can be automated. There are various services available depending on the business type and management method.

Document Management Service｜Documents can be converted into data and managed on a server.

This service allows you to digitize and manage a vast amount of documents handled by your company, such as customer information, contracts, and the progress status of each project. Even past paper documents are scanned and converted into digital data and managed on the server. More efficient management is realized by linking with other systems and services.

Contract Review Service｜Able to check contracts you have created.

The contract review service checks the contents of contracts that you have created. It prevents unfavorable clauses, missing clauses, omissions, etc. For companies dealing with standardized contracts, many contract reviews can be performed quickly and accurately.

Support Services for Registration and Various Applications｜Support for Registration and Trademark Applications

We also provide support services for various applications and filings for registration, trademarks, patents, and other corporate activities. Applications for company incorporation, real estate registration, trademark registration, etc. can be generated electronically and automatically, thus increasing efficiency.

Lawyer referral service

When a problem arises that you wish to discuss with a lawyer, this service will introduce you to a lawyer who specializes in the relevant field. You can request quotes from multiple attorneys at once, or specify conditions by region, content, and price to streamline your search and prevent mismatches.

Dispute and Litigation Services｜Assistance in dealing with and resolving lawsuits, including e-discovery and forensics

Our services for e-discovery of U.S. lawsuits include services that use information technology to collect and preserve evidence and extract relevant documents required at the time of lawsuits. IT technology is also used in forensic investigations conducted during corporate fraud investigations to collect and analyze the necessary evidence, as digital data makes up the majority of such investigations.

Services for Law Firms｜Supporting Law Firms in Managing Their Business

Services for law firms support business procedures unique to law firms related to case progress management and business management. In addition to recording and managing expenses and personnel assignments, law firms that handle a large number of documents can manage various documents and contracts electronically.

AI streamlines e-discovery and forensic investigation operations

The e-discovery and forensic investigation services described in the previous section are two of the most promising legal tech services that can benefit from artificial intelligence (AI).

Why e-discovery and forensic investigations are a good match for AI

e-discovery," which involves the disclosure of materials used as evidence in international litigation in the U.S. and other countries, and forensics, which is forensic investigation of corporate accounting irregularities and information leaks, both involve the handling of vast amounts of digital data. They require not only expert knowledge of law and IT, but also the know-how to efficiently control vast amounts of information. By utilizing legal tech services that utilize AI, whose greatest strength is the processing of large volumes of data, instead of only human labor when handling such vast amounts of information, it is possible to reduce labor costs for attorneys and other specialists, resulting in significant cost reductions.

FRONTEO supports corporate forensic investigations and e-discovery with legal tech AI

The legal tech AI business has been FRONTEO's business since its inception. For nearly 20 years, FRONTEO has been a pioneer in international litigation and fraud investigation in the legal tech AI industry, primarily supporting e-discovery in U.S. litigation and forensic work such as fraud investigations for domestic companies.

FRONTEO's AI engine, KIBIT, learns from the experience, wisdom, and senses of experts to efficiently analyze data. KIBIT's algorithms can identify and process necessary information from a large amount of data to help companies solve their problems.